Tashkent, Uzbekistan (UzDaily.uz) — Uzbekistan developed an open banking model earlier than many Western markets: a shared API layer was built on top of the national payment systems Uzcard and Humo, allowing applications to access customers’ cards and data. This was the conclusion of a British publication following an interview with Oliver Hughes, head of international business at TBC Group. The Fintech Times reported this.
“We literally have open banking in Uzbekistan,” Hughes said.
According to him, the API layer allows any card to be linked to any application, while companies can access transaction histories and balances and debit funds from customers’ cards.
This infrastructure supports services for peer-to-peer transfers, QR-code payments, mobile top-ups and utility bill payments. At the same time, digital wallets in the form familiar in the West are not widespread in the country.
Hughes attributes the distinctive nature of the market to its history. In the early 2000s, when he worked at Visa, his colleagues responsible for Central Asia found it difficult to enter the Uzbek market. The obstacle was a dominant local payment system integrated with all banks in the country.
In Hughes’s view, the reasons were partly commercial and partly political: the Central Bank and the government sought to protect the national payments environment.
A second system, Humo, emerged over time, and Hughes said authorities then realised that a compatibility layer could be built on top of the existing systems.
As a result, something was created that, in his assessment, was significantly ahead of its time and paved the way for a wide range of digital payment services, followed by mobile banking.
TBC is building its business on this infrastructure. The group entered Uzbekistan about five years ago and, according to Hughes, was the first to offer mobile banking in the country.
It now operates through the TBC UZ banking app and the Payme payment service, one of the three or four largest players in the segment, through which users link cards and make payments. TBC has 23 million registered users and 6 million monthly active users in Uzbekistan.
Hughes believes the ready-made infrastructure gives the market a major advantage: companies do not need to build it from scratch, allowing financial services to be launched more quickly.
In his observation, the shift from cash to cashless payments in Uzbekistan is happening much faster than in other countries where he has worked.
Open banking transaction data, together with the centralised credit bureau, digital government services and telecom operator data, also allow banks to assess borrowers quickly and issue loans online.
The market is now becoming more open. Visa and Mastercard are gradually expanding their presence, while banks are issuing increasing numbers of their cards.
A law allowing tokenisation and, in certain cases, the storage and processing of personal data abroad has been adopted to enable Apple Pay and Google Pay. According to Hughes, these services are likely to launch by the end of the year.
The new rules do not apply to banks: because of banking secrecy requirements, most of their data must be stored in the country.
At the same time, Hughes noted that infrastructure alone is not enough to drive rapid development. The market still needs to further improve legislation, address a shortage of specialists and modernise some technologies that have been in use for around two decades.
“It is a changing payments landscape, but it starts from a very high point,” he stressed.
