[Dave Birch] Russia is looking like a pretty interesting market for e-payments. The management consultants keep telling us to focus on the BRIC (Brazil, Russia, India and China) for our next growth markets, but it’s important to understand that their mass, retail, e-payment markets are just not going to be like ours, partly because of industry structures, partly because of government direction and partly because of the technology starting point.

Russian central authorities are reportedly considering plans to set up an electronic payments network… The main objective of the prospective electronic payment system would be to challenge the dominance of established brands such as MasterCard and Visa, which currently hold around 85 percent of the Russian cards market. The plans for a Russian-operated electronic payment network come after in June 2008, Russia’s two largest banks – Sberbank and VTB Group – have teamed up to create the United Russian Payment System (URPS).

[From The Paypers. Insights in payments.]

What might the Russian “third scheme” look like, compared to a European “third scheme” (eg, PayFair)? Well, one reasonable prediction might be that the lack of infrastructure in Russia (Russia is a very big place) means that their third scheme might well jump ahead of the European third scheme in terms of its technology platform. Indeed, there are already strong indications that mobile and contactless technologies will be moving ahead quite quickly in that environment.

The head of Russia’s largest bank briefed the country’s President Dmitry Medvedev on the concept of mobile contactless payments last week — and explained that he is looking to launch a non-contact mobile payments system by 2011/12.

[From Russia looks to introduce mobile contactless in two to three years • Near Field Communications World]

A national contactless purse (perhaps a bit like NETS in Singapore or Touch n’Go in Malaysia) in a country the size of Russia would be a really interesting development. Singapore has shown that some judicious government steering can help to migrate to a contactless environment that is convenient for consumers who will…

…now have two payment cards to choose from to use on buses and trains, to pay for road tolls and carparks, and to make purchases from stores, eateries and entertainment outlets. On Friday, Nets (the Network For Electronic Transfers) launched its long-awaited multi-purpose contactless card… EZ-Link launched a similar contactless multi-purpose card in January.

[From Nets, more uses than one]

Transit is the vanguard, as always, but the point here is that competition to provide interoperable e-purses is at least a good step forwards.

I’m looking forward to learning more about the Russian payments world in Moscow in a couple of weeks time. I’ll be talking about the role of new technology, and how mobile phones are having an impact on digital money in different developed and developing markets, at the E-Money in Russia and CIS conference in Moscow on 12th-13th November 2009. One area that I am keen to explore is kiosks. I’m told that the use of kiosks in metropolitan areas in Russia is quite unlike any other market.

The first machine appeared in a Moscow shop back in 2002. Today around Moscow, there are somewhere between 150,000 and 300,000 of these “cash-in” terminals in operation. While not having a bank account in the United States can be a costly problem for everyone with monthly bills, that is definitely NOT the case in Russia.

[From Non Bank Payments: America vs. Russia (part 2) | NowPublic News Coverage]

With innovation at both “ends” of the payment marketplace — cash at one end and super-advanced mobile/NFC at the other end — the Russia e-payments world is going to be very different from the European e-payments world.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

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