Russia Move from Conventional to Electronic Payment System: Ken Research

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Russia Move from Conventional to Electronic
Payment System Ken Research
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• Ken Research announced latest publication titled
  The Cards and Payments Industry in Russia
  Emerging Trends and Opportunities to 2020 which
  provides detailed analysis of market trends in
  the Russian cards and payments industry. It
  provides values and volumes for a number of key
  performance indicators in the industry, including
  check payments, payment cards, cash transactions,
  direct debits and credit transfers during the
  review period (2011-2015).
• Although Russia is a very lucrative destination
  for investment because of its highly developed
  industries, yet its payment industry is not that
  advanced. Indeed, its domestic payment market
  more closely resembles that of a developing
  economy than a developed economy such as those of
  Western Europe and the United States. Russias
  payment market also differs from the other those
  of the other fast-developing nations referred to
  collectively as the BRIC (Brazil, Russia, India,
  and China). Even though Russia has the required
  infrastructure in place for a prosperous payments
  system, Russian payment market is extremely
  incomprehensible since consumers in Russia appear
  to be extremely suspicious of modern payment
  technologies and hence, preferconventional
  methods of payment which in turn hampers the
  growth of electronic payment system in the
  country.

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However, in the recent years, there has been a
considerable expansion of the domestic payments
industry in Russia, which can be associated to
strong growth in payment card issuing and
spending, banking, and e-commerce activities.
Nonetheless, Russia remains one of the smallest
payment markets respective to the size of the
economy and has tremendous potential waiting to
be tapped.
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From the above data, the Russian payment market
may appear to be stout in the first place,
especially with the number of debit cards
exceeding the total population of the country.
However, under closer scrutiny the wider payment
market is mystifying. Despite a large number of
issued debit cards, formal bank account
penetration is under 50. Furthermore the overall
number of ATMs is minute as compared with the
size of the population implying that the card
holder cannot exceed the permissible credit
limit. In the year ending 2011, there were
approximately 200 million cards in Russiawhich
makes it more than 1 card per Russian. Of these
200million cards, Debit cards were the leaders
followed by prepaid cards and then the Credit
cards. Only 15 million credit cards are in
circulation in Russia, which is less than 2 of
the total number of credit cards in the U.S.
Russias prepaid market is even smaller, although
it has grown significantly in recent years from a
very small base.
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In Russia a major fraction of the transactions
are still processed through traditional payment
methods. In 2011, the leading payment instrument
used in reported transactions remained cash- 31
of total settlement, but this is now declining.
Paper-based payment methods are rapidly being
replaced by electronic methods in Russia which
now represent more than 84 by volume and 92 by
value of all domestic payments.The retail credit
card market in Russia is developing at a rapid
pace and banks in Russia are issuing an
increasing number of credit cards. The
infrastructure of the payment card industry is
fairly developed and has advanced further since
2002. The use of both debit and credit cards for
corporate purposes is increasing rapidly as
corporates are now aware of their advantages over
cash. Key Macroeconomic Trends Driving Growth
of Card Industry in Russia An increasing number
of foreign banks are entering the Russian market
but they face the challenge of competing with
other already established foreign banks as well
as domestic banks.
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• One of the major hurdles for foreign banks is
  language because all information relating to
  settlements has to be in Russian or in Russian
  with a translation.
• Any rouble payment between two non-residents, or
  a resident and a non-resident, also needs a
  special currency control code that describes the
  purpose of the transaction in relation to the
  details of payment provided. Liquidity management
  in the current settlement system remains the
  greatest challenge with high-value funds coming
  in late at night with no way to make use of them.
• The development of the RTGS system and the
  development of formats in line with SWIFT
  standards is expected eliminate some of these
  problems and significantly improve the efficiency
  of the Russian payments system.In addition, banks
  have their role to play by looking at how they
  can best meet their clients needs by combining
  the most advanced cash management techniques and
  structures, such as payment factories and file
  transfer functionality, with local knowledge and
  experience of the Russian market.

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To know more on coverage, click on the
link https//www.kenresearch.com/banking-financial
-services-and-insurance/banking/cards-payments-ind
ustry-russia-emerging/25249-93.html Related
Reports Contactless Payment Cards The Future of
Contactless Online Consumer Payments The Future
of Online Payments. Contact Ken Research Ankur
Gupta, Head Marketing Communications query_at_kenre
search.com 91-124-4230204
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