论文总字数：46773字

The Adoption of Mobile Payment in Uzbekistan

by

Khurramova Gulinargiz

Under the Supervision of Fei Zhong Lin

Submitted in Requirements for the Degree of Bachelor

International Economics and Trade Department

School of Overseas Education

Nanjing Tech University

June, 2019

Abstract

Mobile banking is a service provided by banks or other financial institutions, allowing Its customers use mobile devices, for instance Mobile phones or tablets. Transactions through mobile banks may include access to accounts Balance and List of Latest Transactions, Electronic Bill Payments, and Accounts of customers or others. In this paper, the author examines the dynamics of development. The status and role of mobile banking in the global payment system based on the analysis results show that there are some measures for the development of mobile payment industry proposed by the Republic of Uzbekistan.

Key words: Mobile Payment, Mobile Banking, PEST analysis, Economy development of Uzbekistan.

Table of Contents

Abstract I

Chapter 1 Introduction 1

1.1 Research background 1

1.2 Literature review 1

1.3 Research content and methods 3

Chapter II The history of mobile payment services in Uzbekistan 5

2.1 Stage I (year 2007-year 2011) 5

2.2 Stage II (year 2011-year 2017) 6

2.3 Summary 7

Chapter III The environment of mobile payment industry in Uzbekistan 9

3.1 Political factors 9

3.2 Economic forces 9

3.3 Social factors 11

3.4 Technological forces 13

Chapter IV The Strengthens and Weaknesses of the mobile payment industry in Uzbekistan 14

4.1 The Strengthens of the Mobile Banking Development in Uzbekistan 14

4.2 The weaknesses of the Mobile Banking Development in Uzbekistan 16

4.3 Summary 16

Chapter V Conclusions and Implications 18

5.1 Research Conclusions 18

5.2 Research Implications 19

References 20

Chapter I Introduction

The study of the banking market in the field of mobile banking is relevant, since this area of the modern banking world is considered promising. This article discusses the types and advantages of the Internet Bank, as well as the development of mobile banking in the Republic of Uzbekistan.

1.1 Research background

The article discusses the most popular payment systems in the Republic of Uzbekistan. Without instant data transmission to anywhere in the world and online communication, it is impossible to imagine the current activity of any user. In the Republic of Uzbekistan, using the means of communication, the Mobile Payment System is used, which operates in accordance with the regulatory documents of the RUZ. A modern scheme for posting payment services and operations ensures secure transactions and increases the reliability of the system. One of the main factors determining the development of the economy in Uzbekistan is electronic business, its long-term development and increase in opportunities.

1.2 Literature review

On the basis of summarizing and introducing the development history of mobile payment industry, it makes a comparative analysis of the development of mobile payment industry in typical countries, and combines existing research results to present useful implication and countermeasures. As a response to the “One Belt, One Road” initiative, cross-border e-commerce will continue to develop, and the mobile payment market has broad prospects. Study the current adoption of mobile payment services in Uzbekistan have important theoretical and practical significance.

1. The research related to the History of mobile payment

Uzbekistan’s mobile payment history considered by many experts. Timur Tukhtarov, Bank.uz (2011) reported in Uzbekistan mobile banking appeared in 2007 as a service for corporate clients. The next step in its development in the country was the introduction of this service for individuals. The first bank in Uzbekistan, which most fully offered Internet banking services to individuals, was Samarkand Bank. The Bank announced on May 1, 2009 the launch of a new service on the Internet and called its product Sam.online - mobile banking.

Furthermore, Djurabayev A.A (2008) mentioned the market of electronic payment was relatively new emerging but rapidly developing financial market services of Uzbekistan. Significant niche in electronic payments takes the banking and financial republican system, telecommunications infrastructure and information technology in which began to develop earlier than in other industries. The competition is made up of non-financial organizations operating in the segment of electronic payments for services.

Regarding the history adoption of mobile payment Abdullayeva Sh.R (2014) and Otamurodov H. H. (2017) both observed that use of mobile payments increased over time in Uzbekistan. In 2011, 12 percent of mobile phone users and 23 percent of smartphone users reported using mobile payments. By 2014, usage of mobile payments had increased to 22 percent for mobile phone users and to 28 percent for smartphone users. The steady increases in the adoption rate among all mobile phone users, but more gradual rise in the adoption rate among smartphone users, suggest that smartphone adoption substantially contributed to the increased use of mobile payments.

1. The research related to the environment of mobile payment industry

• Determining relevant factors within PEST analysis

The purpose of this research is to determine politic, economic, socio-cultural and technological aspects from the point of mobile payment in this country. During the first factor Abdullayeva Sh.R (2014) mentioned which, unlike many countries, we have a sufficiently developed legislative base of implementation of Internet banking. It includes the laws of the republic of Uzbekistan, namely “On Banks and Banking”, “On the Central Bank of the Republic of Uzbekistan”, “On Informatisation”, “About electronic document management”, “On electronic commerce”, “On electronic payments”, “About Information board in an automated banking system”. At the same time, so far none of the laws have a clear definition internet banking as a type of commerce service banks.

Secondly, Aleksandra Djeleznyak Podrobno.uz (2015) reported according to the Central Bank of Uzbekistan, as of January 1,2015, over 534 thousand customers used the service of remote banking services. At the same time, more than 472 thousand people choose mobile banking and SMS banking services, and only 62,2 thousand clients preferred mobile banking and the bank-client service. It illustrates that use of mobile payment is growing year by year, which means it also effects development of economy in the country.

Third aspect is about socio-cultural environment in this area, Temur Tukhtarov Bank.uz (2011) mentioned ordinary users are especially worried about the issue of how safe the Remote Banking Service is. Despite the fact that there have not been any cases of fraud in the domestic market of remote banking, but world experience shows real cases of offenses in this area.

Special vigilance must be observed when “surfing” on the Internet and visiting little-known suspicious sites, including the links received in e-mails from unknown senders. In addition, individuals are strongly discouraged from using the Internet banking system from a business computer or from an Internet cafe.

Experts of world banks note that the majority of clients deceived by scammers themselves and provide the information they need to the attackers.

Last stage of PEST analysis includes technological aspects for this case, so Abdullayeva Ch.R (2014) reported further increasing of competitiveness of a national banking system in many respects is defined by a level of development of the modern technologies, one of which major directions is the Internet banking, her article is devoted to questions of Internet banking opportunities for wide use by the population on the basis of studying of foreign experience and national practice.

3. The research related to the commercial banks mobile payment development system Abdullayeva Ch.R mentioned for the development of Internet banking in Uzbekistan it is proposed to consider the following:

- widespread popularization of Internet banking among the public and expansion functionality of Internet banking systems with the provision of opportunities make payments and payments, primarily utilities, using accumulated experience in organizing settlements for mobile communication services;

- in order to increase literacy using Internet banking is possible implementation of the project of creating a virtual bank on the sites of commercial banks, where citizens can carry out banking operations on virtual accounts in the gaming format, after gaining the skills to open real accounts in the same bank. The project can be implemented together with one of the universities, then professional skills use and processing of banking transactions will be carried out with the participation of students.

- an important direction of development of Internet banking is constant improvement of the bank’s security systems, along with technological issues. It is recommended that the recommendations of the Basel Committee on Banking Supervision in Compliance with the 14 Risk Management Principles electronic banking services;

-assisting the development of e-commerce and the implementation of joint with commercial banks to create online stores and specialized trade portals, which will also contribute to a wide involvement of users of Internet banking services.

1.3 Research content and methods

During the study, I read a lot of domestic and foreign literature on mobile payment in Uzbekistan. I did extensive reading and intensive reading of classic literature, and I found my own entry point from previous literature results. Finding relevant constraints and extending them provides a solid theoretical basis for this research.

In the analysis of the literature and materials of this thesis, I have used the investigation and research method. The main ways are: library books, journal borrowing, and online research approach to obtain relevant literature and data, and analyze them to improve the paper through specific data.

Chapter II The history of mobile payment services in Uzbekistan

2.1 Stage I (year 2007-year 2011)

In the Republic of Uzbekistan, mobile banking appered in 2007, Samarqandbank was the first bank, which fully offered mobie baning services to individuals. On May 1, 2019 bank announced new services on the Internet.

Samarqandbank customers can remotely pay for cellular and landline telephony, Internet service providers, utilities, make purchases at online stores, transfer funds to accounts of legal entities and individuals, send financial documents to banks and receive information on account movements. Also recently, the bank began to provide customers with the opportunity to remotely select and place their money on bank deposits. ^[1]

The second was implemented by Internet banking Aloqabank, which, from November 1, 2010, began to offer this service to individuals. Today, it allows we to remotely pay utilities, services UzMobile, UzNet and monitor the information on their accounts.

In February 2011, the young Hi-Tech Bank also announced the launch of mobile banking services for individuals. This service allows its customers to pay for mobile communications, Internet service providers, home phone and get information about the current status and movement of the account using a mobile phone.

Mobile banking is a logical development of Internet banking. However, today, in many domestic banks there is an incomplete version of it, the so-called SMS-banking with an information access level, which allows sending and receiving SMS-messages with information on current balances and cash flow on deposit accounts, including card accounts of holders of bank plastic cards UZKART.

Opportunity to control our account in real time using a mobile phone is provided by: Uzpromstroybank, Asakabank, Trustbank, Microcreditbank, Aloqabank, Universalbank, Samarkandbank, Hi-Tech Bank, Asia Alliance Bank, Turkistonbank, Uzbek-Turkish Bank, UzKDB, Ipak Yuli Bank and NBU. Some of them inform their clients about transactions on their accounts by e-mail, fax and landline telephone.

It should be noted that the emergence of a mobile electronic payment system, SMS-To'lov, will contribute to the additional development of Internet banking services in Uzbekistan. ^[2] This system of non-cash payments is a processing payment system generated in a bank automated payment management system between the client and the company to which the payment is sent.

Unlike the mobile banking service, which allows we to pay for services via a mobile phone via the Internet, the SMS-To'lov system makes payments by sending SMS messages. In addition, the system also provides the client with the opportunity to pay for the purchase of goods and services through a personal account on the company's website.

2.2 Stage II (year 2011-year 2017)

On March 17, 2011 test payments via SMS-To'lov were launched in the operational management of Microcreditbank. In turn, the mobile operator Beeline has begun to accept payments using the new system. It was emphasized: “Support of the banking system, modernization, technical renewal and diversification of production, widespread introduction of innovative technologies is a reliable way to overcome and access Uzbekistan to new frontiers on the world market”.

Also, the report “On the results of the socio-economic development of the republic in 2012 and the main priorities of the economic program for 2013” ​​noted the high rates of development of the services sector, especially such high-tech services such as communication services and computerization, computer programming, repair and maintenance of technological equipment and financial and banking services.

In the same speech, the President notes the need to accelerate the development of the draft Integrated Program for the Development of the National Information and Communication System for the period 2013-2017, the formation of the Electronic Government system, the introduction of electronic forms of providing interactive public services to business entities and the public. This is what causes the special relevance of the topic of this final qualifying work.

It is difficult to imagine a more fertile ground for the introduction of new computer technologies than banking. ^[3] Almost all the tasks that arise during the work of the bank, quite easily amenable to automation. Fast and uninterrupted processing of significant information flows is one of the main tasks of any large financial institution.

The aim of the work is to study the application of information technologies, as well as prospects for their development.

In accordance with the objectives set the objectives of this final qualifying work:

1. To study the types of modern banking information technologies and services

2. Understand the principles of operation of banking technologies and give a general assessment of the use of banking technologies.

3. To analyze the material on the introduction and application of new information technologies in the banking practice of the Republic of Uzbekistan.

4. To draw conclusions based on the current state of new banking information services in commercial banks of the Republic of Uzbekistan.

5. Give a general assessment of the use of banking technologies in foreign countries and commercial banks of the Republic of Uzbekistan.

2.3 Summary

In the 2011 survey, 22% of mobile phone users with bank accounts and 43% of smartphone users with bank accounts reported using mobile banking in the past 12 months. These percentages have increased in each year of the survey. In the survey of 2015, the popularity of mobile banking continued to rise, reaching 43% of mobile banking account users and 53% of smartphone banking account users (Figure 1).

Figure 1. Usage of mobile banking and mobile payments by mobile phone type

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