The TRANSENIX solution makes it possible to use smartphones and tablets as payment terminals. Customers can make contactless payments using their physical cards, mobile wallets, and other payment devices.

How it works

• The merchant indicates the amount of the transaction in the application
• The client brings their card or gadget for payment to the merchant’s smartphone
• The transaction is processed by the acquiring bank 
• The bank reports the result displayed in the app (successful)
• At the request of the client, the merchant sends an electronic receipt to mail, messenger, or generates a QR-link

N1 says that the TRANSENIX project team has completed Visa and Mastercard security certification of its solution. This is an essential achievement for the Ukrainian fintech industry because this is the first and only Ukrainian team with such a certified solution, while there are only five such projects in Europe.

“We have received congratulations from Visa and Mastercard regarding the license, and we plan to enter the market quickly with the support of the N1 team,” says CEO Andrey Aushev.

Unlike similar solutions in the Western market, TRANSENIX allows for the one-click creation of terminals, which provides for easy scaling. Another significant advantage is user-friendly analytics, which allows for efficient management of sales managers. The clients will also be able to use a chat bot for quick responses to the most frequently asked questions and transaction history.

“I’m proud of the project team that managed to complete the product certification during the war. It’s a tremendous effort. Moreover, I believe in the project’s potential because similar technologies are now being integrated by giants such as Apple, Google, Amazon, and Revolut. If the team succeeds in the local market, we will help the startup to enter Western markets. Some of our Western partners are already showing interest in this solution,” says Nykyta Izmaylov, N1 Investment company CEO.

Fintech businesses leave the Russian market

During more than 100 days of a full-scale Russian military aggression toward Ukraine, Russian troops invaded over 3,600 Ukrainian cities and towns, firing more than 2,400 missiles into Ukraine, hitting and destroying residential areas, hospitals, daycares, schools, churches, maternity homes, killing tens of thousands of Ukrainian civilians, including 263 children.

The unprovoked Russian war puts at stake not only Ukraine’s safety and very existence but also the lives of millions of people worldwide that rely on Ukrainian grain to fight off famine. Ukraine’s ports are blocked by the Russians. So the Russian government is effectively blackmailing the rest of the world by demanding the lifting of the sanctions in exchange for allowing the transport of Ukrainian grain.

All this makes many international businesses wonder whether profits from the Russian market are indeed worth risking their reputation and financial stability. Many fintech companies are among them. 

Who left and who stayed

Since the beginning of the war, many global fintech services have left the Russian market. There are several reasons for that. First and foremost, there is the simple fact that the Russian market and its assets have become toxic and risk-bearing for any transparent international business. Some of the global companies that try to leave the Russian market are literally afraid to get their staff members imprisoned by the Russian government or worse.

Many fintech companies are genuinely outraged by Putin’s regime and the atrocities of the Russian army, as well as lies and threats to other nations voiced by Russian diplomats. So they leave the Russian market, often — for good. And there is always the risk of more financial sanctions imposed on the Russian market, effectively cutting it off from the rest of the world.

Among those who left, there are many renowned banks — Deutsche Bank, EBRD, BNP Paribas, financial and payment systems: American Express, Visa, Mastercard, Binance, Bloomberg, Paysend, Payoneer, Google and Apple Pay, and many others.

But some companies rush to fill the Russian market in their stead. Cheaters, banks, and payment systems from Russia, Russia-affiliated or residing in Russia-friendly states businesses, keep inventing ways for Russian users to avoid restrictions or openly violate the sanctions.

For example, one of the most popular loopholes is allowing Russian users to use international bank cards abroad. Kazakh, Belarussian, and Uzbek banks and services such as KazReg, Kaspi, Alfa-Bank Belarus, and Kapitalbank keep issuing bank cards to Russian users that can be used for payments abroad, thus violating Visa and MasterCard restrictions. These loopholes are so popular that Russian users have already coined a name for them — card tourism.

What can be done

The AIN.UA and AIN.Capital team has gathered information on such loopholes with the help of dozens of financial experts and hundreds of concerned people from Ukraine and many other countries.

We are now publishing this list in the open access. So that any regulatory body, NGO, or media would be able to use this information to investigate the ways by which Russian and Russia-affiliated companies are surpassing the financial sanctions and restrictions, enabling Russia to continue its war efforts. 

These limitations are put on the Russian market for a reason — to stop Russia’s full-scale war against Ukraine and its people. Money that keeps flowing into the Russian economy is the very same money that keeps sponsoring the murder of Ukrainian nationals and the ruination of Ukrainian cities. So it is crucially important to prevent Russian agents from being able to use workarounds and thus ignore the financial sanctions and restrictions.

The AIN.UA and AIN.Capital team submitted this information to the top-level management of Visa and MasterCard payment systems. At first, Visa responded to our concerns and this, in particular, led to the shutdown of the Bankoff service. But for several weeks now we’ve heard no further response on the matter.

• On 10th of March 2022 Paysend officially stated that it is suspending all the transfers in Russia because of the war: …due to the current circumstances, we have taken the decision to suspend all transfers to Russia with immediate effect.
• Paysend was one of few companies that mentioned the Russian invasion of Ukraine as a reason for its decision to withdraw from the Russian market (not Ukrainian conflict, humanitarian efforts, etc).
• However, recent Russian media reports show that the system is still operating in Russia. A source in the financial market told Kommersant that Paysend is actively developing Russia-China money transfers and is benefiting from less competition in the market. 
• The Russian version of the corporate website at the moment is advertising money transfers to Russia with a small fee: 

• Paysend has been working in Russia via the Russian “Platezhy i rasschety” company that has a valid license from the Russian Central Bank.
• Paysend was founded by a Russian entrepreneur and founder of the money transfer system, Abduljelil Abdulkerimov. It is licensed to work as a money transfer system in the US (NMLS ID: 2048617). The company promotes itself as an international business headquartered in London.

• Founded in 2020 by Laimonas Noreika, Andrius Liukaitis, Darius Verseckas, and Rytis Darginavičius from Lithuania, HeavyFinance is a marketplace that connects a global investor community with European farmers.

“HeavyFinance is well placed to step in and solve an enormous pain point for farmers. The company’s robust platform, deep sector and market knowledge, and exceptional customer service form a strong basis for building a trusted household name in the farming community,” Wojciech Drewczynski from Black Pearl VC comments.

• The platform has already lent more than $14 million to the agricultural sector. Sixty-five percent of this capital has been provided to Bulgarian, Latvian, Lithuanian, and Portuguese farmers engaged in sustainability-focused projects.
• The fresh $1 million investment will be used to provide farmers with short-to-medium term loans ranging between €6,000 – €300,000. They will be able to use funds for buying farming equipment, lands.
• HeavyFinance is focusing on helping farms become more sustainable. Farms that use less-polluting equipment, soil carbon sequestration, or no-till farming receive more favorable loan conditions.
• Leading investor Black Pearls VC is an early-stage venture capital firm focused on supporting the leading tech companies from Northern and Central Europe. It invests from pre-seed to Series A with a typical ticket size ranging from €100,000 to €1 million.
• The fresh funds will also help HeavyFinance to expand its team in order to scale in existing markets.

• payment organization of an international payment system;
• its representative office in Ukraine;
• an authorized foreign institution;
• settlement bank of a foreign international payment system in Ukraine.

Second, in order to register the international payment system the following documents must be submitted to the National Bank of Ukraine:

• application for approval of terms and procedure of operation in Ukraine;
• questionnaire;
• copy of registration documents of a payment system operator;
• brief information note or copies of internal documents covering the operating procedures of the international payment system

The regulator considers the documents within 60 business days after the complete set of documents have been submitted that meets all established requirements.

In this document, the ministry proposes to establish a mandatory schedule for the implementation of accepting non-cash payments, and to tie its stages to the type of companies’ activity:

• Until July 1, 2019, the companies that sell equipment that is subject to warranty repairs, excisable goods, jewelry, pharmaceuticals, as well as enterprises that provide housing and utility services, medical and dental, travel agencies, restaurants, and hotels are required to start accepting non-cash payments.
• Until January 1, 2020 – organizations from the cultural sector, health protection, insurance, reinsurance and private pension provision, companies selling cars, motorcycles and spare parts for them, their repair, rental vehicles, postal and courier activities, all types of passenger and cargo transportation, fitness centers.
• Until July 1, 2020, non-cash payments must be accepted by anyone who sells goods and services that cost more than 50 non-taxable minimums (UAH 850).

At the same time, the Ministry of Economic Development indicated in the new document that non-cash payments can be received through POS-terminals, as well as “electronic payment services”, which is “online payment services, mobile applications, Internet banking and transfer systems to the current account of a business entity money around the clock.” The document also indicates that the sale price of goods or services for cash or non-cash funds should not be different. Until July 1, 2020, non-cash payments must be accepted by everyone who sells goods and services worth over 50 non-taxable minimums (UAH 850).