RUSSIANS GET USED TO CASHLESS PAYMENTS
Russians ceased using bankcards only for cash withdrawal. Popularity of cashless payments with assistance of bankcards is growing in Russia. This is a result of not only advertising campaigns but also growing confidence in the state, say market players.
Statistical data of the companies that issue bankcards show that the number of cashless payments fans is growing. Statistical data show that Russians start using the cards for payments for goods and services more often and willingly. Thus, Visa reported that between the end of March 2005 and the end of March 2006 the quantity of card transactions in the points of sale grew 91% reaching 64.7 million. Figures of the payment system Zolotaya Korona show the same trend. Between January and May 2006, transactions grew 31% from the same period of 2005.
At any rate, quite recently bankcards were used only for getting wages and respectively for cash withdrawal from accounts.
Thus, a year ago the Central Bank reported that in the second quarter of 2005, these operations amounted to 615.904 billion roubles, whereas payments for goods and services amounted only to 38.058 billion roubles. By now turnover of card transactions at the points of sale grew significantly. According to Oliver Hues, representative of Visa in Russia, in points of sale turnover grew 57% a year and exceeded $3.8 billion in absolute terms. Its further growth is predicted now. By the end of the second quarter of 2006, the quantity of places where it is possible to pay with Visa cards grew 31% from the same period of 2005.
Not only Moscow provides for growth of cashless payments. The PR service of Visa International reports, “Now the markets of Moscow and St. Petersburg are sufficiently saturated with bankcards. According to last year’s data, more than 50% of new cards were issued in the regions.” Data of Zolotaya Korona also show that regions are growing more active with regard to cashless payments. In 2005, the biggest quantities of cards of this system were issued in Novosibirsk, Chelyabinsk, Omsk, Khabarovsk and Krasnodar. Novosibirsk was the leader according to turnover. Along with this, the share of cashless operations at the points of sale in the system amounted to 35.4% on average.
Systems of privileges and bonuses for cardholders are among the reasons for growth. Tatiana Potemkina, director of the marketing department of Zolotaya Korona, confirms, “Bonus programs encourage the use of the cards.” According to her, after introduction of a bonus program cashless turnover grew not less than 20% in two or three months. Marketing campaigns play an important role too. Potemkina explains that these are not simply advertising but educational programs. Thus, MasterCard developed an educational campaign for credit cards specifically for Russians taking into account the Russian specific. Andrei Korolev, head of the representative office of MasterCard Europe in Russia, said, “Our business parameters show that we have made a correct decision.”
Market players also say that confidence in the state is another important condition for development of the system of cashless payments.
Legislation has been improved permanently lately. Korolev reports, “Banks and their clients approved the efforts of the Central Bank for increase of efficiency of the system of payments, changing of instructions and provisions regulating requirements to participants of payment systems. Development of telecommunications at the state level made the service affordable for broader groups of society.”
<ref>gazeta.ru, July 17, 2006
