Russian mobile payment industry is expected to grow at a CAGR of over 110% during 2016-2020

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Mobile payment industry in Russia has recorded strong growth in recent years. The market is still evolving in terms of mobile financial service environment and regulations but there have been developments in infrastructure, mobile commerce and consumer awareness. Mobile payments have gained consumer attention in recent times with 40% internet users participating in it. Half of them perform SMS payments, 55% do so with bank cards and 61% prefer online banking apps. Telecom operators such as VimpelCom, MTS, and Megafon are taking a lead in mobile payments segment in the country, leveraging partnership with banks. Yandex.Money is the most popular e-payment solution provider in the country with 25 million consumer base followed by Webmoney and Visa-Qiwi wallet. Yandex’s B2B platform allows merchants to accept online payments as well. Other than these, PayPal entered into the market towards end of 2013 and it is popular for cross border purchases.

Cash transactions are still predominant in the country and over 80% consumers prefer to pay cash on delivery for their online purchases. However, growth of online travel agencies have spread awareness regarding online payments and reduced concern of consumers about security of transaction and bank credentials. P2P transfers are gaining momentum and posting strong growth in Russia. Small value payments through prepaid mobile accounts are used for average transaction value of USD 38. Mobile payments account for approximately 4.5% of transactions across prominent payment platforms and transaction value is only 0.35% of the entire volume.

Recent developments in the market include

• Visa has teamed up with Qiwi to provide its payWave application to the e-wallet. Through this, NFC based payments from Android platforms will be facilitated with cloud based HCE technology. The wallet can be accessed at more than 1 million QIWI kiosks across the country. Visa is expected to channel its business expansion in Russia through this partnership and Qiwi is likely to experience further increase in transaction volume through this feature addition.
• One of Russia’s largest private banks, MDM Bank has introduced single tap Mastercard contactless mobile payment facility without any additional passwords. Due to this, consumers can now directly pay from Mastercard account without undergoing security checks such as entering PIN or password. The WAY4 HCE technology has been supported by payment software solution provider OpenWay. The facility is available for MDM Bank’s mobile banking app and works in offline mode. With this approach MDM is likely to venture into mobile payment segment increasing in business line and strengthening its foothold in the market.

To know more and gain deeper understanding of mobile payment industry in Russia, click here.