How is Visa, American multinational financial services corporation, doing in Uzbekistan, where officials claim that systemic reforms are taking place in the banking sector? VOA's Navbahor Imamova talks to Visa's Vice President Salvador Perez-Galindo at a recent U.S.-Uzbek business forum in Washington, D.C.
Transcript, October 22, 2019:
Salvador Perez-Galindo, Visa: The last two years have marked a very significant change in how we see the opportunities to leap in digital payments in Uzbekistan. We have seen an opening of the possibilities to have a stronger presence in the country, first thing. With very clear signals from financial authorities that we can expand our business and provide more services, not only for international visitors but also for domestic transactions.
Secondly I mentioned international visitors because that's a big driver for us, and as you probably know, in Uzbekistan tourism is growing very fast. We are very interested in making sure Uzbekistan has the right payment infrastructure to continue attracting tourists and making a bigger impact on local economies by increasing the average spending that can be achieved if more Visa cards are accepted in the country. So those are two main drivers why we are very keen in expanding our presence in Uzbekistan. We have a dedicated person now in Tashkent supporting the business, even though the headquarters for central Asia are in Almaty, we are very keen in expanding our presence in Uzbekistan.
Navbahor Imamova, VOA: You work in Kazakhstan and now you work in Uzbekistan too... What other countries are you in?
Salvador Perez-Galindo, Visa: We have presence in all Central Asia. Yes.
Navbahor Imamova, VOA: So where is Uzbekistan if you were to compare the climate, the use, the business, as far as Visa is concerned?
Salvador Perez-Galindo, Visa: Within Central Asia or in general?
Navbahor Imamova, VOA: Within Central Asia? You know that Kazakhs use more Visa than Uzbeks, for example, right?
Salvador Perez-Galindo, Visa: Yes. We have probably an earlier stage of adoption of digital payments in Kazakhstan. Uzbekistan is still in the process of catching up, leapfrogging, and we believe there are a lot of opportunities to leapfrog and achieve a similar level of adoption as Kazakhstan. So that's why we want to make sure the innovation and the service offerings that we can provide to banks and to new entrants. Because in this event we have been discussing all the reform of the banking industry in Uzbekistan, which is great. We see the need to have a different paradigm just on our side of the business, which is payments. But we believe it's also important to bring new entrants to make a more innovative and dynamic payments industry in Uzbekistan.
Navbahor Imamova, VOA: In business forums like this, when you're engaging the American government, American business sector, obviously, working with them and then you're hearing from Uzbek officials who are saying things like, we are doinge radical reforms, things are changing very rapidly, we're open for business more than ever, this is the best time for you to do business. what kind of issues do you raise? Specifically with the Uzbek government, where you want improvements, where you face challenges?
Salvador Perez-Galindo, Visa: Great question. Two things are very important for us, certainty and transparency of regulations. We see the desire to expand, like I said, expansion of digital payments, less informality, better tax collection for authorities. So in that respect, there is a clear message from the government. However, when you look at the specific regulatory framework to expand the adoption of payments, we have the need to maintain a more proactive dialogue with the key authorities. In our case, the central bank in particular. We have engaged them due to recent regulatory activity. Unfortunately, we see things sometimes moving too fast and without having enough time to have a more constructive dialogue between the regulators and the industry. Not only the banks, but international payment networks like ours.
So the second message in addition to that certainty is the need to have more transparency, a more open dialogue with the private sector in our industry. That's very keen, very important.
Navbahor Imamova, VOA: Communication is key as far as you're concerned?
Salvador Perez-Galindo, Visa: Exactly. Dialogue and communication.
Navbahor Imamova, VOA: You don't want to be surprised. No surprises in this field, are there?
Salvador Perez-Galindo, Visa: No. And that's our main concern that has happened. Sometimes, obviously, there's a very legitimate policy or regulatory concern, but we want to make sure that policymakers in Uzbekistan have all the elements to make the right decisions.
Navbahor Imamova, VOA: There is a huge lack of confidence in the financial system of Uzbekistan and by that I mean... People don't know what are the next steps the government is about to take. The government is very proud of the kind of steps it has taken, especially when it comes to currency digitlization, but people feel like they don't know everything and the government isn't always open in terms of explaining what it is about to do. How confident are you that these reforms, specifically currency or liberalization reforms, will continue because those are really critical for you, right?
Salvador Perez-Galindo, Visa: Indeed it is and obviously we need to improve also financial literacy efforts among the population. Uzbekistan is still primarily a cash-based economy. To really make that transition and digitalize the economy, we really need to provide the right tools and knowledge among the population, not only in terms of dealing with connectivity with a digital world, but also have more confidence, trust and confidence on banks and trust and confidence of digital payments. For us, that's very important because if there's no trust in using non-cash means of payment, we will never see that transition happening. So you're right, this is a public, private effort and we would like to continue investing together with our clients, with the authorities in making sure the Uzbek population is aware of what we can offer to them.