Payment systems in Ukraine

About a year ago, my partner and I opened our own online store, which sells mainly English-language literature and textbooks.

Having lived a year, we gained experience, realized what needs to be changed and what to finish. But the main problem of any online store is delivery and payment. And if the situation can still be solved with delivery, then there are minor problems with payment.

Payment systems in Ukraine are deeply vicious, ossified and in a state of sluggish life. They are not at all oriented towards any kind of electronic commerce. There are certain attempts by individual companies to realize at least something, but they are not developed enough to make them convenient to use.

So, there are a limited number of payment systems available for individuals in Ukraine:

• Payment by Visa and MasterCard
• Prepayment by bank transfer
• Cash payment
• Webmoney
• Cash on delivery

Payment by Visa and MasterCard

In Ukraine, there are only 2 processing centers processing transactions via the Internet. This is the processing center of PrivatBank and the Ukrainian processing center affiliated with Raiffeisen Bank Aval. There is also a Portmone system, which is a private structure and works through the same UOC.

The cost of connecting to PrivatBank and the UOC is free of charge; for Wallet you need to pay a security deposit of 950 hryvnias, which is refunded when reaching a card transaction turnover of 95 thousand hryvnias in the first 12 months. What is not a real indicator for many

In order to connect to the first one, you need to have an open current account with PrivatBank, for the second the situation is not clear. The UOC itself says that it doesn’t care about the bank in which the bank is opened, but Raiffeisen Bank Aval requires an account opened with them.

The commission for using the system ranges from 1.5% of the transaction in PrivatBank (when paying with a PrivatBank card) to 5% in the Purse and the UOC.

In order to connect to the system you need to collect a sufficiently large package of documents, including a hosting contract and domain documents, communicate with the bank security service and wait for the bank to conclude.

In case of a successful answer, all settings will be sent to you and will help in connecting.

pros

• almost everyone has cards
• customer pays for the goods immediately
• the client can pay for the goods, being in any country

Minuses

• Interest for payment, which cannot be compensated and in any other way included in the price (unless, add to the price initially)
• Often - the inability to receive documents signed by the client on the receipt of goods.
• Problems resolving card payments online. For my card issued at FUIB, this is solved by calling the support service; for PrivatBank cards, the following scheme worked recently: come to the bank to write an application for payment by card via the Internet, for a period of not more than a month, wait for the bank’s permission to pay.
• The complexity of the payment mechanism (checkout) - for the same PrivatBank, you must specify a mobile phone, receive a confirmation code on it and then enter it [code] on the site. Probably, it’s not worth talking about the fact that SMS abroad does not always reach, and in Ukraine there are problems.

Prepayment by bank transfer.

It is carried out by the client arriving at the bank and transferring money on a payment order or account. Everything is very simple, but there is one thing. The client is charged a commission. The minimum commission is from 5 hryvnia to 25 hryvnia.

pros

• Receive prepayment
• No commissions
• Relative simplicity for the client, since any banks accept such payments

Minuses

• The main minus is the presence of a commission for the client

Cash payment

Everything is done simply if the customer lives in the same city where the online store is located. Firstly, he can pay by coming to the office and thus save on delivery. Secondly, you can hire your own couriers who will accept money.
At the moment in Ukraine, none of the courier services wants to work according to the scheme, when the courier not only delivers the goods, but also takes the money from the client. We negotiated with one company, but did not manage to implement this opportunity. Although, as our experience shows, this opportunity is in demand among consumers.

pros

• Get money right away
• When visiting the office, the client can buy something else

Minuses

• Difficulties in accounting and receipt of cash

Webmoney

There are a lot of ways to pay for an order using WebMoney, from transferring from wallet to wallet to replenishing the wallet through the terminal. However, despite this, WebMoney, in my opinion, is not sufficiently developed in Ukraine. Although it is possible that people actively using WebMoney are simply not our target audience. The downside in this method of payment is only one, but global - a large percentage of the withdrawal of money from the system - about 5%. You also have to pay money for entering money into the system.

pros

• Prepayment
• Money does not shine on the current account

Minuses

• A large percentage of the withdrawal of money from the system
• Difficulties in accounting Webmoney, which may cause tax questions.

And finally, the most popular and most controversial way is Cash on Delivery.

This method of payment is the most conservative and common. It consists in the fact that the client pays for the parcel upon receipt of it in the mail. And since there are post offices in our country in almost every remote village, practically everyone can use this method.

The share of cash on delivery deliveries reaches 79-80% of all deliveries.

This system has global cons. All of them occur, in my opinion, due to the absence of any competitors from UkrPoshta. In view of this, the service to this moment is partly shovel. Here is a short list of things you have to deal with:

• Problems filling out forms for the parcel. We learned to fill out forms only 1-2 months after the start of work, as there are a number of subtleties that are not described anywhere. Depending on the operator accepting the order, he may pay attention to one or another error. It came to our point that one operator said one thing, the other diametrically opposite.
• Another big problem is queues. On New Year's Eve, you can wait 2-3 hours in line at the Central Post Office.
• Money comes to the current account 10 days after payment. What this money makes 10 days in the UkrPosh system is unknown to anyone. Add to this that the average delivery time is 10-14 days. Thus, it turns out that you credit the client for almost a month.
• Lack of tracking. That is, there is tracking, but it does not work as it should. So, in tracking they hang like parcels received in delivery long received and paid by the client.
• Not always the right delivery. So, I know about cases when a parcel in Kerch was sent to Dnepropetrovsk and then returned a month later. And these are only those cases where I definitely saw the stamp of another city.
• Refunds. There is a certain (5-10%) percentage of parcel returns. This occurs due to incorrect delivery, not delivery of a notification about sending to the client, or through the fault of the client. For example, he received a package, but he was not given a salary (or he spent extra money on something) and the package is returned.

pros

• Convenient for customers delivery - can be delivered to any village or small town.
• Customer trust in delivery - he only pays money after receiving the goods