International payment systems expand presence in Russia


MOSCOW. (RIA Novosti political commentator Alexander Yurov.) - The number of Russian banks that are joining foreign payment systems has been growing by about 60% every year. Today 45% of Russia's adult population is covered by bank services, and 80% have plastic cards.

In the past few years the Russian bank sector has been developing rapidly. Good-quality bank services are now accessible not only to people in big cities. Well-known banks are continuing to expand, opening branches all throughout Russia today. The result is that more and more Russians have the opportunity to avail themselves of today's "plastic world."

According to information provided by the Central Bank, as of today, over 43 million different plastic cards have been issued in Russia, most of them Visa cards, as confirmed by Visa International. About 20 million people in Russia use them, said Visa International president and CEO Christopher Rodriguez at a recent celebration, toasting Visa International's fifth anniversary in Russia. Anne Cobb, president of the Visa CEMEA region, said that the number of Visa cards issued in Russia in 2000 was less than one million, and in 2005, the Russian market became the leader in the number of issued cards in the CEMEA region, which includes Central and Eastern Europe, the Middle East and Africa. Only 12 countries issue more Visa cards than Russia does today.

But it is not only the leaders of this payment system that are proud of their success scored in Russia. Not long ago MasterCard reported its achievements in the CIS countries. It showed that annual growth in the issue of plastic cards in this region exceeds 60%. At the same time the popularity of electronic payments among Russians has been noticed abroad. A study published by the MasterCard Company in Europe says that, although Russians on the whole spend less in foreign trips than other people in Europe (in the past year they spent only �59 million in Europe, while Germans spent over �3 billion), the increase in spending by Russians using MasterCards was 38.8%. For comparison, payments with MasterCard in Europe have increased by only 12% on average. At present, payments made with MasterCard in Europe total �13.9 billion.

The growing popularity of plastic banking services among Russians is not surprising. Numerous studies made in various parts of the world show that growth in the amount of electronic payments brings notable economic benefits to various countries. This is mainly due to the fact that large-scale electronic payments are far more effective in terms of spending than cash payment. Analysts from Visa International have estimated that in 2004 total expenses associated with payments made in cash in various countries were 5-7% of their GDP. Meanwhile, electronic payments can save 1% of a country's GDP, which in the case of Russia would have equaled 165 billion rubles in 2004.

Payment systems have achieved notable success in Russia but operate differently here than in most other markets. In Russia processing of electronic payments remains very segmented. Over 100 processing centers are operating here, although all payment systems have centralized services for authorization, clearing and settling accounts. Nonetheless, local structures continue to act in addition to them.

Recently Visa International circulated a document called Prospects for the Development of Electronic Payments in Russia, which says that most card operations in Russia are processed according to the "on-us" pattern (when operations do not go beyond one processing center). These operations are done when the issuer and the acquirer are one and the same bank, or when the transactions of associated members are linked to the processing center of the bank servicing them - the Principal Member. As a result, data on authorization, clearing and accounts do not go through a payment system. Only 17% of operations with Visa cards in Russia are processed by the Visa system.

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