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Azerbaijan 2016 | TELECOMS & IT | INTERVIEW

TBY talks to Jalal Orujov, Executive Director of MilliKart Group, on the role the service is playing in Azerbaijan and the rise of the cashless society.

Jalal Orujov
BIOGRAPHY
Jalal Orujov graduated from Azerbaijan State Economic University in 1999. His professional career started at the Central Bank of Azerbaijan as a leading economist of the payment system development and policy division. He currently holds the position of Executive Director of MilliKart Group since 2006, having previously worked as a Director of the MilliKart processing center of the Central Bank of Azerbaijan.

Can you explain the rise of MilliKart in Azerbaijan from a card-processing center to a company with a unique shareholder structure that consists of 18 banks?

MilliKart started as a department of the Central Bank of Azerbaijan to create competition in the card outsourcing market. The only card service prior to MilliKart was AzeriCard. Banks were not satisfied with the service quality or the fees that AzeriCard offered and so, in 2005, the Central Bank created Millikart in association with the World Bank. In 2006, the Central Bank decided to privatize MilliKart, which became MilliKart Group LLC. The company was created by 18 banks, which provided the staff and infrastructure. In 2010, the European Bank of Reconstruction and Development (EBRD) bought a 10% share in MilliKart, increasing our chartered capital by AZN5 million. We are currently the number-two company in Azerbaijan providing multi-banking processing services. We serve around 14 banks, among which are the banks with their own in-house processing centers. In terms of figures, we have 80 employees, 1 million cards served, 600 ATMs, and around 35,000 POS terminals. Two years ago, our business strategy changed to adopt new technologies such as e-commerce, mobile applications, and mobile payments. We are looking to diversify and we have actually changed the structure of the company to focus on three areas. In each area, we provide different types of services not only for banks, but also for retailers, insurance companies, and independent companies that provide payment services. We are focused on fast-growing new areas.

What are some of the security measures that MilliKart employs to keep its customers protected during online transactions?

Security is the most important factor in our business. Starting in 2005, we have had to meet the security requirements set by international payment companies like Visa and MasterCard. In 2012, all the main players in the market like Visa, MasterCard, American Express, and Diners Club developed new technology standards for this sector called Payment Card Industry Data Security Standards (PCI DSS). We were the first company in the Caucasus region to obtain a PCI DSS certificate. Every year since 2012, we have had a PCI DSS security audit as well as separate audits from Visa, MasterCard. An additional audit was applied in 2014 for e-commerce services. At this stage, we have six different audits per year, which is a necessity in this market. We take this issue very seriously, and we have never had a security breach or loss of data in our entire nine years of operation.

MilliKart introduced a new mobile service for paying traffic penalties and your company also offers instant issuance solutions. How is MilliKart helping to develop the growth of non-cash transactions in Azerbaijan?

We provide services with companies like GoldenPay, an online payment provider, and also with E-manat, EasyPay, and ExpressPay, which are the main payment terminal providers. Using their infrastructure, we are working to attract clients to a cashless environment via the internet or mobile applications. Two months ago, we launched our own application, CIB, which enables our clients to put all their cards on to one application. You can make mobile payments and transfers to other cards. We are working on two startup projects in the taxi industry to provide card payment options through a mobile application. M-POS is critical to our strategy, because there are many POS terminals; however, there is a premium placed on mobility in this market. These static POS terminals are quickly being overtaken by more flexible mobile solutions. M-POS is less costly from the point of view of retailers and banks. We also support different kinds of internet portals that provide online payment services to their customers. Starting in 2016, we will have at least three clients that plan to launch e-Wallet applications, so we will be working closely with them. Right now in Azerbaijan, there is no legislation that regulates these kinds of payment services. The Central Bank announced that it plans to adopt new legislation with regulations that cover activities and technologies in the payment card industry by the spring of 2016. The reason global companies like PayPal or Facebook are not here yet is because this industry is legally unregulated in Azerbaijan.