Payment Cards in Russia 2007

Published by: Datamonitor

Published: Mar. 21, 2007 - 103 Pages

Table of Contents

EXECUTIVE SUMMARY

INTRODUCTION

What is this report about?

Scope of the report

Structure of the report

MARKET CONTEXT

Introduction

Country overview

Demographics

Economy

GDP growth in Russia has been steady

Inflation

Distribution of income (Gini coefficient)

Market size

Market penetration

Cards in issue

Number of transactions

Freguency of use

Value of card transactions

Average transaction value

Card acceptance

POS statistics

ATM statistics

Market structure

Historical background

The beginning of the 1990s brought the official collapse of the Soviet Union

In 1995, the Russian banking system experienced its first crisis

A number of factors contributed to the country's financial collapse in 1998

The financial meltdown of 1998 had dramatic consequences for the domestic banking system

The steps taken by the central bank in the aftermath of the crisis were largely ineffective

The country's political landscape was reconstructed by the 2000 elections

But the mini-crisis of 2004 underlined the continuing shortcomings in the country's banking sector

The process of privatization in the Russian banking sector

The 'Loans-for-shares' privatization scheme of mid-1990s increased the power of large and well-connected banks

Foreign investors were shunned in the beginning of the 1990s

Sberbank dominates the Russian retail banking sector

Overview of the current banking system

Central Bank - the Central Bank of the Russian Federation (CBR)

The Russian banking sector has been growing strongly as a result of buoyant economy

Commercial banks

The market is dominated by large 'pocket banks' and state-owned institutions

There are a great number of tiny banking institutions

Credit unions

Credit bureaux

Regulatory environment

The current regulations governing banking activities in Russia

Enhanced bankruptcy regulation was passed in 1999

Current supervisory environment

Key issues

EMV migration

COMPETITOR AND PRODUCT OVERVIEW

Introduction

Card scheme market shares

Pay now cards

Cards in issue

Value of transactions

Credit cards

Cards in issue

Value of transactions

Charge and deferred debit cards

Cards in issue

Value of transactions

Card issuer market shares

Pay now cards

Credit cards

Profiles of top domestic credit card issuers

Russian Standard Bank (RSB)

Alfa Bank

Competitor developments

Consolidation in the Russian market

Acquisitions by foreign players has picked up in 2004

Société Générale looks at other Russian banks for further expansion

Vneshtorbank is an example of a domestic bank looking to expand outside of Russia

Product analysis

Credit card design

Charge card design

Loyalty programs

Citibank is involved in loyalty programs

RSB also offers various loyalty programs

Some card issuers offer various incentives to promote their cards

Product innovation

Visa, Bank of Moscow and Rosan Finance introduce a revolutionary card program for payment of social benefits

Payment cards have been employed for payment of public transport in the Russian market

Citibank offers kiosk payments to Russian cardholders

GE Money offers Visa Instant credit card

FORECASTING THE PAYMENT CARD MARKET IN RUSSIA

Introduction

Forecasting the pay now card market

Forecasting the credit card market

Forecasting the charge and deferred debit card market

SWOT Analysis 8

Strengths

Weaknesses

Opportunitites

Threats

APPENDIX

Supplementary data

Market context

Forecasting the payment card market in Russia

Definitions

Affinity Card

Credit Card

Deferred debit/charge card

EMV

ePurse

Interchange

Merchant Service Charge

Pay now cards

POS Terminal

Research methodology

Cards and Payments database

Future readings

Datamonitor's custom research capabilities

Cards & Payments Team contact details

How to contact experts in your industry

List of Tables

Table 1: GDP per capita for selected European countries, 2005

Table 2: Inflation rates in a number of major European markets, 2001 - 2005

Table 3: GINI coefficients in Europe, 2001 - 2003

Table 4: Major foreign players participating in the Russian banking market, 2005

Table 5: Interest rates, credit limits, interest free periods and annual fees on selected credit cards in Russia, 2007

Table 6: Prices and benefits of charge cards in Russia, 2006

Table 7: A selection of credit card reward schemes offered by card issuers in Russia, 2007

Table 8: Datamonitor's forecast for the pay now market, 2006f-2010f

Table 9: Datamonitor's forecast for the credit card market, 2006f - 2010f

Table 10: Datamonitor's forecast for the charge and deferred debit card market, 2006f-2010f

Table 11: Population numbers and demographic splits in Russia and other major European countries, 2005

Table 12: The percentage of people over the age of 20 in the major European countries, 2005

Table 13: GDP at current prices across major European countries, 2005

Table 14: Real GDP growth rates, 2001-2005

Table 15: POS terminals and population per terminal Russia, 2002-2005

Table 16: ATM terminals and population per terminal Russia, 2002-2005

Table 17: Card penetration in Europe, 2005

Table 18: Pay now card forecasts indexed to 2005

Table 19: Charge card forecasts indexed to 2005

Table 20: Charge card forecasts indexed to 2005

Table 21: Current relevant Datamonitor publications

Table 22: Future relevant Datamonitor publications, 2007

List of Figures

Figure 1: Overview of Russia, 2005

Figure 2: Russia has the largest population in Europe, 2005

Figure 3: Russia has the largest GDP in Central and Eastern Europe, 2005

Figure 4: Russia has a larger industrial sector than most European countries, 2006

Figure 5: Russia has seen steady economic growth, 2001 - 2005

Figure 6: Russia has the lowest level of market penetration in Europe, 2005

Figure 7: Pay now cards dominate the payment card market in Russia, 2001 - 2005

Figure 8: Pay now cards account for the majority of transaction volumes in Russia, 2001 - 2005

Figure 9: Frequency of use on pay now cards in low in Russia, 2001 - 2005

Figure 10: The value of card transactions has growth rapidly in Russia over 2001-2005

Figure 11: Credit cards have the highest average transaction value in Russia, 2001 - 2005

Figure 12: POS network in Russia, 2002-2005

Figure 13: ATM network in Russia, 2002 - 2005

Figure 14: Selected case studies of bankruptcy processes of large Russian banks during the aftermath of the 1998 crisis

Figure 15: Supervisory bodies and professional associations in Russia, 2006

Figure 16: Visa is the dominant scheme in terms of pay now numbers, 2001 -2005

Figure 17: Visa is also the dominant scheme in terms of pay now transaction values, 2001-2005

Figure 18: MasterCard has grown its market share drastically in 2005 in terms of credit card numbers, 2001-2005

Figure 19: Visa is dominant in terms of credit card transaction values, 2001 - 2005

Figure 20: MasterCard is dominant in terms of charge and deferred debit cards, 2001-2005

Figure 21: Visa is also dominant in terms of charge and deferred debit card transaction values, 2001-2005

Figure 22: Sberbank is the leading issuer of pay now cards in Russia, 2005

Figure 23: Russian Standard Bank is the top issuer of credit cards in Russia, 2005

Figure 24: A selection of social and transport cards in Russia, 2007

Figure 25: The pay now market is forecast to grow strongly in Russia, 2005 - 2010f

Figure 26: The credit card market is forecast to grow the fastest in Russia between 2006 and 2010

Figure 27: The charge and deferred debit card market is forecast to grow the slowest, 2005 - 2010f

Figure 28: The Russian payment card market, SWOT analysis, 2007

Figure 29: Datamonitor's core consulting capabilities

Abstract

Introduction

Payment Cards in Russia is an invaluable guide to Eastern Europe's quickest growing payment card market. Created using a combination of secondary and primary research, this report provides statistics on market size, market shares and card acceptance. It provides an overview of regulation, competitor activities and product innovation. It concludes with market forecasts and a SWOT analysis.

Scope

The focus of the report is on consumer payment cards, as opposed to commercial products Data and analysis provided on debit cards, credit cards and deferred debit and charge cards. The report parameters extend to issuance only. Merchant acquiring and card processing are not covered. Historic market data is presented from 2001 to 2005, with forecast data presented to 2010. Competitor market shares are presented for 2005.

Highlights

Russia has the largest general purpose card market in Central and Eastern Europe. Over 2001-2005 the number of cards has increased at an average annual rate of 129.4 per cent. Pay now cards are the dominant payment card type and primarily consist of salary payment cards issued as part of salary payment projects. The most significant trend in recent years in the payment card market in Russia has been a rapid growth in revolving credit. In particular, in January 2005 Russian Standard Bank, commenced its MasterCard International project, which saw issuance of 6.5 million revolving credit cards by the end of 2005. The Russian retail banking market is highly fragmented with Sberbank, a Russian state-owned bank and a pay now card issuer, accounting for the lion’s share of the market.

Reasons to Purchase

Learn how the Russian consumer payment card market has developed between 2001 and 2005. Understand recent developments in the market in terms of consolidation, new entrants and product innovations. Find out Datamonitor's opinion on the future growth rate of the Hungarian payment card markets including debit, credit, deferred debit and charge.

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