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Online payments in Russia - change your mindset

For one of my customers I had a look at the Russian payments market and in particular the online market.
How different can a market be and how mis-leaded can you be with your own world of thinking!
In Russia there about 130 mln credit cards issued, so easy choice for online merchants would be the conclusion if you want to sell goods online....?
Wrong, unfortunately not because practically none of these credit cards work online. They are either only issued for collecting salary's or dont get accepted online at all because of missing CVC codes.
Smart companies like Yandex, Moneta and QIWI have jumped into this market by providing e-wallets that can used for all kind of payments, in most cases not very high e-commerce goods but just used for paying electricity bills and to top-up mobile phone balances.

Whats the main asset for a Payment Service Provider?
Would it be multiple payment methods, multiple acquirers, fraud handling?
Wrong again. Main asset for a Russian PSP is the ability to collect cash.
The successful Russian PSP's are very good at converting cash to digital money. Everywhere in the streets you see terminals that are not used as ATM's to get cash, but they are used to collect cash and put that on an e-money account.

Overall very different dynamics compared to what we are used to in Europe, or at least in The Netherlands where I live.
On the other hand these dynamics provide many opportunities for European companies to address the Russian consumer base that is ready to buy online goods in Europe or the US.

Do you consider to enter the Russian market, or just want more information.
Feel free to call me.

Tonnis de Boer


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