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February 4, 2015
Via EDGAR
Securities ad Exchage Commissio
Divisio of Corporatio Fiace
100 F Street, NE
Washigto, D.C. 20549
U.S.A.
Attetio: William H. Thompso, Accoutig Brach Chief
| RE: | QIWI plc |
Form 20-F for the Fiscal Year Eded December 31, 2013
Filed March 12, 2014
Respose dated November 19, 2014
File No. 1-35893
Dear Mr. Thompso:
O behalf of QIWI plc. (“QIWI” or the “Compay” ad together with its subsidiaries, the “Group”), we are writig to respod to the commets received from the staff of the Divisio of Corporate Fiace (the “Staff”) of the Securities ad Exchage Commissio (the “Commissio”) by letter to Mr. Sergey Soloi, dated Jauary 21, 2015, i respose to the Compay’s letter to the Commissio dated November 19, 2014 (the “November Letter”), i coectio with the Compay’s Aual Report o Form 20-F for the fiscal year eded December 31, 2013 (the “Aual Report”).
Set forth below are the resposes to the Staff’s commets, which for the coveiece of the Staff have bee provided i each case followig the text of the commet i the Staff’s letter.
Securities ad Exchage Commissio
February 4, 2015
Page 2
Item 5. Operatig ad Fiacial Review ad Prospects, page 56
5A. Operatig Results, page 56
Segmets, page 57
| Commet 1: | We reviewed your resposes to commets oe through seve i our letter dated November 6, 2014. Please provide us with the followig additioal iformatio: |
| • | Tell us more about the ature of your various projects, icludig several examples of projects udertake by the Group ad how log a typical project lasts. |
Respose:
We respectfully advise the Staff that, as disclosed i previous filigs, QIWI has adopted a fuctioal maagemet structure where maagemet is focused o cetralized core operatioal tasks such as sales ad marketig, IT, legal, ad fiace. Whe a project is assumed, each fuctioal divisio is resposible for certai compoets of the project. Ay iitiative that requires a certai amout of ivestmets (both i terms of huma resources ad/or capital expeditures) ad aims to support reveue growth, icrease cost efficiecy, mitigate risks or support ay other key aspects of the Group’s activities ad strategy is idetified iterally as a “project”.
Projects vary i terms of resources used ad executio time, ragig from a few days to several moths. Some examples of projects completed ad/or started i 2014 iclude:
| • | Coectio of Visa QIWI Wallet to eBay. Upo completio of this project, Russia users of eBay were able to pay for their eBay purchases usig Visa QIWI Wallet. The project took approximately 12 moths to complete. Persoel from various fuctios worked o this project, icludig, amog other persoel, IT (IT protocol to exchage paymet data with eBay), legal (cotract egotiatio ad documetatio), marketig (desig ad lauch of promotio campaigs o the ew service), ad fiace (developig paymet terms ad tariffs). |
| • | Coectio of QIWI’s paymet system to MTS-Bak. This project took approximately three moths to complete ad the resource requiremets were similar to the eBay project described above. |
| • | Developmet of a ew web iterface. This project took approximately six moths to complete ad was aimed at icreasig Net Promoter Score (“NPS”) ad System Usability Scale (“SUS”), i order to icrease cosumer use of QIWI’s website. Persoel from IT, brad maagemet ad customer maagemet were ivolved i this project. |
| • | Developmet of ew customer idetificatio procedures. This project took approximately two weeks to complete ad its purpose was to esure compliace with the ew Russia “kow-your-customer” legislatio. Persoel from IT, legal ad compliace were ivolved i this project. |
| • | Ehacemet of security of QIWI’s web iterface. QIWI expects to complete this project i approximately six moths. The aim of this project is to improve the security settigs of the Group’s operatios i the evet QIWI’s cosumers use multiple devices ad differet computers with differet IP addresses to access its iterfaces. Persoel primarily from IT, fraud-moitorig ad compliace are ivolved i this project. |
Securities ad Exchage Commissio
February 4, 2015
Page 3
| • | Tell us how work/projects are allocated amogst the seve project coordiators that report to the COO; e.g., by regio, or by syergies of merchats or agets. |
Respose:
We respectfully advise the Staff that, as disclosed i the November Letter, as of Jauary 1, 2015, we have elimiated the positio of Chief Operatig Officer (“COO”) ad trasferred the resposibilities of the COO to the Head of Project Developmet. I respose to the above commet, we will therefore describe project allocatio as it curretly fuctios withi the Group. Whe a decisio is take to take forward a project, the Head of Product Developmet delegates to the Supervisor of Project Maagemet, Mr. Alexader Zhali, who is the direct subordiate of the Head of Product Developmet, the decisio as to which project coordiator is most appropriate to coordiate the project. I certai cases, if the project is very sigificat, the Head of Product Developmet may choose to coordiate the project himself. The Supervisor of Project Maagemet decides who will be appoited as project coordiator primarily based o the project coordiator’s area of resposibility as described further i our respose o page 4 of this letter, but the project’s objectives, as determied by the various fuctio heads idetified i our respose to Commet 1 set forth i the November Letter, ad resources available are also take ito cosideratio. The allocatio amogst the project coordiators is ot liked to expected trasactio volumes or reveues. The Head of Product Developmet is resposible for esurig the Compay’s focus o priority projects, esurig that each project coordiator has access to the Compay’s resources (such as staffig) ad reports to the CEO about the progress of each project.
Please also refer to our respose o the structure of the Product Developmet fuctio below.
| • | Tell us whether fiacial iformatio is available by project or by groupigs of projects maaged by the seve project coordiators. |
Respose:
The parameters QIWI moitors for each specific project differ based o the type of project. For example, i case the project’s aim is to ehace the cosumer’s experiece, the Compay moitors NPS ad SUS for the Group as a whole. If a project is seekig to add specific merchats (such as eBay) to the QIWI etwork, the Compay moitors trasactio volume ad et reveue for such a project. If a project relates to executig a ew retal agreemet with a retail etwork parter, the Compay moitors the umber of kiosks added, trasactio volume ad et reveue from leases to its agets. The Compay does ot accout for ay project o a idividual basis or does it aggregate ay fiacial iformatio from these projects for purposes of preparig its fiacial statemets, determiig its reportable segmets, or for the review ad aalysis of QIWI’s operatios performed by the CODM (as described i our respose letter dated October 16, 2014 (the “October Letter”)).
Securities ad Exchage Commissio
February 4, 2015
Page 4
| • | We uderstad the COO positio is beig replaced by a Head of Product Developmet. Tell us whether the seve project coordiators who curretly report to the COO will report to this ew positio. If ot, tell us who the project coordiators will report to. Also tell us who will report to the Head of Product Developmet ad how else the orgaizatio will chage. |
Respose:
Followig the completio of the maagemet reorgaizatio chages refereced i our respose to Commet 1 set forth i the November Letter, with effect from Jauary 1, 2015, the role of the COO has bee elimiated ad his resposibilities have bee trasferred to the Head of Product Developmet. The Product Developmet fuctio started to operate from Jauary 1, 2015, however its orgaizatio is still beig developed ad the Compay expects to fialize ad formally approve the orgaizatio of the Product Developmet fuctio by April 2015. Uder the curret structure of the Product Developmet fuctio, the followig idividuals report to the Head of Product Developmet:
| • | Supervisor of Project Maagemet, who is curretly Mr. Alexader Zhali. The Supervisor of Project Maagemet supervises the project coordiators listed below ad the overall quality of a project’s maagemet; |
| • | Supervisor of Card Products, who is curretly Mr. Alexader Afaasov. The Supervisor of Card Products oversees operatios with QIWI Visa prepaid cards icludig issuace of cards, card tariffs, distributio of cards, ad other Visa card related activities; |
| • | Supervisor of Self-Service Kiosks Products, who is curretly Mr. Adrey Tarasov. The Supervisor of Self-Service Kiosks Products oversees product developmet iitiatives i respect of SSK iterfaces; |
| • | Supervisor of Digital Wallet Products, who is curretly Mr. Pavel Fomi. The Supervisor of Digital Wallet Products oversees product developmet iitiatives related to Visa QIWI Wallet iterfaces; |
| • | Chief Desiger, who is curretly Mr. Vladimir Stepaeko. The Chief Desiger oversees developmet of all the user iterfaces of QIWI products; |
| • | Supervisor of New Products, who is curretly Mr. Alexader Gadiyak. The Supervisor of New Products oversees the developmet of ew products; |
| • | Supervisor of Cross-Product Project Maagemet, who is curretly Ms. Ekateria Kirtsova. The Supervisor of Cross-Product Project Maagemet assists i project coordiatio, which requires a substatial degree of cross-product commuicatio; |
| • | Supervisor of Post-Implemetatio Assessmet, who is curretly Ms. Olga Martyova. The Supervisor of Post-Implemetatio Assessmet develops reports assessig whether the project has achieved its iitial goals/targets; |
| • | Supervisor of Iovatio Projects, who is curretly Mr. Grigory Melekhov. The Supervisor of Iovatio Projects oversees projects outside of the core busiess of the Group; |
| • | Supervisor of Call-Ceter, who is curretly Mr. Boris Baklazheko. The Supervisor of Call-Ceter maages QIWI’s call-ceter operatios; ad |
| • | Supervisor of Customer Experiece, who is curretly Mr. Alexader Sobol. The Supervisor of Customer Experiece oversees methods ad techiques used by the Group to commuicate with its customers. |
The project coordiators refereced i our respose to Commet 1 of the November Letter, who were previously reportig to the COO, curretly report as follows:
| • | Mr. Grigory Melekhov, Ms. Ekateria Kirtsova ad Ms. Olga Martyova report to the Head of Product Developmet as described above; |
| • | Ms. Victoria Dubovko reports to the Supervisor of Self-Service Kiosks (SSK) Products (Mr. Adrey Tarasov) withi the Product Developmet fuctio; |
| • | Mr. Kostati Vager reports to the Supervisor of Project Maagemet (Mr. Alexader Zhali) withi the Product Developmet fuctio; |
| • | Mr. Alexader Osetrov has ot yet bee assiged a ew role. |
Securities ad Exchage Commissio
February 4, 2015
Page 5
| • | Help us uderstad the day-to-day activities ivolved i geeratig ad expadig reveues ad i icurrig costs i your busiess. Clarify whether the primary drivers of reveue ad busiess growth are expadig cotracts with merchats ad agets ad idetify who is resposible for these activities. |
Respose:
As described i the Compay’s Aual Report, the Group’s reveue is primarily drive by the umber of customers usig its services through the iterfaces it offers such as mobile, web, self-service kiosks or other which i tur drives total trasactio volume. QIWI’s strategy is primarily focused o supportig the growth of Visa QIWI Wallet, which has exhibited substatial growth i its cosumer base sice its iceptio, growig from 5.9 millio active Visa QIWI Wallet accouts as of December 31, 2009 to 16.5 millio active Visa QIWI Wallet accouts as of September 30, 2014. The Group’s activities to icrease Visa QIWI Wallet adoptio iclude icreasig its merchat base (such as eBay), advertisig ad promotioal campaigs through differet media such as iteret, billboard, SMS, press ad radio, ad QIWI’s distributio etwork (for example offerig discouts or loyalty poits whe usig its services) ad ehacig its products, for example, through the developmet of ew iterfaces ad the itroductio of ew paymet optios.
The idividuals resposible for the day-to-day reveue geeratig activities are the Head of Sales ad Marketig, the Head of Product Developmet, the Head of Aget Network Developmet ad the CFO. As described i our respose to Commet 2 of the November Letter, each of these persoel report directly to the CEO. Resposibility for expadig the cotracts with merchats usually rests with the Head of Sales ad Marketig, though i certai specific cases (if, for example, the ew potetial merchat is large ad strategically importat) it ca rest with other members of seior maagemet, icludig the CEO. Resposibility for expadig the cotracts with agets rests with the Head of Aget Network Developmet.
As described i the Compay’s Aual Report, the majority of the Group’s operatig costs are represeted by trasactio costs ad compesatio to employees ad related taxes. Whe paymets are made through the Group’s etwork, the Group icurs trasactio costs to its agets, which represet the amout of fees the Group passes through to its agets for use of their kiosks ad termials. Compesatio expeses primarily relate to icreased salaries ad they are also affected by icreased headcout.
| • | Help us uderstad the distictio betwee “coordiatig” projects (typically the resposibility of the COO ad his seve project coordiators) ad “maagig” projects (most ofte the resposibility of the Head of Sales ad Marketig) ad how the project coordiator ad project maager iteract o ay give project. |
Respose:
We respectfully advise the Staff that the coordiatig role of the COO, ad sice Jauary 1, 2015, of the Head of Product Developmet, ad of the project coordiators refers to the close moitorig of projects to esure that the project team has sufficiet access to the Compay’s resources for the smooth completio of a project. I additio, the COO, ad sice Jauary 1, 2015, the Head of Product Developmet, performs post-implemetatio assessmet of the project to esure that it fits withi the overall busiess strategy of the Group. The post-implemetatio process ivolves assessig idicators such as trasactio volume, et reveue, umber of kiosks, umber of users ad other operatig metrics, depedig o the project.
Securities ad Exchage Commissio
February 4, 2015
Page 6
The overall project maagemet ad executio, such as settig project targets, timig of the project, ad achievig the targeted performace expected from the project, are the resposibility of the various fuctio heads idetified i our respose to Commet 1 set forth i the November Letter ad, i particular, the Head of Sales ad Marketig who maages the majority of the reveue geeratig activities of the Group.
| • | We uderstad that the Head of Sales ad Marketig oversees the majority of the reveue geeratig activities ad maages a majority of the projects udertake by the Group. Help us uderstad the role of the COO ad the seve project coordiators i cases whe the Head of Sales ad Marketig maages a project. Tell us whether the project coordiators report to the Head of Sales ad Marketig o these projects. |
Respose:
We respectfully refer the Staff to our respose above.
We respectfully iform the Staff that the project coordiators do ot report to the Head of Sales ad Marketig. They report to the Head of Product Developmet, who reports to the CEO.
| • | Provide a list of the ames, titles ad resposibilities of the idividuals who are direct reports to the Head of Sales ad Marketig. |
Respose:
The orgaizatioal chart of the Sales ad Marketig fuctio is still beig developed ad the Compay expects to fialize ad formally approve the Sales ad Marketig fuctio orgaizatio by April 2015. As of the date of this respose letter the followig idividuals report directly to the Head of Sales ad Marketig:
| • | Alexader Gladko, Head of Advertisig. Mr. Gladko is resposible for reveue geeratio through QIWI’s advertisig efforts. |
| • | Nataliya Zhelkova, Head of Sales, Basic Services. Ms. Zhelkova is resposible for icreasig the umber of services provided ad market share. |
| • | Alexey Dityatyev, Head of Sales ad Trade Marketig, E-commerce. Mr. Dityatyev is resposible for defiig market etry strategies ad developig products ad tools to facilitate cooperatio with agets ad merchats, i order to icrease sales ad profitability i the e-commerce, e-cotet ad tourism markets. |
| • | Adrey Bardyshev, Head of Sales, Fiacial services. Mr. Bardyshev is resposible for icreasig the umber of merchats ad services i the fiace services market. |
| • | Georgy Soroki, Head of Sales, Moey Remittace. Mr. Soroki is resposible for icreasig the umber of merchats ad services i the moey remittace market. |
| • | Iria Chirkova, Head of Brad Maagemet. Ms. Chirkova is resposible for plaig, developig, ad directig marketig efforts, supportig the Group`s services ad developmet activities. |
Securities ad Exchage Commissio
February 4, 2015
Page 7
| • | Maria Buzhiskaya, Head of Marketig ad Cosumer Research. Ms. Buzhiskaya is resposible for providig research regardig cosumer prefereces ad market treds. |
| • | Julia Masurova, Head of Public Relatios. Ms. Masurova is resposible for commuicatios with the media, focusig o iformig cliets about ew projects ad services, ad o supportig ad improvig the Group’s reputatio. |
The Head of Sales ad Marketig cotiues to report directly to the CEO.
Supplemetally, the Compay would like to iform the Staff that, as previously reported, begiig o Jauary 1, 2014, the Compay revised its fiacial reportig structure of presetig three segmets (QIWI Wallet, QIWI Distributio ad Corporate ad Other) to oe fiacial reportig segmet. The key reaso for cosolidatig its previous fiacial reportig segmets was because, i the Compay’s view, these segmets o loger reflected how the Group operated sice (as described i the November Letter) QIWI Distributio has effectively become a top-up chael for QIWI Wallet. As previously described i our respose to Commet 1 of the October Letter, the Compay believes that the chage to oe operatig segmet better eables users of its fiacial statemets to evaluate the ature ad fiacial effects of the Compay’s busiess activities ad the ecoomic eviromets i which it operates.
* * * * *
Please sed a copy of ay additioal correspodece to the udersiged at 40 Bak Street, Caary Wharf, Lodo E14 5DS, Uited Kigdom, facsimile +44 207 072 7026. If you would like to discuss ay aspect of the Compay’s respose, please call me o +44 207 519 7026.
| Sicerely, |
| /s/ Praav Trivedi
|
| Praav Trivedi |
| cc: | Securities ad Exchage Commissio |
Yolada Guobadia
Roby Mauel
QIWI plc
Sergey Soloi
Alexader Karavaev
Yakov Barisky
Erst & Youg LLC
Natalia Staryga
QIWI PLC
Severoe Chertaovo Microdistrict, 1A, buildig 1
Moscow, 117648
The Russia Federatio
February 4, 2015
Securities ad Exchage Commissio
Divisio of Corporatio Fiace
100 F Street, NE
Washigto, D.C. 20549
U.S.A.
Attetio: William H. Thompso, Accoutig Brach Chief
| Re: | QIWI plc |
Form 20-F for the Fiscal Year Eded December 31, 2013
Filed March 12, 2014
Respose dated November 19, 2015
File No. 1-35893
Dear Mr. Thompso:
I coectio with the commets of the Staff of the Securities ad Exchage Commissio (the “Commissio”), set forth i the Staff’s letter dated Jauary 21, 2015, i respose to the Compay’s letter to the Commissio dated November 19, 2014, i coectio with the Form 20-F for the fiscal year eded December 31, 2013 (the “Filig”) of QIWI plc (the “Compay”), the Compay hereby ackowledges that:
| • | the Compay is resposible for the adequacy ad accuracy of the disclosure i the Filig; |
| • | Staff commets or chages to disclosure i respose to Staff commets do ot foreclose the Commissio from takig ay actio with respect to the Filig; ad |
| • | the Compay may ot assert Staff commets as a defese i ay proceedig iitiated by the Commissio or ay perso uder the federal securities laws of the Uited States. |
| QIWI plc | ||
| /s/ Alexader Karavaev | ||
| Name: | Alexader Karavaev | |
| Title: | Chief Fiacial Officer |