Payments in Russia 2017: What Consumers Want
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 -