Shaikhet Igor: what is collection and its role in the modern world of financial transactions

For businesses engaged in business and dealing with trade proceeds, cash collection services have become commonplace.

Especially for those who prefer that the “valuable cargo” is reliably and with guaranteed safety delivered to the right place, and the cash is immediately transferred to a current account opened in a bank. If we conduct associations in this direction, many still have the impression that only in Ukraine banks provide such services. But this opinion is wrong. For 8 years now, since December 2015, the National Bank of Ukraine (NBU) has allowed non-banking institutions to deliver money, following the practice of Western countries. World experience shows that in most countries of the world, central banks and banks do not collect funds and process money, but outsource these services. The first private company in Ukraine to take such responsibility is CIT-SECURITY. Its owner, Shaikhet Igor Olegovich, said that for 7 years the company, in close cooperation with the regulator represented by the NBU, has been developing and improving business processes, as well as regulations to ensure the transfer of funds within the country. The main task is to provide the client with maximum convenience, efficiency and safety of collection services.

Igor Shaikhet: how is the activity of a private collection company guaranteed in Ukraine and who can use its services?

What is a collection? This is, first of all, the safe transportation of cash (Cash-in-Transit) and other valuables, accompanied by security.

In contrast to international practice, the experience of private collection in the Ukrainian market of such services is not yet very popular. The number of organizations working in this direction is few. They all work based on the Resolution of the Board of the NBU on the approval of Regulations on the procedure for issuing licenses to legal entities to provide collection services to banks dated December 24, 2015 It is the presence of a special license issued by the NBU that guarantees the operation of Cash-in-Transit companies, also known as CIT companies. This allows them to provide collection services, and from 2019, also engage in cash processing and storage operations.

The private collection company “CIT SECURITY” was the first to receive official permission, and therefore the opportunity to provide such services, says Igor Olegovich Shaikhet:

– Our company has been on the Ukrainian collection services market since 2016. Its activities are regulated by License No. 1 for the provision of collection services to banks. In addition, in 2019, we received approval from the NBU to carry out cash processing and storage operations. Another important document in authorizing our practice is the License of the Ministry of Internal Affairs for conducting security activities. That is, collection services are a legitimate core activity of the company. Our main competitors are banks, which, in accordance with global trends, increasingly prefer to outsource this service, choosing the most economical option for themselves. For example, banks such as Ukreximbank, Ukrgasbank, Credit Agricole and others have reduced their collection divisions and are using the services of outsourcers. This allowed them to abandon non-core activities and focus their attention on core banking products..

As part of their activities, private collection companies of Ukraine, among them CIT-SECURITY, as well as banking institutions, are often guided by the following regulatory documents:

● NBU Board Decision No. 28 dated March 17, 2020 on the approval of Regulations on the interaction of legal entities that carry out operations for processing and storing cash with other legal entities.
● NBU Board Decision No. 29 dated March 31, 2017 on the approval of the Regulations for organizing the collection of funds and transportation of valuable currencies by banks in Ukraine.
● NBU Board Decision No. 103 dated September 25, 2018 on the approval of Regulations for organizing cash operations of banks and conducting payment transactions by payment service providers in Ukraine.
● Decision of the Cabinet of Ministers of Ukraine No. 55 of January 30, 2013 on the approval of the Conditions for the protection of dangerous and valuable goods during their transportation by road and the list of such goods.

– This list of regulatory documents determines the organization of the collection process and the procedure for recounting money for banks and collection companies operating in Ukraine. In addition to NBU regulations, security companies are guided by the decision of the Cabinet of Ministers regarding the organization of transportation of valuable and dangerous goods by armored vehicles. At the same time, we follow all legal requirements,” emphasized Igor Shaikhet.

Private collection companies typically provide their services to a wide variety of organizations and businesses, including banks, retail stores, pharmacies, gas stations and other retail outlets. Their clients can be both legal entities that need to perform safe transportation, including transferring cash to bank accounts, and individuals that need to safely deliver valuables for buying/selling real estate, moving them from one bank to another.

Shaikhet Igor: safety and efficiency – advantages of cash collection for different categories of clients

Today, the collection is actively used in various fields. Its services are used by those in need to ensure safe, reliable transportation of money and valuables. According to Shaikhet Igor Olegovich, his company provides related services to banks, legal entities and individuals. Depending on the client, their list is slightly different.

– Our company provides two collection options: 1) we can be direct carriers and 2) additionally, through a partner bank, ensure the transfer of collected funds from a separate own account to the current account of client. The first option of services is used for banks and individuals. The second is for legal entities. We also work in the interbank cash market in banking institutions, but exclusively in national currencysaid Igor Shaikhet.

What is a collection of legal entities?

● collection of trade enterprises of all forms of ownership;
● individual collection route for large retail chains;
● collection of supermarkets;
● collection of shopping centers;
● collection of self-service terminals;
● online collection using electronic deposit safes for shopping centers;
● bank collection.

– The provision of outsourcing services to banks by IT companies is a practice that is used not only in Europe, but throughout the world. We are actively implementing it in Ukraine, – explained Shaikhet Igor. – This allows banks to eliminate tasks that are not related to their core activities, as we have already discussed.

What is included in collection services for banks?

● collection of bank clients;
● collection of bank branches;
● transportation between banks;
● interregional transportation;
● collection of ATMs, PTKS.

Individuals may also use collection services

In terms of the collection of individuals, the story is quite different.

– If a person contacts our company as a private individual, then we can provide him a service in the form of escorting important cargo. As I have already mentioned, we have the appropriate License from the Ministry of the Interior, which is the basis on which the company can operate in this case. What situations could this be? For example, a notarized transaction for the sale and purchase of an apartment or other real estate, as a result of which the seller received a large sum of money. Our specialists can accompany him to his destination – home or a bank branch. I would like to emphasize that we cannot credit money to the accounts of private individuals. Our company’s ability is only to provide transportation support, – Igor Shaikhet is getting attention.

Risk reduction and confidentiality are the main advantages of the collection services provided by the private company CIT SECURITY. Its owner, Shaikhet Igor Olegovich, said that such services are an important part of the retailers’ business. From the moment money or other valuables are transferred to the collection service, it takes full responsibility for their safety, integrity and confidentiality, which are very important in the modern financial world.