Webmoney’s Inside Man – Q & A with Peter Darakhvelidze

WebMoney is a powerful online payment tool. The proprietary client software enables Internet users to conduct real time secure transactions using multi currency WebMoney units (WM-units). This ‘WM Keeper’ software provides users direct digital money access and allow users to manage their accounts from anywhere in the world.

The Webmoney Transfer system has been widely used since 1998 and provides online payments and shopping for millions of digital money users. In 2006 the Webmoney Transfer system executed over $1.45 Billion dollars in customer transactions. You won’t need a bank account or a credit card to open an account with WebMoney Transfer plus registration is fast & free.

Today I am interviewing Peter Darakhvelidze Director of corporate affairs from WebMoney Transfer.

Q) How long has Webmoney Transfer been in operation on the Internet?

Since November 1998

(Q) What areas of Webmoney online commerce has shown the most growth and popularity in recent years?

Gambling, online games (MMORPG at first), FOREX, internet services (hosting, domains etc.) Also you use WebMoney and pay almost all MNO, ISP, IP telephony providers and even utility bills in countries of ex-USSR.

(Q) How many users does the Webmoney system currently have?

At this moment we have 3.58 million registered users. The active body of our auditorium amounts to 600,000 users.

(Q) Webmoney Transfer offers multiple – currency equivalent user purses including WMZ (US Dollar), WMR (Russian Rouble), WME (Euro), WMY (Uzbek), WMU (Ukrainian Hryvna) and WMB (Belorussian Roubles). Is it possible using the Keeper software for account holders to simply move funds back and forth between these different currency purses?

All mentioned currencies are independent from each other; that is the guarantor behind each currency is a small and separate “central bank”. You can exchange one type of unit to another using a specially designated tool, designed as a bourse / exchange, where the exchange rate is established based on parity call-demand ratios. From one side, the Guarantors are involved in backing-up and trading the currency at the exchange. From another side, the exchange rate between WMZ and WMR at our exchanger is 3% higher than a real, “live” rate. And we are not going interfere into this layout, this is a market prerogative. [the system functions by market demand]

(Q) The independent agents transacting in Webmoney, are they required to keep their fees and exchange rates at a certain level? Can the agents charge what they desire for transactions in Webmoney?

Yes, all agents are absolutely independent businesses and all fees are up to them. We have been in business now for over than 8 years and competition between agents has eliminated from the market those who kept their rates too high.

(Q) What are the 3 most popular methods to ways to add funds to a WM purses?

Historically prepaid cards were the most popular, but now cash-in machines even outpaced the prepaid cards. Of course, bank wires, Western Union-like systems and postal orders are also popular.

(Q) How does Webmoney Transfer make it easy for everyday users to convert cash currency into digital Webmoney?

Our global retail network keeps growing. The idea is that we are a platform and a turn-key technology that is openly offered. A number of independent dealers and entrepreneurs, who build their business on WM and with WM is increasing constantly.

(Q) I’m interested in your prepaid Webmoney cards. Prepaid cards are huge business in places like the United States. When a local card seller is near, this method of funding seems most convenient for all users. Do a lot of people buy & use these cards?

Yes, exactly, we have grown so fast mainly due to the easy availability of the cards all over our territories. By the way, the cards can be used independently, without opening an account with WM – many merchants and services accept WM-cards pin-codes via phone IVR systems, thus people without any access to Internet at all can use WM as a payment means. Every card as well serves as a Paymer.com check , that is it can be split, merged or forwarded to other customers. Here we go – pure electronic money.

(Q) I read from your web site that prepaid Webmoney cards are available from automatic vending machines in Russia and Ukraine? I am very curious where you position a card vending machine. Are they located in shops, banks, subway stations or airports?

There is a boom of such cash-in machines in Russia, one of the reasons is that people are still mostly unbanked. You can find such cash-in in every shop, cinema, even in pedestrian subway. Of course the headliners are mobile network operators, but e-currencies and internet services are also widely presented.

(Q) I have some online friends and associates who may want to become involved distributing WM cards in the US and Europe. Does Webmoney Transfer allow global users to become distributors of WM prepaid cards? What is required?

Nothing. Anybody can issue pin-codes from your Webmoney purse using service www.paymer.com and start selling them. Our commission is 0.3%-1%, depending on volume.

(Q) I see that Webmoney Transfer requires all Exchanger Agencies to be verified merchants and hold WM Personal Passports. Why do you take this additional step and to identify and ‘know’ who is transacting in Webmoney? Why does Webmoney require independent agents to disclose information on themselves?

The logic is very simple – to give the established exchange businesses the possibility to work comfortably and within current legislation [laws & regulations]. Suppose somebody moved dirty funds from WebMoney to another payment system or withdrew them; then, a court or other authority would ask for traces of this operation. If the transaction came through verified exchange agent, then this agent would indicate the receiver’s account in another system, of the person who received the cash, we believe him and don’t treat him as a beneficiary. But if traces breaks into anonymous account, this owner will bear the liability to prove to us and to the court that he is not a true and final beneficiary.

(Q) I hear this statement a lot from new e-gold users when they want to make a retail purchase online, “How do I know an e-gold merchant will deliver the items after I pay them in e-gold?” What is a Webmoney coded transaction and how does that help protect buyers using WM?

WebMoney code-protected transaction are used exactly for such transactions. You transfer funds to the merchant protected by a code. Funds are withdrawn from your account so the merchant sees that you are a fair customer. The merchant can’t do anything with these funds unless you have received the goods/service you paid for and you will reveal the code to him. In case this measure is not enough, seller and buyer can establish mutual WM trust: http://trust.webmoney.ru/ .

Continued in Part II

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