Beeline Kazakhstan to seek payment organisation status

Beeline Kazakhstan intends to apply for first-category payment organisation status, its parent VEON said on 15 September, after the operator and VEON Digital Financial Group signed a five-year memorandum of cooperation with the National Bank of Kazakhstan.

The application is "subject to the applicable regulatory framework and all required approvals", the VEON release says.

The memorandum on digital payment services was signed in Almaty at the Central Asia Fintech Summit, hosted by the National Bank, the National Payment Corporation and the Kazakhstan Fintech Network, the release says. It sets out an initial five-year framework to explore how VEON's digital services could connect with Kazakhstan's national payment and digital financial infrastructure.

Areas of potential cooperation include payment and money transfer processing and settlement between financial market participants, using selected services and infrastructure of the National Payment Corporation, VEON said. The release is explicit about its limits: the memorandum "does not itself authorize the launch of new financial services", and any resulting project will proceed only after regulatory, legal and technical review and all required approvals.

The stated aim is to make payments and money transfers more convenient and accessible within the digital services customers already use, the release says. It does not say when an application for payment organisation status would be filed, which services the status would cover, or what capital or systems the operator would need to meet the requirements. VEON labels its statements on its digital finance ambitions in Kazakhstan as forward-looking.

Ahmet Kayhan, VEON's chief payments and digital assets officer, said in the release that the memorandum "provides a framework to explore how we can combine those capabilities with Kazakhstan's national payments infrastructure". Jabbor Kayumov, chief executive of Beeline Kazakhstan, said the operator's "customer relationships and experience in digital services give us a strong foundation to make everyday payments more convenient", and that it aims to explore services that fit into customers' daily lives, drawing on the national payments infrastructure and VEON's financial services experience.

The release describes Beeline Kazakhstan as serving 11.7 million mobile customers and around one million fixed internet customers, with 60 internal and external products built over five years, and as majority-owned by VEON. A VEON release of 29 September on the operator's Starlink satellite-to-mobile launch gives the mobile figure as 11.8 million. Neither release gives a reporting date for its number.

The payments push is part of what VEON calls its DO1440 strategy, which aims to expand its role in customers' daily lives through digital services alongside connectivity, with VEON Digital Financial Group intended to bring together and scale its financial services businesses, the release says. Mr Kayhan said VEON's ambition through the unit is "to build on the financial services capabilities across our markets and develop businesses that can serve more customers at greater scale".

The memorandum was one of several VEON moves touching Kazakhstan in the period. On 7 October VEON signed a 10-year agreement for Amdocs to run its core technology operations, drawing on intellectual property of QazCode, Beeline Kazakhstan's exclusive digital partner, a VEON statement said. At group level, VEON announced on 23 September a new programme to buy back 3.9 per cent of its outstanding shares, about USD 200 million at the 22 September price, including proportional purchases from its shareholder LetterOne, another release said.

None of the releases puts a figure on expected payments revenue in Kazakhstan. VEON reports its third-quarter results on 6 November, which may give the first indication of how its Kazakh financial services are performing after the memorandum.