The History of Qiwi and Its Perspectives After the Revocation of Kiwi Bank License

The regulator noted that the bank was violating banking laws. Over the past year, measures have been taken against it five times, with restrictions on certain operations being introduced twice. In addition, according to the Central Bank, Qiwi Bank allowed for the laundering of proceeds obtained through criminal means and even violated laws on terrorism financing.

Company Qiwi emerged in 2007 as a joint business of entrepreneurs Sergey Solonin, Andrey Romanenko, and Boris Kim. It was the first and most extensive network of payment terminals and kiosks in Russia. Through a personal account, which eventually became the Qiwi wallet, various operations could be carried out: from paying for the internet and telecom services to repaying loans and transferring to bank cards.

Even then, it was widely, if unofficially, known about the not-so-legal opportunities of Qiwi Bank. Why did the withdrawal of the license take so long? Investor and founder of the financial school Finschool Andrey Plotnikov, founder of the financial school Finschool, speculates:

“There are no fools sitting in the Central Bank, they see and know everything perfectly well. I think they saw and understood what was going on in the Kiwi Bank. It’s just that now, apparently realizing that big digitalization will come soon, the full-fledged appearance of the crypto ruble and crypto wallets from the Central Bank and the Ministry of Finance, of course, excited the Central Bank that Kiwi Bank would have joined this structure very coolly. That is, it would be easy and simple to cash out a crypto ruble through a Kiwi bank. I don’t really want to spoil the reputation of innovation through such banks, and I don’t need to. Secondly, of course, it was time to close this shop a long time ago.”

Qiwi Bank has been under the regulator’s close scrutiny for the past few years. The Central Bank fined the organization 11 million rubles and imposed several restrictions on operations back in December 2020. The restrictions were later lifted. But in the summer of 2023, new restrictions appeared: at the regulator’s direction, the bank limited the withdrawal of funds from individuals to bank accounts from wallets and the withdrawal of cash. In July-August, there were rumors in the media about the revocation of the license, which Qiwi itself emphatically denied in conversation with TASS. As a result, the bank was unable to conduct the necessary compliance, believes Maxim Osadchiy, head of the analytical department of the Corporate Finance Bank:

“The actual owner of this whole system is Sergey Solonin. But it should be remembered that recently there was a division of Qiwi into two parts: international and Russian. The Russian one went to a group of top managers headed by Andrey Protopopov. The business was powerful, lively, and the financial statements of the same Russian Kiwi bank look good. For 2023, for example, with a capital of 25 billion rubles, we received a financial result of about 10 billion rubles, that is, it turns out that the return on capital is 40%, this is a very good result. And, of course, when servicing such a volume of customers, it is necessary to conduct a compliance policy very correctly, so that, on the one hand, not to be too harsh, so as not to alienate customers, but, on the other hand, it is necessary to show reasonable rigidity, so as not to lose the license, but failed.”

MinCifry can restrict foreign IT companies’ access to benefits

The head company Qiwi completed the division into Russian and international parts at the beginning of 2024. Russian assets went to the current CEO Andrey Protopopov through a company from Hong Kong Fusion Factor Fintech Limited. The rest of the business went to Qiwi plc, which will operate in Kazakhstan, the UAE, and other countries. All this was necessary for the company to maintain its listing on the American NASDAQ stock exchange. A buyback of shares is planned to be carried out by mid-March. It is currently unclear whether the bank’s license revocation will affect these plans. The Qiwi Telegram channel claims that the business group of companies, which is not related to the bank’s activities, is operating as usual.