The largest supplier of terminals for accepting cards will consider leaving Russia

The supplier of POS-terminals Ingenico, which are used by the largest banks, may leave RUSSIA in March, RBC sources say. Experts estimate the share of devices on the market at 50%.

One of the largest manufacturers of terminals for accepting cards for payment, Ingenico, may leave Russia in March 2023, three sources in the payment market told RBC. According to them, the company plans to leave Russia on March 1, contracts with employees in the country are valid until February 15. The company plans to provide technical support for POS-terminals until the end of March, they say.

What is known about the plans of the manufacturer

Two more interlocutors of RBC in the payment sector are aware of Ingenico's desire to leave Russia, but are not aware of the timing. Ingenico has not officially announced its departure, all negotiations with banks are being conducted unofficially, and the likelihood of leaving is still being discussed, another source in the financial market told RBC.

According to the Bank of Russia, at the end of the third quarter of 2022, about 4 million POS terminals were installed in Russia. Ingenico itself at the beginning of 2018 reported that 1.5 million of its POS terminals were produced in Russia (in 2019, the company closed production in the country and moved it to Vietnam).

Two RBC sources who know about the timing of the company's exit from Russia say that Ingenico devices occupy a major share in the network of POS terminals of Sberbank, VTB and Promsvyazbank. Sberbank and VTB did not respond to RBC's request. Promsvyazbank did not answer the question about the share of devices. But Nikita Khomutov, Vice President, Acquiring DIRECTOR of Promsvyazbank, noted that PSB is implementing a strategy aimed at the phased replacement of terminal equipment and software for it. “Last year, the Bank studied offers on the acquiring market and signed contracts with alternative suppliers of POS terminals that have already been installed and are successfully operating,” Khomutov said.

Ingenico is an international company headquartered in France. It has been operating in Russia since 2007, its Russian subsidiary is Inzheniko LLC. Now on the official website of Ingenico Russia is not in the list of countries where the company's office operates. A representative of the global office told RBC that Ingenico transferred 100% of the shares of Inzheniko LLC in June 2022, therefore, it can no longer comment on information about the Russian business. A spokesman for the company did not elaborate on the details of the deal.

There are two Inzheniko LLCs in the Unified State Register of Legal Entities, which are the property of foreign legal entities. One of them is engaged in the development of computer software and, according to RBC.Company, is 100% owned by the French Ingenico Group. The second company specializes in the wholesale trade of equipment. Now a liquidator has been appointed in it, whose surname and initials coincide with the name of the person who represented the interests of the first company in COURT.

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“The appointment of a liquidator is an external sign of the beginning of the business termination process,” explains Oleg Permyakov, partner at Rustam Kurmaev & Partners. - The ultimate goal of the liquidator is to find and collect all the property of the liquidated person, fulfill the outstanding obligations of the legal entity or complete them, preferably without disputes, hold an auction of property, if there is not enough money - the existing property can theoretically cover debts, and distribute the property remaining after the sale between its members." The presence of several legal entities, in one of which there is a liquidator, “with a high degree of probability means a partial withdrawal of the business from the Russian market, but only of the company in which liquidation procedures are currently being carried out,” emphasizes Permyakov.

Consequences of leaving Ingenico

Western companies began to leave Russia en masse in 2022 against the backdrop of the Russian military operation in Ukraine and subsequent tough Western sanctions. Ingenico has been trying for several months to find a way to leave Russia in a way that would minimally harm the payment market, one of RBC's sources says. For the first time, information about the possible departure of the company from Russia appeared on the market last spring, he recalls.

The share of operating Ingenico POS terminals in Russia is about 50%, says Ilya Korobov, CEO of payment solutions provider INPAS. With their departure, two main problems will arise - this is technical support for software and repair of the equipment itself, Korobov argues: “Repair can be carried out through an intermediary company, but it is tied to the supply of spare parts for POS terminals to Russia. It is not clear whether this will be possible with the departure of Ingenico. The situation with software support is even more difficult, because Ingenico was independently engaged in the development and updating of software, and it is not possible to find contractors who could do this instead of them. ” Therefore, Korobov continues, with the departure of Ingenico, there are risks that their POS terminals will work until the first breakdown, and will also become obsolete, since they will not be able to support new functionality,

It is unprofitable for banks to replace the entire fleet of Ingenico POS terminals at once, because it is very expensive: one terminal costs about $150–160 on average, Korobov estimates. In his opinion, credit organizations are likely to change Ingenico devices as they wear out. “The need to replace previously installed terminals will only arise in the event of their failure,” Khomutov agrees.

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There are alternatives on the market - these are mainly terminals of Asian vendors, Korobov continues. Another major POS-terminal manufacturer, Verifone, is an American company, and in this case there are also risks of its exit, although it has not yet made such a decision, he warns. But in Russia, Verifone does not work directly with customers: all hardware and software support issues are handled by a Russian partner company, so if they leave, it will be much easier to operate their equipment.

The departure of such a major player in the POS-terminals market as Ingenico may lead to an active scaling of payments using the Fast Payment System, Olga Blednova, director of the practice for providing consulting services to companies in the financial sector, Kept, believes. In this case, payment can be made through a QR code without a terminal for accepting cards. “The product has already been formed on the market, although it occupies a small percentage of it. <...> This system will probably develop as the main one on the market,” the expert admits.