Payment systems in Ukraine

About a year ago, we and a partner opened our online store selling mainly English-language literature and textbooks.

Having lived a year, we gained experience, understood 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, there are some minor problems with payment.

Payment systems in Ukraine are deeply flawed, ossified, and in a state of sluggish life activity. They are not focused on any e-commerce. There are some attempts of individual companies to realize at least something, but they are not developed enough to even use them.
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So, there are a limited number of payment systems available to individuals in Ukraine:

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

Payment by Visa and MasterCard

There are only 2 processing centers in Ukraine that process transactions over the Internet. These are the processing center PrivatBank and the Ukrainian processing center affiliated with Raiffeisen Bank Aval. There is also a Portmone system, which is a private structure and operates through the same UOC.

The cost of connecting to PrivatBank and the UOC is free of charge, for the Purse it is necessary to pay a deposit of 950 hryvnia, which is refunded when the transaction volume of cards reaches 95 thousand hryvnia in the first 12 months. What for many is not a real indicator

In order to connect to the first one it is necessary to have an open current account in PrivatBank; for the second one, the situation is not completely clear. The UOC itself says that they are indifferent to the bank in which the distribution is open, however 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 paid by PrivatBank card) to 5% in the Purse and UPC.

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

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

pros

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

Minuses

• Interest for payment, which can not be compensated and in any other way included in the price (unless, just add to the price initially)
• Often - the inability to obtain customer-signed documents on the receipt of goods.
• Problems with the resolution of payment cards on the Internet. For my card issued at PUMB, this is solved by calling the support service;
• The complexity of the payment mechanism (checkout) - for the same PrivatBank, you must indicate your mobile phone, receive a confirmation code on it and then enter it [code] on the site. Probably, it is not necessary to say that SMS do not always reach abroad, and there are problems in Ukraine.

Prepay by bank transfer.

It is carried out by the client’s arrival at the bank and the transfer of money under a payment order or account. It's very simple, but there is one thing. From the client charge a fee. The minimum commission is from 5 hryvnia to 25 hryvnia.

pros

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

Minuses

• The main disadvantage is the presence of a commission for the client.

Cash payment

Everything is done simply if the client lives in the same city where the online store is located. First, he can pay by coming to the office and thus save on delivery. Secondly, you can hire your own couriers who will take the 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 we failed to implement this opportunity. Although, as our experience shows, this opportunity is in demand among consumers.

pros

• Immediately get the money
• When visiting the office, the client may buy something else.

Minuses

• Difficulties in accounting and cash

Webmoney

There are many 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 underdeveloped in Ukraine. Although it is possible that people actively using WebMoney are simply not our target audience. There is only one minus in this payment method, but global - a large percentage of money withdrawal from the system is about 5%. You also have to pay money to deposit money into the system.

pros

• Prepayment
• Money does not glow in the current account

Minuses

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

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

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

The share of deliveries by cash on delivery in our country reaches 79-80% of all deliveries.

This system has global cons. All of them occur, in my opinion, due to the lack of any competitors at UkrPoshta. In view of this, the service to this moment is partly soviet. Here is a brief list of what you have to stumble with:

• Problems with the filling of forms on the parcel. We learned how to fill in forms only 1-2 months after the start of work, because there are a number of subtleties that are not described anywhere. Depending on the operator accepting the order - he can pay attention to this or that error. We have come to the point that one operator says one thing, the other is diametrically opposite.
• Another big problem is the queue. On the eve of the new year in the central post office in the queue, you can wait 2-3 hours.
• Money comes to the account within 10 days after payment. What this money does 10 days in the UkrPoshta 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 customer for almost a month.
• Lack of tracking. That is, there is tracking, but it does not work as it should. For example, in tracking, parcels that have long been registered and paid by the client hang up as delivery packages.
• Not always correct delivery. So, I know about the cases when the package in Kerch went to Dnepropetrovsk and then returned a month later. And these are only those cases where I definitely saw the stamp of another city.
• Returns. There is a certain (5-10%) percentage of returns of parcels. This is due to incorrect delivery, non-delivery notification of the parcel to the client, or the fault of the client. For example, he received a parcel, but he was not given a salary (or he spent money on something extra) and the parcel is returned.

pros

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