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ITU Regional Seminar in Baku, Azerbaijan Republic

12th of November 2014

intervaleWhat does the future hold for mobile payments in the CIS?

Regulators, banks, telecom operators and developers from around the world met in Baku to address this issue

The first Regional Workshop for CIS “Mobile Payments: Issues and Development Prospects” was held in the Republic of Azerbaijan on 14-16 October 2014 under the auspices of the International Telecommunication Union (ITU). The event took place in Baku at the invitation of the Ministry of Communications and High Technology of the Republic of Azerbaijan.  Intervale Group and Odessa National Academy of Telecommunications (ONAT) named after A.S. Popov were the co-organizers of the event supported by Mobey Forum, an international non-profit association.

ITU Workshop marked the final phase of the implementation of the CIS countries’ Regional Initiative aimed at the elaboration of recommendations on mobile payments organization and at the development of a pilot fragment of a universal system of m-commerce and m-banking. The Regional Initiative, supported by the CIS countries and adopted by the World Telecommunication Development Conference (WTDC) in 2010, was launched by the Intervale company, a member of the ITU Development Sector. Regional initiatives are approved by the World Telecommunication Development Conference every four years. Each initiative is aimed at the implementation of projects in the ICT areas of high priority.

The Regional Workshop was primarily aimed at the analysis of the global achievements and mistakes in the formation and operation of mobile payment systems, as well as at the presentation of “Recommendations for the formation and operation of mobile payment systems in the CIS countries”.

Officials, businessmen and developers – all in one place, at one time

The event was attended by representatives of ministries and government agencies, telecommunications and financial regulators of the CIS countries, including the Ministry of Communications and High Technology of the Republic of Azerbaijan, the Central Bank of Azerbaijan, the Ministry of Information Technologies and Communications of the Republic of Moldova, the State Communications Agency of the Kyrgyz Republic, the communication service offices of various institutions such as the Government of the Republic of Tajikistan, the National Bank of the Republic of Belarus, Zerde ICT National Holding (Kazakhstan), Kazsatnet National Company, Information Technology Development Foundation (Kazakhstan),  representatives of telecom operators and banks from different countries of the CIS.

Telecommunications language needs no translation

The speakers and participants of round tables held at the Workshop were top managers and leading specialists of recognized international and national companies, universities, telecommunications equipment manufacturers and developers of software for mobile payment systems, international organizations, and other stakeholders from 14 ITU Member States (Azerbaijan, Belarus, Great Britain, Greece, Spain, Kazakhstan, Kyrgyzstan, Moldova, the United States, Russian Federation, Tajikistan, Ukraine, France, Switzerland), with 8 CIS countries among them.

Global newsmakers presented their vision of the future mobile payments

Among special guests at the Workshop were Klaus Löber, Head of CPMI Secretariat, Bank for International Settlements (BIS); Mario Maavad, Security Director, CaixaBank, the largest Spanish bank, a leader in mobile payments in Europe and Latin America; Pierre Antonio, CMO, Natural Security Alliance, the leading global association in biometric technology for the banking and financial sector; Frazier Evans, Partner, Booz | Allen | Hamilton, a global consulting leader in payment security; Stewart White, Chairman of the Board, Akhet Consulting; and a number of other leading experts in the field of mobile and payment services.

The Regional Workshop addressed the following issues:

• Activities of the International Telecommunication Union to develop services based on mobile devices;

• Overview of the global mobile payments development (including the CIS region);

• The role of the state and legal regulation of the development of mobile payment systems;

• Technical and organizational aspects of the formation and operation of mobile payment systems;

• The use of open communications systems based on mobile networks for the provision of e-government, e-health, education and authentication services;

• Methods of mobile banking popularization in developing countries;

• Problems of training of specialists for the development and support of the mobile banking systems;

• Recommendations for choosing architecture and technical platform to build local and nation-wide mobile payment systems;

During the Workshop the Intervale company presented their products implemented under the Regional Initiative. Instead of a pilot fragment of m-commerce and m-banking systems, the company introduced several commercial mobile payment systems already launched, such as MasterCard Mobile and MTS Easy Payment.


Recommendations in the best interests of all parties


The Workshop ended up with the participants’ unanimous approval of the results of fulfillment by Intervale of the terms of the Regional Initiative. Also, the participants elaborated and adopted the following recommendations on the development of mobile payments in the CIS countries.


In the legal and regulatory area:

1. To emphasize the need for a model legal regulation on mobile payments that would define the legal, regulatory, technological and business aspects of this activity.
2. To draw attention of the global financial market participants, in particular, the international payment systems, to the advisability of timely adaptation of financial services standards for their use in the mobile payment industry.
3. To find it reasonable to establish in the CIS region an advisory body for m-payments and m-commerce responsible for defining principles and recommendations for market participants in different countries.

In the area of business practices:

1. To follow the ‘customer-comfort-without-compromising-security’ principle in the development and promotion of mobile payment systems.
2. To encourage the use of mobile payments for the most popular financial transactions (payments associated with taxes, public services and utilities) in order to promote mobile technology in the best interests of consumers and the state.
3. To emphasize the necessity of systemic approach to enhancing the customers’ financial literacy and awareness of the fundamental principles of mobile payment technology. To continue the practice of preparing and implementing targeted marketing campaigns aimed at the mobile payment services popularization and enhancement of consumers’ financial literacy on the local markets.

In the area of technology development:

1. To apply the principles of multi-factor authentication and strong cryptographic algorithms used for client authentication and authorization of transactions. To emphasize the necessity to store critical data for client  authentication separately from the payment details and other financial information.
2. To recognize the presence of good prospects for the adoption of biometric authentication of clients in the mobile payment industry.
3. To emphasize the presence of good prospects for the transition to modern methods of protection of the payment details, including various options of the implementation of security features, HCE technology, TEE and tokenization to ensure an adequate level of the mobile payments security.


Orozobek Kaiykov, Head of the ITU Area Office for the CIS


“We are delighted to note that the Workshop participants from different regions of the world shared their short term vision of the ways and principles of formation and development of the mobile payment systems. The recommendations resulted from the Workshop activities will provide the framework for further use of mobile technologies in commerce, education, healthcare, financial and other services to the benefit of the national economies’ development.”
Elmir Velizade, Deputy Minister of Communications and High Technology of the Republic of Azerbaijan


“From just a pastime, the mobile services have evolved into a tool of effective interaction with the mass consumer. Efforts for their development are intended to improve the quality of life of the population through a simplified access to public and municipal services, health and social facilities, to the options of payment of public transport fares and so on. The achievement of such ambitious goal requires joint efforts of all stakeholders including mobile networks operators, banks, IT companies, and government bodies. Viable projects of our foreign partners and promising initiatives implemented in the CIS markets are to be taken into account as well.”
Oksana Smirnova-Krell, CEO, Intervale Group


“Despite the obvious attraction of mobile services for businesses and consumers, there is quite a number of factors that hinder the widespread development of the mobile ecosystem. Among the main ones are views, sometimes diametrically opposed, on the prospects of the industry development, diverging opinions regarding the configuration of its participants, the lack of cooperation between the driving forces of the mobile services market, i.e. regulators, banks, mobile networks operators and developers. The Workshop has demonstrated that representatives of business community, developers and regulators representing different countries and different economic models were able to elaborate a common approach of the professional community to the requirements for the mobile payment systems, to formulate principles for their formation and operation in the CIS countries, to define the role of participants in the building of such systems with the legal and organizational aspects taken into account.”


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