Cards, cash and fraudsters. Interview with the Visa’s top official Vira Platonova

Interview with the new Visa Group Country Manager in the CIS and Southeast Europe

Vira Platonova

One of the key sensations of the past year was General Manager of Mastercard in Ukraine rejoining Visa as the new Group Country Manager in the CISSEE. She now leads  operations of the corporation in the seventeen markets across Central Asia, Eastern and Southeast Europe and personally oversees Visa’s business in Ukraine.

Platonova is open about global dominance of Visa that services over half of the global cashless payments being one of the reasons of her ‘transfer’. In Ukraine, her employer is currently behind its key competitor in the market share: Mastercard accounts for 68% of all issued cards in Ukraine, while Visa’s share is only 32%, according to NBU data as of October 2018.

Platonova met with journalists at her ‘usual place’ – Leonardo Business Center in Kyiv, which headquarters the Ukrainian offices of both global payment systems. A year ago, in an interview, she spoke about the composition and customs of the Ukrainian payment market and now she will speak about its future.

About rejoining VISA

– You transfer to Visa after a long period with Mastercard came as a surprise. Can you tell us about your decision, what where the reasons for it?

– It seems to me we need to take into account two aspects here: career ambitions and general understanding of how the payment market will develop further. In terms of the latter, Visa’s impact on the global segment of cashless payments is larger in scale by a number of parameters.

– It is believed that Mastercard is more influential in Europe.
– In many markets in Europe, the companies compete very closely. However, I am talking about something different – the steps Visa has been taking over the past several years, particularly in terms of transition to digital, indicate that the reaction of the corporation to the challenges of modern economy was appropriate.

– Has the work at Mastercard seized to meet your career ambitions?

– It was very difficult for me to make this decision. But when you feel that as the team leader you managed to achieve certain success, but there is no more room to move forward, you need to leave. The best way out in this situation is to make the decision while you are on top.

– Didn’t such major corporation have a condition that a top manager cannot work for the competitor for some period of time?

– Since I’m here, it is clear that everything is in order.

– What was the role of the money factor – were you offered a higher salary?

– It was not like that at all: I participated in an open tender for this position. There were other candidates, who competed with me in equal conditions.

– What impressed you the most in Visa after so many years with Mastercard?

– For me, the biggest shock was the scale. When you manage several countries, you think quite locally. Everything changes, when you have 8 meetings a day with 50 different banks in different countries within a week. It is an overwhelming change of perspective; you understand that everything you believed in in Ukraine is absolutely different from what is happening, for example, in Serbia. That is why that really pulled me out of my comfort zone. But, as we all now, any evolution involves pain.

– As a manager, what can you offer to the company?

– I came to a rather large structure with a long-standing system of operation. Fist of all, I can offer flexibility and the quickness of decision making – you could say an element of a startup in a global corporation.

About the Ukrainian office

– What is the Ukrainian office of Visa? How is it different from the office of Mastercard?

– Visa’s Kyiv Office is a regional hub that works with 17 countries: Southeast Europe, CIS (all countries with the exception of Russia). For me, it is managerial work of an entirely different level. Subsequently, it even turned out that no Ukrainian before me held such position in international payment systems – earlier, even in Ukraine, only expats worked. This is a good opportunity to show that our managers can also effectively work with such a group of markets.

– Are you personally based in Kyiv?

– Yes, but I’m traveling all the time. Yesterday, I came back from a trip to Southeast Europe, where I met with partners in Belgrade and Sarajevo.

– Was it difficult to readjust to this regime?

– Naturally. In the periods of active traveling, I’m here only for the weekends. However, since the Ukrainian market also requires a lot of attention, I try to organize my work in blocks – one month for business trips, one month – here in Kyiv.

– How does you family take it?

– Stoically (laughs). But, of course, my family fully supports me and now, a hundred days into my return to Visa, I am convinced that this was the right decision.

– How many people are working under your leadership?

– 130.

– How many of them are in Kyiv?  

– Around 100 in Kyiv – the key organizational functions are here: consulting, marketing, risks, products, client support, innovation, communications, etc.

– Since you travel a lot, it turns out that the local offices are not entirely autonomous and require continuous control?

– Not every country has an office. There are offices in Serbia, Kazakhstan, Georgia, Azerbaijan and Belarus. My task now – not only mine, but Visa’s globally – is to activate decentralization: to allocate more people to the regions, for example, marketing managers or payment solutions development specialists, so they could operate more independently.

– So, now there are 100 people in Kyiv and the remaining 30 are dispersed in the remaining 16 markets of your region? That’s very little.

– Yes, but Visa globally employs a little over 17,000 people in 200 countries and territories, which is not typical for the companies with this level of capitalization and turnover. In other words, in this sense the business is very effective. But again, over the past several months, we reinforced the local teams and will continue to work further in this direction. It is possible that a couple of new offices will be opened.

– What tasks do you have, if you describe them in figures? Can you list the main KPI?

– There is a specific task for each market: in some countries we need to increase the market share, and in some – maintain it. The second large area is the effectiveness of the team’s performance: I need to motivate people to achieve serious results within a comparatively short period of time. The third is expansion of the range of the company’s operation in our markets, which means we will start working in the areas, where we were not present before. For example, we will be expanding marketing activity in all countries.

– How?

– Local sponsorship with local companies and events that hold flagship positions in their markets. Among other priorities is customization of the products for the needs of the local consumers – we will work a lot on the loyalty programs. This means that the main focus is that the end consumer of our services gets the preferences, not the bank.

About partners in Ukraine

– Who in Ukraine could become such partner?

– We have lists for every region – around 30 potential partners in each. In the end we will select, I think, 3-4 per one market. In Ukraine, it is primarily Ulichnaya Eda and we will be expanding our partnership. Also music events are possible – last year we had BeLive Festival, in 2017 – Eurovision. The logic is approximately the same as in other countries – for example in Serbia, we are preparing projects with Belgrade Dance Festival. We are interested in all platforms – from concerts to sporting events.

– BeLive was the first attempt of Visa working at such an event – what is your assessment of this experience?

– Yes, it was a ‘trial balloon’, but in any case, this is the area, where we need more active presence.

– Do you have any plans to ‘compete’ with Mastercard for VDNH (Atlas Weekend, Zymova Krayina project – Ed.)?

– I believe Ukraine has plenty of places for development of cashless environment. There is no sense in competing for the same grounds – we need to create new ones, thus helping create conditions required for development of cashless payments everywhere.

– And how does it work – do you sponsor some part…

– We want to combine, as simple sponsorship does not bring the clear benefits in development of digital payments. It is of paramount importance for us not to simply place the brand, but also to create motivation for the use of Visa cards – discounts or creation of a cashless environment, providing for the infrastructure for acceptance of cashless payments.

– And what does the partner get?

– As a partner, we not only participate financially in an event, but also provide the technology – we come to the venue and fully build cashless space, providing for the infrastructure for acceptance of cashless payments.

About marketing

– You are saying that you have to dedicate a lot of time to the Ukrainian market – why, after all, every regional office has its own manager?

– The role of the regional managers is certainly important. However, Ukraine is one of the largest markets. Since I am based here, I am directly involved in Ukraine.

– In Ukraine, Visa is clearly behind its key competitor by market share.

– We are developing the business on the basis of the long-term strategy and the advantages we can offer our clients. The market growth is dynamic – 30% annual increase by the volumes of cashless payments and 24% by the number of cashless transactions. We need to work on advancing the innovation and advantages Visa has on the global level.

– Is there a task to increase presence?

– Certainly.

– To which level and when?

– That would be guesswork. Everything depends on the implemented projects, well-built relations with the partners (in this case, banks), marketing. But it takes time to build all this. That’s what our mission is “to be the best way to pay and be paid for everyone, everywhere”.

– It seems as if earlier the Ukrainian market was not such a priority for Visa, don’t you think?

– It has always been and remains a priority; otherwise we would not have set up a regional hub with 100 employees here. The other thing is that earlier the company did not have the objective to specify the operation of its regional offices so much to focus on each, even very small, market. And this is very important, because you cannot compare, for example Serbia and Armenia. It is one of my tasks today – to clearly and loudly communicate to the members of the payment ecosystem that Visa will now focus a lot on specific markets, not only in Ukraine, but also in the CIS and Southeast Europe. The intensity of work with specific countries will grow immensely.

– Is this aspiration supported by the budgets?

– Of course.

About IT base in Ukraine

– Does Visa have its own developers in Ukraine?

– We have a large technical hub here, about 30 people that provide support to the banks in the area of IT; there are testers that test new developments. Several weeks ago, we completed creation of a ‘special department’ – these are IT experts working not only for our sub-regions, but all of CEMEA (Central Europe, Middle East, Africa – one of the six global regions of Visa – Ed.). This means Ukrainians are introducing Visa’s technical developments in 90 countries.

– Are they involved in the development of new products?

– Not at the moment, the headquarters in the U.S. are involved in that, but I’ve been considering the possibility and expediency of setting up such a unit here.

– Why? 

– We have a very good foundation from the point of view of IT development in the country, so why not involve resources and possibilities of Visa here?

– Do your bosses in CEMEA support this idea?

– They’ve supported it even before I joined – when they were setting up a large regional office with a serious IT component here. Some Ukrainian specialists – 7-8 people – even went to work in Dubai, where the headquarters of CEMEA is located.

– So the corporation takes the best employees from the regional offices? This seems to contradict the movement towards strengthening local teams.

– On the one hand, indeed, we would like the talents to stay here, but on the other hand – our efforts are aimed to help employees that show good results grow, which is why we welcome the opportunity of working in other divisions and other locations.

– Are there many such expats at the Kyiv office?

– Head of Product Department of the region is from Moldova, several people from the Russian office moved here a long time ago, Head of GR Department is from Georgia.

– How strong is the competition for personnel with Mastercard?

– In principle, the people quite often transfer from one payment system to another – it is a global history. But I must say that although the companies are in the same business, they are very different on the inside, which is why not all specialists that produced a good result in one company feel comfortable in the other.

About European realias

– How strongly does our market differ from the Balkans?

– The key profit of the banking business here is based on the transaction segment, which in its turn based on the interchange or interbank fee – it is a fee that the acquiring bank pays to the issuer bank. The size of the interbank fee, determined by Visa, is calculated in a way to ensure balance between the members of the system and stimulate issuance of cards and development of the network of their acceptance. This is the right approach, as it stimulates the people to pay with cards more, because then the banks have the opportunity to invest into the infrastructure, loyalty programs, additional preferences for the cardholders. In Europe, the situation is different. The interchange fee is set at 0.2-0.3%. This is due to the state regulation of the fee.

In Serbia, the interchange fee was reduced in December 2018 – this means the banks have been living in a new reality for two months; they have to develop business models anew, because they can no longer benefit from the transaction business.

– What should they do then?

 They need to work with the clients as much as possible to increase the flow of transactions, to motivate the people to pay with the card more. In this situation, the loyalty platforms must be financed not by the banks, but by the vendors. For many of them this is a serious “resetting of perception”.

– What about p2p transfers – is it an option for European banks?

– P2P are very developed here, but practically do not exist as an area of business in Europe. The Balkans, for example, have the same problems as we do – many people travel to work abroad and they need to transfer money to their families. There is also potential for domestic p2p transfers. It is a good opportunity for the banks.

– Why haven’t they used it before then?

 They managed to remain profitable without much effort. They did not need to do something extraordinary, as is sometimes the case here, when you need to really try hard to motivate the people to pay with the card and not cash.

– Could the story with the state regulation of the interchange fee repeat here in Ukraine?

– In Europe, everything happened very fast. However, 3-4 years after the European Commission approved this decision, one could say that it did not fully justify itself – the share of cashless payments did not increase, the prices at the stores did not decrease, as was expected, but on the contrary, in some cases the burden of the interchange fee was simply transferred to the consumers. Ukraine at the moment does not have the required level of digital payments to go to the directive regulation plane, as it is very difficult to predict its impact.

– Payment systems set the trend towards reduction of the interchange fee themselves several years ago. Why?

– Yes, we are moving towards gradual reduction of the burden on the acquiring. It is, however, important to us that it is not transferred on the clients, particularly this applies to the budget employees, as there are quite many of them in Ukraine. So far, everything is happening within the framework of the consensus between the market players. The fee will continue to decrease, but slowly.

About consumers

– What competitive advantages does Visa have over Mastercard in Ukraine, in your opinion? How do you want to motivate clients that use another card to demand Visa from their bank?

– It seems to me that we do not need to compete with other payment system. The market grows 30% every year – that is the share of payments that were simply transferred from cash to non-cash. We need to do something entirely new, to change, not to repeat the existing experience of a cardholder.

– What could it be?

 We need to give the client a specific benefit for paying with the card, to make the process of payment automatic, imperceptible for the consumer. I believe in the loyalty programs. But for different segments, their logic can be different. For example, for premium clients – these are the programs for travelers, unique discounts, etc.

– Cash back? 

– This is a good option, but there is one nuance: cash back must be perceptible. In this sense, we are actually moving towards a new ideology of marketing – the idea of branding and direct discounts is giving way to smart approach, when the client needs to earn a reward with their actions. For example, with registration – but it is important, of course, that it is easy and smooth, literally on the intuitive level.

– No so long ago, Union Pay announced plans to enter the Ukrainian market; they allegedly plan to invest a lot of money here. Do you consider them competitors?

– As far as I see the operation of China Union Pay in the other countries, they mainly invest in acquiring, not emission. Certainly, on the one hand, any competition is a challenge for us, but on the other hand – it stimulates market development, increases the coverage of a larger part of the territory of the country with payment infrastructure.

– How important in terms of competition are government relations and joint projects with the bodies of power of different levels? Or are these more for the image?

 For us, relations with the government involve two areas. The first is when the state is a client – it requires assistance in creating the payment infrastructure, for example in a situation of monetization of subsidies and preferences. Transport solutions are also a part of our relations in the client ‘regime’. The second – the so-called “payment nationalism” is when the state creates competitive advantages for the local payment system. In this respect, it is important for us to defend our interests on the competitive market, but that does not always turn out to be effective. In any case, it is worth saying that currently the importance of GR for payment system has greatly increased compared to several years ago.

– Do you now need a more detailed segmentation of clients?

 Yes, we are coming to understand that it is not very effective to use a sledgehammer to crack a nut. Besides, Visa has a very solid foundation for detailed segmentation – huge bulks of data, which makes it easier to work with big data.

– What will it give you?

– For example, we see that a person often pays with a card in a specific store, he has a car and there is a gas filling station near this store. So, we have to think about giving this specific client not just a general discount, but an offer, the use of which will be very convenient for him. Clearly, this is additional work for us, but there is no sense to resist – the future belongs to the big data.

About fighting fraud

– Several years ago Visa provided free access for Ukrainian banks to the part of the functionality of its VisaNet system for more effective fight against payment fraudsters. How did this story end? Do the banks use the system now?

– Yes, it is a very effective mechanism: again, it is possible to substantially reduce the number of fraudulent transactions on the basis of big data and behavioral analysis of the client activity through a higher quality – and instantaneous risk assessment of each transaction. This is essentially a risk management instrument that a bank can install on its host and use for a certain fee. Some have their own developments, hosting companies offer similar things, but nobody has the scale of Visa.

– Do the banks need it at all? There is an opinion that businesses in our country are inclined to save on security.

 We have requirements to the banks that are members of the payment system, including in terms of security – they must observe them. VisaNet is an additional option. It seems to me, however, that the problem is not on the side of the banks – practically all of them are now using smart security systems, but they do not work, if the clients provide their payment data to the fraudsters themselves. That is why in recent years, we and the banks are investing more money in raising awareness of the clients.

– What exactly do you do?

– We hold educational events. For example, we had large-scale programs for raising financial awareness in Ukraine, Georgia and Serbia. The audience coverage in Ukraine reached nearly 5 million people. We are not communicating with the Ministry of Education of Ukraine to introduce elements of financial awareness at the level of a school program.

– Is the level of financial awareness, including among businessmen, higher than in Ukraine, in the Balkans for example?

 Yes, much higher. After all, cashless payments began to develop there, much earlier, than in Ukraine.

Serhiy Shevchuk
Stas Yurasov

The original text of interview is available here.