Bankovní institut vysoká škola Banking management The Payment system in selected post-Soviet countries Bachelor´s degree work Autor: Gaziza Gabidenova Banking management, Banking manager Vedoucí práce: Ing. Marcela Soldánová Prague June, 2014 Declaration I declare that I elaborated my bachelor´s degree work independently and I stated all the literature used. I attest by my signature that the submitted electronic version of the work is identical with its printed version, and I am aware of the fact that the work will be archived in the library of the BIVŠ, and further, made accessible to third persons through the internal database of electronic university works. In Prague, on 30.06. 2014 Gaziza Gbidenova - 2 - Acknowledgement I would like to thank all people that have helped and inspired me to write this dissertation. First of all, I owe my deepest gratitude to Ing. Marcela Soldánová, who were kind and patient to me and to thank for support and understanding. Finally I would like to thank my family for believing in me. - 3 - Annotation The word ―System‖ implies complex of individual segments that are working together, have a common function and complement each other. Each segment is important for the system, because efficiency of their work influence quality. When the segments are working smoothly and efficiently, the system as a whole develops and gives better results. Local and international payment systems, payment instruments, work of Central Banks, work of other financial institutions, inhabitants of the country are segments of payment system. And payment system is an important segment of a country. Efficient working payment system performs the country on the world stage and improves the standard of living in the country. ―Effective payment system‖ is an abstract concept, because what is effective for one country can be defective for another, but the main aim is to reduce costs of exchanging goods and services and to have a good functioning of the interbank and capital markets better. Key words: payment system, segment, payment instruments, development, comparison. Anotace Slovo "systém" znamená komplex jednotlivých segmentů, které pracují společně, mají společnou funkci a vzájemně se doplňují. Každý segment je důležitý pro systém, protože jejicho účinnost má vliv na kvalitu práce. Pokud segmenty pracují hladce a účinně, systém jako celek se vyvíjí a dává lepší výsledky. Lokalí a mezinárodní platební systémy, platební nástroje, práce centrální banky, práce jiných finančních institucí, obyvatelé země jsou segmenty platebního systému. A platební systém je důležitý segment statu. Efektivní pracovní platební systém provádí zemi na světové scéně a zlepšuje životní úroveň v zemi. "Efektivní platební systém" je abstraktní pojem, protože to, co je efektivní pro jednu zemi může být vadný jiný, ale hlavním cílem je snížení nákladů na výměnu zboží a služeb a dobré fungování mezibankovního a kapitálového trhu lépe . Klíčová slova: platební systém, segment, platební prostředky, vývoj, srovnání. - 4 - TABLE OF CONTENT Introduction ........................................................................................................................... - 7 - 1. PAYMENT SYSTEM IN KAZAKHSTAN, RUSSIA AND LATVIA ........................ - 9 - 1.1. Payment system and its characteristics ................................................................... - 9 - 1.1.1. History of payment system .............................................................................. - 9 - 1.1.2. Definition of payment system ....................................................................... - 10 - 1.1.3. Forms of payment system .............................................................................. - 11 - 1.2. Payment system in Kazakhstan ............................................................................. - 15 - 1.2.1. Development of payment system in Kazakhstan ........................................... - 15 - 1.2.2. National payment systems ............................................................................. - 17 - 1.2.3. Kazakhstan Interbank Settlement Center ...................................................... - 21 - 1.2.4. National Bank of the Republic of Kazakhstan .............................................. - 23 - 1.3. Payment system in Russia ..................................................................................... - 24 - 1.3.1. Development of payment system in Russia ................................................... - 25 - 1.3.2. National payment systems ............................................................................. - 26 - 1.3.3. Moscow Interbank Currency Exchange Group (MICEX Group) ................. - 30 - 1.3.4. The Russian Trading System Clearing Center (RTS).................................... - 31 - 1.3.5. Bank of Russia ............................................................................................... - 32 - 1.4. Payment system in Latvia ..................................................................................... - 34 - 1.4.1. National payment systems ............................................................................. - 34 - 1.4.2. Single Euro Payments Area (SEPA) ............................................................. - 36 - 1.4.3. TARGET2-Securities .................................................................................... - 37 - 1.4.4. The Bank of Latvia ........................................................................................ - 38 - 2. Development and utilization of payment instruments in Kazakhstan, Russia and Latvia ... - 41 - 2.1. Development and utilization of payment instruments in Kazakhstan .................. - 41 - 2.1.1. Cash ............................................................................................................... - 41 - 2.1.2. Payment cards ................................................................................................ - 42 - 2.2. Development and utilization of payment instruments in Russia .......................... - 45 - 2.2.1. Cash ............................................................................................................... - 45 - 2.2.2. Payment cards ................................................................................................ - 46 - 2.3. Development and utilization of payment instruments in Latvia ........................... - 48 - 2.3.1. Cash ............................................................................................................... - 48 - - 5 - 2.3.2. Payment cards ................................................................................................ - 49 - 3. Comparison of mentioned systems .............................................................................. - 51 - Conclusions ......................................................................................................................... - 53 - List of literature ................................................................................................................... - 54 - Abbreviations ...................................................................................................................... - 57 - - 6 - INTRODUCTION Kazakhstan, Russia and Latvia had one payment system for the time of existence of Soviet Union, but now they have different types and levels. I think that the idea of creating such a big union was good. One idea units a lot of people and creates such an international atmosphere. Idea of Soviet Union was to make all the people equal, and stimulate them to work as segment for better common results. But after dissolution each country had its own way. Kazakhstan was coerced to enter to the Soviet Union, but, as citizen of this post-Soviet country, I can say that it had a good effect on development of the country, improving payment system, economy and financial system as a whole. Kazakhstan is a country with a good basis. Rich natural resources (99 elements of periodic table), is an important factor. It helps to produce variety of products inside the country, and to trade on international area. Also a positive factor is the location of the country, in neighborhood with China, country with huge human resources and rapid growing economy, with Russia, the biggest country in the world with fast growing economy. First step in creating own payment system, was creation of National Bank and establishing commercial banks, that were forbidden in time of Soviet Union. National Bank of Kazakhstan plays a big role for country, supports and develops payment systems. Also monitors work of commercial banks, which are working with population. Institution that helps National Bank to perform its activities in payment system is Kazakhstan Interbank Settlement Centre. This institution provides Settlements of national payment systems for real-time gross settlements and retail payments. Population of the country is taking part in the system through payment instruments, which are considered to be an important segment of payment system. Russia is one of the strongest post-Soviet countries, having rich natural resources and authority on international scene. It is the biggest country in the world, which makes word ―system‖ more important for this country. Despite big territory and having nine time zones Russia manages country well. Bank of Russia is the central bank of the country. And it is a major body of the payment system. It tries to make payment system of the country more efficient. Payment system of