Green Paper - Mobile Payments Market

A Green Paper, produced by the Better Regulation Delivery Office, with the support of the EU4Business FORBIZ project, on regulations in the mobile payments market in Ukraine.

The report says mobile payments function in 93 countries and play a significant role in the modern economy. In 2014, SMS payments amounted to around $4 billion, and by 2019 are expected to reach $22 billion. The amount of payments using mobile apps reached $2 billion, and by 2019 is expected to grow to $16 billion. However, in Ukraine, this market is not developing despite considerable demand. This is mainly due to significant regulatory barriers.

In 2016, the entire volume of transactions with electronic money, the medium used for mobile payments, amounted to UAH 2.99 billion, having decreased from UAH 3.24 billion in 2015.
At the same time, the baseline development scenario of the market for mobile payments suggests that the volume of transactions could amount to more than UAH 16 billion ($650 million). The development of mobile payments will enhance competition and transparency in the e-money sector, the BRDO says.

The regulation of the mobile payments market includes telecommunications legislation, overseen by the National Commission for the State Regulation of Communications and Informatisation, and financial sector legislation, which is subject to regulation by the National Bank of Ukraine. The Green Paper examines a total of more than 15 acts comprising the regulations for the mobile payment market. At the same time, two regulatory barriers were identified to the development of mobile payment markets in Ukraine: the mechanism of refunding the unused funds to the subscriber from the telecoms operator and the mechanism of mandatory fee collection for the state pension insurance levied from certain types of business operations.

The Better Regulation Delivery Office, together with the Ministry for Economic Development and Trade and the State Regulatory Service of Ukraine, with the support of the FORBIZ project, has launched the ProDialogue under the EU4Business initiative. It aims to involve all stakeholders in reviewing regulatory solutions and working out ways to address them. As a result, a series of Green Papers has been developed, which analyse the current state of market issues and potential ways to improve the regulatory environment. A further set of White Papers represents a consolidated product of the groundwork by the business community and expert environment in the form of practical recommendations and suggestions for the authorities in order to improve the regulatory framework.