Digital Currency Case Study: Webmoney Transfer

One observation about Webmoney Transfer™ is that each year the company continues to successfully emerge as a bigger & better organization than existed in previous years. New products, new markets and new customers all contribute to a spectacular annual growth record. Webmoney Transfer's total turnover in 2009 was $7.52 Billion and this software platform executes more than 25 million transactions daily.

Webmoney Transfer™ has millions of users around the world and offers multi-currency e-wallets, online financial services, P2P payment solutions, internet based trading platforms, merchant services and online billing systems. Webmoney is a powerful hardware and software system which enables Internet users to conduct safe transactions in real time using Webmoney units (WM-units). Special software known as WM Keeper helps manage online Webmoney funds and operate these accounts.

This is an extremely transparent system which provides transaction statistics on the Webmoney Transfer™ web site updated every three hours!

Webmoney was created right after the Russian banking collapse of 1998. At the height of this crisis many large Russian banks including Inkombank, Oneximbank and Tokobank closed. As a result, millions of Russians saw their saving disappear and lost money when the banks shut them out. After this collapse, local citizens and businesses turned to nonbank Internet alternatives.

The Webmoney Transfer™ platform went live in 1998 and since that time it has evolved & grown through many upgrades and dozens of new features. The changes have included security updates, new feature additions which attract new customers and changes that make the system more convenient for existing users. Because the marketplace for electronic payments is an ever-changing landscape, technical growth including constant software upgrades is critical for the success of any digital currency company.

As one example of this continuing technical evolution, Webmoney Transfer™ has a remarkable history of developing improved customer access. From these software additions and accumulated technology upgrades, today's user has a variety of options for accessing a Webmoney purse.

• WM Keeper Classic is a standalone software client installed onto a user's computer and offers access to the most features.
• WM Keeper Light offers web browser based access and does not require any software download or installation on a user's computer.
• WM Keeper Mobile is an application for managing WM-purses on mobile devices (mobile phones, cells, etc.)
• E-Num is an easy to use high security access application providing a simplified log in and even offers biometric fingerprint identification.
• WM Keeper Mini introduced in 2009 is not as powerful as Classic or Light, but very user-friendly & popular.
• Telepat - Permits access to E-purses via voice (Phone) or Mobile device

Unlike the traditional model of an online payments company such as PayPal, which requires all customers to have existing bank relationships, Webmoney Transfer recognizes that not all Internet users have bank accounts. Webmoney Transfer™ has created products targeting customers from all levels of the online commerce world. No bank account or credit card is ever required to open or operate a Webmoney account.

Over the past decade, this growing company has been very successful at identifying markets which are saturated with non-bank Internet customers. Webmoney Transfer has built an empire creating products which cater to this often excluded group of Internet users.

To avoid expensive currency conversions, there are multiple Webmoney e-purses denominated in popular world currencies. Each currency has its own purse. In 1998 the original Webmoney purse was the WMZ U.S. Dollar purse. The system now supports multiple purses, secured by various resources and tangibles.

• WMR - equivalent to RUR( R-Purse),
• WMZ - equivalent to USD (Z-Purse),
• WME - equivalent to EUR (E-Purse),
• WMU - equivalent to UAH (U-Purse),
• WMB - equivalent to Belorussian Roubles (B-Purse),
• WMY - equivalent to Uzbek Sum (Y-Purse)
• WM-C and WM-D - WMZ equivalent for transactions on С- and D-purses (credit purses)
• WMG - equivalent of Gold (G-Purse)

WebMoney Gold. Opened in mid 2007 Webmoney Transfer™ operates the software platform responsible for transacting all digital payments. The various e-purses are formed as completely separate corporate entities from the software transaction platform. Each purse is organized as a stand alone legal entity in its own jurisdiction. Despite the massive number of transactions that take place each day, no funds from any one purse are ever commingled with the financial business of another currency purse. Since each purse is a closed loop system, it is impossible to exchange funds from one currency to another type of currency. The software platform will not perform any exchanges between purses. This is unlike PayPal or traditional bank credit cards which will automatically swap currencies as the payment requires and then charge the customer a non-negotiable extraordinary currency conversion fee.

WM-C is a fascinating Webmoney credit unit of currency. Any user can arrange a line of credit and loan funds to any other user through the WM-C and WM-D purses. This is a very popular and easy to use product which avoids all red tape a consumer might encounter obtaining loans through a conventional bank.

The WMG purse (gold backed) emerged in 2007 and targets a specific consumer demographic that uses the gold purse as an online saving tool and a hedge against inflation.

Webmoney also offers:

• Prepaid digital currency cards
• Integration with walk up cash-in payment terminals for deposits/funding a WM account
• WM Notes, a digital surrogate of coins & banknotes. WM Notes are stored online & can be controlled by users via access codes. Notes are used for immediate transactions in small amounts.
• Webmoney system supports the extension of credit from any user to any other user. (loan or borrow) Members can purchase goods & services or pay others with extended credit. The amount & terms of the extended payment are automatically registered in the system's transactions history. The Webmoney system offers controls for timely repayment of loan amounts.
• Convenient fingerprint account access using the E-num authorization system and a USB equipped biometric fingerprint reader. E-num is an authorization system ensuring WebMoney services access with a secret key (a unique cypherpad) stored in a user's mobile phone/PDA or a biometric identifier.

Business cooperation with existing financial companies that offer non-bank products has also helped to propel Webmoney's growth. This cooperation includes:

• Funding WME Purse with UKash vouchers in many cities. Vouchers are sold locally for cash
• Integration with Paymer software & hardware system that manages payment obligations in the form of electronic checks payable to the bearer
• International prepaid mobile operators now top-up in 35 countries using Webmoney including mobile operators in South-East Asia, Middle East, Africa, South and Central America
• Integration with DIRECTebanking.com Funding of WM accounts. Method allows customer to complete a direct credit transfer based on the high security standards of online banking & TÜV certified data privacy. Order is instantly confirmed & non refundable (no charge backs) Available in: United Kingdom, Germany, Austria, Switzerland & Belgium
• Direct exchange gateway with Yandex.Money (digital currency)
• Business cooperation with the Dinero MasterCard prepaid card
• Skype payments can be made directly from a WM-purse in many countries including Indonesia, Vietnam and Byelorussia
• Available PaySpark Mastercard, designed for withdrawal of funds via ATM machines (with Mastercard logo) Top up from WME purse
• Available gKard, ATM cards for cash withdrawals on Visa/Plus network machines
• Business cooperation with Ocean Bank, HandyBank, RBK Money

Over the past decade Webmoney Transfer has receive awards and a large amount of recognition for their popular and innovative online payment products.

• WebMoney Transfer winner National Bank Award most popular online Payment System. A leading professional award for banking and payment industry in Russia 2007
• WebMoney Transfer winner of the National E-Finance Innovations Awards 2008.
WebMoney Keeper Mobile application name Product of the Year 2008 as the best e-commerce software application.
• Runet-2009 Award winner in the "Business and Finance" category Partnership and cooperation with other industry businesses has been a strong feature of Webmoney for many years. In late 2009, Webmoney joined the Russian Electronic Money Association (REMA).

The major aim of the Electronic Money Association is to encourage the development of the e-money market to make it a popular financial facility in the interests of consumers, state and industry. The basic ways to achieve this aim is to work on legal aspects of the e-money market regulations, to widen cooperation between market participants and interactions with other business entities and government bodies, to increase market transparency, to work out best practice standards, to popularize e-money-based services and protect the rights of their consumers.

Profiling the features of Webmoney Transfer™ uncovered these facts:

1. Online and offline technology is always being updated and upgraded
2. Additional features and new conveniences catering to customers are continually developed and added
3. New digital currency products targeting identifiable consumer markets are always being developed
4. Webmoney Transfer is constantly seeking expansion into new global marketplaces.

As of October 2010, Webmoney Transfer had more than 12 million account registrations in the system, customers and agents in 8069 cities throughout 70 countries around the world along with 59,000 places where customers could fund a Webmoney purse.