Debit cards dominated the payment card market in terms of transaction volume and value during the review period. Payroll programs are a key way of issuing cards, and have led to the widespread issuance of debit cards. This was further supplemented by the large-scale issuance of domestic payment card Mir. The government mandate that all public sector employees and workers who receive welfare benefits from federal or state funds will migrate to Mir payment cards from July 1, 2018 will further enhance usage of Mir debit cards.
Although cash plays a dominant role, accounting for over 52% of total transaction volume in 2017, the Russian payment card market is gradually shifting towards electronic payments, as it grew substantially in terms of both transaction volume and value during the review period. The uptake of electronic payments can be attributed mainly to government initiatives such as financial inclusion programs, regulations to cap cash payments, and the introduction of the National Payment Card System, which launched the first national payment card, Mir, in December 2015.
Russian consumers are increasingly becoming comfortable with online spending. Although credit and debit cards together account for 29% of the total value of e-commerce spending in Russia, cash or cheque on delivery is the single most popular payment tool. Alternative payment solutions such as Yandex, Money and PayPal are becoming popular within the e-commerce space, mainly because of the security and comfort they offer.
Contactless payments are gradually gaining prominence in Russia. Almost all the major banks issue contactless cards in the country. In May 2017, Sberbank migrated most of its card portfolio to contactless. As a result, it had issued nearly 15 million contactless Visa and Mastercard payment cards by September 2017. VTB24 has partnered with Visa for contactless payments on the metro, while Alfa-Bank collaborated with Russian Railways and Mastercard to launch contactless payment cards.
The report "Payments in Russia 2017: What Consumers Want", examines the consumer payments market in Russia, considering payment cards, online payments, P2P payments, and newer payment technologies such as mobile wallets and contactless. The report also examines the main regulatory players overseeing the market.
In-depth this report provides the following analysis:
- Analyzes consumer attitudes to financial services by lifestage.
- Analyzes the major payment card types in terms of both card holding and usage.
- Identifies the major competitors in card issuing and how their position in the market has changed over the last five years.
- Considers consumer attitudes towards P2P tools, mobile payment tools, and contactless cards, and how companies in Russia are deploying these tools to meet customer needs.
- Explores the online payment market in Russia by merchant type and payment tool, as well as providing a five-year forecast for the development of the market.
- Following the Russian invasion of Crimea on March 18, 2014 the US government imposed sanctions against Russia. Consequently, Visa and Mastercard ceased processing card payments in the country. To counteract this the Russian government created a domestic payment card system, the National Card Payment System, in April 1, 2014 and launched the Mir national payment card in December 2015.
- The new federal law signed by the Russian president in May 2017 mandated that all public sector employees and workers who receive welfare benefits from federal or state funds will migrate to Mir payment cards from July 1, 2018. As of July 1, 2017 all ATMs and POS terminals in Russia should be able to accept Mir payment cards.
- While banks in Russia still focus on traditional bricks-and-mortar branches to deliver services, OTP Bank Russia launched its mobile-only bank, Touch Bank, in August 2015.
- Understand the key facts and figures in the consumer payments market in Russia.
- Learn what trends drive consumer behavior at the macro level and plan your strategy accordingly.
- Find out what products the major competitors are launching in the market.
- Discover consumer sentiments towards various payment tools in the Russian market and use this knowledge to inform product design.
Payments Infrastructure & Regulation