There is m-banking with phones, approaches to banking the poor with point-of-sale terminals, and business models that use phones and cards together. But Russia is pioneering an altogether different approach to opening access to payment services.

More than 120,000 automated payment terminals have been deployed in Russia, mostly in the last two years. Located in public spaces, unmanned terminals like this one below provide 24/7 ability to buy prepaid airtime and other telecom services, pay municipal utilities, rent or taxes, or make a repayment on one of the estimated 20 million consumer loans outstanding.

No bank account is required. You can’t make a deposit or a remittance yet, but the boom in payment terminals should be good news for the 60 million adult Russians who are unbanked but need an affordable, convenient and reliable way to make retail payments.

Terminals started appearing two years ago, and are expanding beyond big cities. With most of Russia’s unbanked living outside of Moscow and other big cities, payment terminals could be a cost-effective way to extend basic access. Terminal operators say they can break even in two years on a $7,500 initial investment.

Russia’s payment terminals look very similar to what’s happening in Brazil, where banks have created over 100,000 correspondents, typically merchants equipped with a point of sale terminal and bar code reader. In Brazil, the business model is also built around bill payments. More than 80% of the 1.4 billion transactions per year are for utility bills, according to the Central Bank of Brazil. One bank, Lemon Bank, is profitable on bill payments. So far, much of the volume at Russia’s 120,000 payment terminals is for airtime purchases and other utilities - up to 90% of all transactions.

But different from Brazil, Russian merchants are shifting to automated terminals rather than devices they have to man. They cite the simplicity of just renting space to the terminal owner rather than dedicating an employee to run a POS, and the desirability of keeping the cash register clear for normal purchases. They’d prefer to push the surge of small value payments to the terminal where they won’t create lines for other clients. According to one estimate, 40% of merchants who had a POS have switched to an automated terminal over the past two years.

Russia’s payment terminal model isn’t perfect. Consumer protection questions abound. A good chunk of payment terminals are operated by unregulated non-banks, and these don’t always provide a customer service number or even a company name to contact, should your money be taken.

Some also suggest the business models aren’t entirely above-board. Regulated operators in the market claim their unregulated competitors aren’t in the payments business for the transaction fee, but rather to accumulate cash to sell at a 6 to 10 percent premium for folks who are engaged in tax avoidance and other illegal activities.

And there are others which qualify as promising ideas to bank Russia’s remote and poor. The Russian Post earns 46% of its revenue from financial services delivered at its 42,000 post offices. Top earners are money transfers, delivery of pensions, and facilitating payments for third parties (consumer finance companies, utilities). Russia’s largest mobile operator, Beeline and Tavritchesky Bank have also experimented with a mobile-based payments service. Branchless banking is relatively new in Russia, but developing fast around a business model built on payments, with many unbanked people needing an affordable, convenient and reliable way to make retail payments.