Yandex.Money, QIWI, WebMoney, PayPal and VK Pay clients will now be required to pass identification before depositing money with their digital wallets, according to the new law on the national payment system already approved by the Federation Council, the Russian parliament’s upper house, RBC reports.
The new legislation is aimed at fighting the financing of terrorism and drug trafficking.
According to Yandex.Money, out of every 15,000 new e-wallets registered daily, about 10% remain anonymous. As many as 7-8% of Russia’s population, or more than 10 mio people used electronic wallets in 2018. This is not much, especially when compared with the number of users of non-anonymous bank cards, which in 2018 exceeded 80% of the population, Natalya Milchakova, deputy head of the Alpari Information and Analytical Center, said.
She believes the new restrictions will mainly affect companies that provide digital wallet services such as Yandex and QIWI. Yandex shares have already dropped 3.3%, and QIWI depositary receipts lost 2% – while the Moscow Exchange index is growing.
Andrei Khokhrin, CEO of Ivolga Capital, believes the digital money market will suffer only minor damage from the new restrictions on e-wallets.
“Customers will just use them with a bank account. Anonymous wallets never accounted for more than 15% of the market. Those who have used their e-wallets for illegal transactions will find other ways to transfer funds, for example, turn to cryptocurrencies, where there is a more loyal system of settlements,” he said. “Ordinary users who used e-wallets for small online purchases often used bank cards to fund them, so they would not feel much of a difference. Legal credit institutions in the market will switch to simplified identification.”
If people are no longer allowed to prepay their e-wallets through payment terminals, the majority of users will not disappear, but will be redistributed to authorized systems. As for those who still want anonymity, cryptocurrencies are a solution, as that market is partly anonymous, the expert added.