Andrii Kryvoshapko, CEO of Post Finance, told LDaily about a new financial product that significantly facilitates the work of business and consumers’ life.
LDaily: In September 2018, Nova poshta launched a payment system NovaPay, developed by Post Finance company. Why did you begin developing your own software?
A. Kryvoshapko: Initially, our software was developed by an external contractor, and from the beginning, it suited us. Gradually difficulties began showing up
as we increased volumes and complexity of processes: it was harder to make changes, sometimes deadlines were missed because the system refused to work and we could not accept payments at the branches of Nova poshta. The speed of service decreased, customers were dissatisfied, having to stand in lines. In addition, it appeared that the system was difficult to scale.
Therefore, we decided that such a huge national business could not depend on a third-party vendor, and formed an internal IT team that was hired to develop our own payment system and its software.
LDaily: How long did it take and what difficulties did you face in the process?
A. Kryvoshapko: Our IT team at that time included about 50 people. Development of the system took over a year. We started the testing NovaPay in August 2018, and at the end of the year, we saw the first results. Difficulties? Overall, this is a very ambitious project in which the number of transactions per minute can only be compared to bank processing. And taking into account the extensive network of branches it could be considered a heroic project of launching a payment system in each of them.
LDaily: How did the creation of your own payment system affect working with clients?
A. Kryvoshapko: Only in a positive way. First of all, we accelerated the business processes of customer service in the department. This means not only the registration of transactions in the payment system at the program level, but also the whole business process of customer service in the branch, when we accept payment for the parcel. As a result, we have reduced service time by 2.5 times. If you are a client of Nova poshta, you have probably noticed that the most unpleasant factor is the queue. When you come to the branch and see a lot of people standing in front of you, it can be very frustrating.
With our own payment system, we optimize the process. Therefore, everything has changed for the better radically. Previously, sending money for obtained parcels took an average of more than a minute, now it takes up to 30 seconds. If you pay by card — it takes 40 seconds, because the extra time is spent on payment by banking POS-terminal.
LDaily: During the quarantine period, the volume of parcels increased by more than 30%. Will your system cope with such a sharp increase in transactions?
A. Kryvoshapko: We are developing quite rapidly, so an increase of 30% was not something extraordinary. In May, we set a record for the number of transactions per day through NovaPay — more than 1.6 million. Prior to that, our maximum was 1.5 million (before the New Year). But our potential capability is ten times greater, and if the number of transactions increased by ten times, such operation will be successful as well.
LDaily: From the very beginning, your company was created to provide financial services to Nova poshta. Nowadays you significantly expanded the range of services. What factors affected this shift? Which services are the most popular among customers?
A. Kryvoshapko: We started as a service company that serves big business in financial transactions. This is still our main activity. However, with an increasing number of customers, we found that there is a demand for additional financial services. Especially considering that the banking network is shrinking, and our network is growing — we are increasing the number of branches, appearing in new locations where we did not operate before.
Essentially, customers can use our cash register as a banking service for making payments. Any payment — from recharging a mobile phone, paying taxes, fees, and paying utilities — you can make it in Nova poshta post office. You can also withdraw money from the card. For rural residents, quite often this is the only way to get a financial service without going to the district center.
In June, we also launched an international transfer service. We are currently cooperating with the international payment system RIA, which is available in 158 countries, that is about 400 thousand spots. For example, working somewhere abroad and having a family here, you can transfer money and receive it in Nova poshta post office.
LDaily: Please, tell us more about it. In what currency can I get a transfer? Is such service in demand?
A. Kryvoshapko: Transfers are issued only in hryvnias. You can come to the department of Nova poshta and receive your money. And you can send it from a branch of the RIA network, from a post office or a partner bank of the network in any of 158 countries, as well as through online services. Already we can see that this particular service is in demand. We believe that we have built a bridge between Ukrainians abroad and their relatives and friends here. Transfers come from all over the world, in particular from the USA, Canada, Australia, and most of all from European countries. For example, many shipments from Poland, in July-August, accounted for about 30% of the total.
Our main advantage is the extensive network. It is convenient to get a transfer with us because frankly, we have our spots everywhere around. And also such a deal is beneficial because right now many countries have promotional rates for sending money transfers with the help of Nova poshta branches.
LDaily: Do you plan to expand another line of financial services?
A. Kryvoshapko: Yes, definitely, we regularly expand it. We have a new financial service about once every six months. Our goal for the next few years — to become a financial technology company with a portfolio of a variety of innovative products for both individuals and businesses.
With the latest innovations — in late August, we launched the service called “Safe-Service”. This is a service of safe purchases on the Internet, which safeguards both the seller and the buyer when paying for the parcel online.
Often the buyer does not trust the seller, and the seller doesn’t trust the buyer, but neither one nor the other wants to take risks. It is not always clear how to solve this problem.
The buyer risks to be dissatisfied with the parcel’s content, and the seller is afraid that the customer simply will not come, and they will have to double-pay for the delivery of the goods traveling back and forth. “Safe-Service” helps to minimize these risks.
LDaily: Please, tell us more about this service: how exactly are additional security guarantees for online transactions provided?
A. Kryvoshapko: Everything is quite simple: when using the “Safe-Service”, the transaction is made through a mobile application or a business account on the Nova poshta website. The required amount of paying for the goods is not sending immediately to the seller’s account, but is being reserved on the card, and is not transferred to the seller until the goods arrive, so the customer has to inspect it and to agree to pay. Our service gives the seller additional guarantees that the buyer will come for the goods, because the required amount for payment is already reserved.
There is also confidence that this is not fake or an order that does not exist. In addition, in case of refusal of the parcel, the seller does not incur any delivery costs.
Thereby, both the seller and the buyer are insured.
LDaily: What kind of services are you providing to entrepreneurs?
A. Kryvoshapko: First, there is a variety of ways to get paid for the goods. Both in the case of address delivery and in the case of delivery to the branch, it is possible to receive money on the account, by card or in cash, and in the same way to pay by card or cash.
Thanks to NovaPay, the company’s business customers can send their goods postpaid receiving payments for the parcels after a preliminary inspection. The service was launched so that Ukrainians could order goods more comfortably and safely via the Internet.
In addition to services related to logistics, in 2019 we started lending small and medium businesses in the segment of e-commerce, and in early 2020 entered the market with the service of Internet acquiring.
LDaily: Please, tell us more about the Internet acquiring?
A. Kryvoshapko: Internet acquiring is an opportunity to pay for the product or service on the online platform. That is, you go to the site, for example, Allbiz or some other e-commerce market participant, and when buying the product you choose among the available methods of payment on the site the payment system NovaPay. Essentially, this is a remote non-cash payment.
LDaily: How many customers have already used your internet acquiring services and who are they?
A. Kryvoshapko: Now there are about 60 of them, and the number is increasing every week. NovaPay is being used on the sites, such as Allbiz, MD Fashion, Staff, publishing house “A-ba-ba-ha-la-ma-ha”, jewelry hypermarket “Gold Standard”, and others.
LDaily: How did quarantine affect the number of online payments? Has their number increased, and if so, by how much?
A. Kryvoshapko: Yes, it has increased. This was influenced by several factors. First, the closure of offline stores has led to a sharp increase in online commerce. All sellers quickly switched to various online sales channels: websites, Viber groups, Telegram, etc. And of course, the number of parcels and demand for financial services has increased, as well. Secondly, for their own safety, people sought contactless payment methods — for example, through the mobile application, the website.
During the most acute period of quarantine, in April-May, many bank branches were closed, but we worked all this time. It also provided an increase in financial services, particularly in rural areas, regional centers, where public transport was suspended and banks did not work. Sometimes we remained the only “island of civilization” and connection with the outside world. Our customers could withdraw money, pay for services, pay for goods.
We encouraged people to switch to online services: introduced new payment options in the application and on the website, even launched a special tariff for postpay when paying online, provided the ability to pay to third parties.
As a result, the number of online payments has doubled.
LDaily: The trend of recent years is data protection. Can your customers be confident that their data is protected?
A. Kryvoshapko: At the beginning of the year, we were certified according to the PCI DSS standard (Payment Card Industry Data Security Standard), which proved the compliance of our procedures, rules, and the entire infrastructure with international IT security standards. They allow us to store, process, and transfer payment of the card data.
Our customers can be sure that we pay close attention to the issues of secure data storage, and fraudsters will not have access to it.
LDaily: Have the company’s plans changed due to the corona crisis?
A. Kryvoshapko: We are implementing all planned projects. The part of it is focused on efficiency, that will help to serve the customers faster, and some are related to the new services which we talked about above. We are planning to continue working in this direction: to introduce new services and implement new projects to better meet the needs of our customers.
Please read: Crisis: a guideline for publicly exposed companies
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