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Eurasian payments: Electronic payments moving fast

New data from Payments Cards & Mobile’s Digital and Card Payments yearbooks reveals strong growth in electronic payments across Russia and the former Commonwealth of Independent States (CIS) – though cash use persists and next-generation payment technologies growth is stymied…

This year’s Eurasian Digital and Card Payment Yearbooks reveals a landscape transforming from cash to electronic payments – though perhaps more slowly than the economies of Central Europe, and without the “leapfrogging” from cash to digital seen in dynamic, outward-facing markets such as Poland and Romania.

Eurasian Payments: Switching from cash to cards – at last

Across the region, card numbers and usage continue to grow several times faster than in the EU’s considerably more mature markets. The number of cards in Eurasia grew 10% in 2020, and by 6.3% across the last five years.

As we reported in PCM’s January/February 2022 issue, most Western European markets are now experiencing stagnant or declining card numbers. Card usage increased by more than 38% last year, with individual markets such as Kazakhstan experiencing usage growth of more than 140%.

“Usage of cards, driven mainly by Russia and Kazakhstan, grew by almost 40% last year.”

Russia and Kazakhstan are overwhelmingly responsible for this usage growth, with the number of transactions per head of population in these countries at or approaching European levels of sophistication – 328 transactions/head in Russia and 160/head in Kazakhstan.

Russia alone accounts for 84.6% of all card use in the region. At the other end of the scale, card use remains almost non-existent in laggard markets such as the Kyrgyz Republic (2.9 transactions/head).

Card usage and payments in EurasiaEurasian Payments: ATM and POS use – sophistication growing

Region-wide, there are a number of signs of growing sophistication in the way consumers use cards.

For instance, ATM usage is down 2.3% year-on-year in a sign that cardholders are becoming more comfortable with paying at POS using card instead of cash.

POS terminals now stand at more than 50% of the density level of the EU, and are growing four times faster (19.3% growth, compared to the EU’s 5%).

“Increasing POS penetration and a slight decline in ATM use shows some sophistication.”

At the end of 2021, there were 17,945 POS terminals per million people across Eurasia, compared with 32,678 terminals per million in the EU 27 and the UK.

The most developed Eurasian markets have now overtaken some Western European markets in terms of ATM density – though ATM usage is now in long-term decline in Western Europe as cash use dwindles.

ATM's and POS terminals in EurasiaEurasian Payments: Russia – national focus, digital lagging.

Russia is by some distance the most sophisticated market in this region. Since 2015, the country has pursued a clear strategy of developing national alternatives to global payments networks via its MIR national payments system, and popular national (and pan-regional) digital players such as

Mastercard records that contactless cards are now used in 53% of all transactions in Russia, compared with around nine in ten transactions in the EU.

According to PCM’s data, cards are used in almost 92 percent of non-cash transactions, compared to just 56% in the EU, demonstrating how far Russia still has to travel in the development of a truly digital economy.

The number of POS terminals has grown at a decent pace in the last five years – around 20% – and use of cards at POS continues to expand.

While the Central Bank of Russia (CBR) published an Open API standard in 2020 designed to foster information exchanges between third parties and encourage Open Banking, there’s scant evidence of much take-up to date.

Despite digital banks such as Revolut, Tinkoff and Bank 131 launching in recent years – and the number of online bank accounts growing 11.2% in the last year – true digital services are proving elusive.

It’s hard to gain an accurate picture, but it seems the widespread use of limited digital services such as online banking has arrived in Russia (around two-thirds of customers now bank online) but more sophisticated digital services such as account-to-account (A2A) payments, QR-codes for payment and request to pay (RTP) services have yet to make their presence felt.

That said, positive steps are occurring: the country created a Unified Biometric Standard in 2018 that uses voice and facial recognition to secure online banking and digital transactions – but again, this system has only been used around 1.5 million times in three years by a population of more than 140 million – hardly a rapid rate of adoption.

Russia’s economy, which contracted by 6% during COVID, has plunged a further 10% since the invasion of Ukraine, making any further progress unlikely in the medium term.

ATM's and POS terminals in RussiaEurasian Payments: Poland and Romania – internationalization helps

For context, it’s instructive to look at two former Communist states blazing a trail towards fully digital finance.

According to our EU Yearbook data, Polish consumers used cash for fewer than half of all payments in 2021. Online payments in Poland increased more than 25% last year (faster than in Eurasia), while cards were used to pay for goods worth PLZ 430 billion (€880 million).

Such an outward-looking and dynamic approach is delivering results. For instance, the country’s largest convenience store operator Zabka Group is leading the race to create a truly frictionless payment experience through “Just Walk Out” technology.

This technology allows recognised consumers to enter a store, pick up the goods they want and leave, and is now live across all 37 stores in Zabka’s network.

As Mehret Habteab, Vice President of Digital Products at Visa Europe, puts it: “From tokenization to risk-based authentication (RBA) and biometrics, Central European merchants are using a number of sophisticated techniques to make transactions safer and optimize their use of transaction data.”

Although less sophisticated than Poland, Romania’s digital commerce services are also growing fast.

While it’s true that 60% of Romanian digital transactions are still settled using cash, companies such as online retailer eMAG are launching features such as instant returns via card rails for disputed transactions, while logistics company Cargus has enabled contactless payments on delivery so that cards can be used instead of cash for the first time.

Eurasian Payments: Kazakhstan – digital getting closer

If Russia’s market shows the disadvantages of a national focus as opposed to an international approach, then Kazakhstan in some ways represents a middle way between Russia’s isolationist exceptionalism and the dynamism of Poland and Romania.

A market in very rapid growth, its GDP boosted by its oil and mineral wealth alongside a growing services sector, Kazakhstan has seen internet banking double between 2019 and 2020.

In terms of contactless transactions during COVID, Visa ranked Kazakhstan its number three market outside the US for NFC-enabled transaction growth.

The country’s digital commerce sector is growing just above the global average, as well, with e-commerce up by 17% between 2019 and 2020.

“Internet banking has doubled, POS transactions are up and cash withdrawals down, showing Kazakhstan’s relative sophistication.”

The same rising sophistication can be seen in the way Kazakhs use cards, with the number of POS terminals up 24.3% to 211,764, of which around one-third are mobile POS (MPOS) terminals.

In contrast to most other Eurasian states, the vast majority (almost 91%) of transactions in Kazakhstan are at point of sale, rather than ATM withdrawals.

ATM transactions declined more than 20% last year – ten times faster than the Eurasian average.

As a result of this rapid growth and sophistication, true digital payments solutions such as QR-code payments, digital wallets and others are now emerging through international players like Google Pay, PayPal, Samsung and Apple Pay.

Eurasian Payments: Ukraine – before the storm

Editor’s note: data in the 2021 Yearbooks was compiled prior to Russia’s invasion of Ukraine.

Prior to the Russian invasion of February 2021, Ukraine demonstrated something of a middle ground between Kazakhstan’s dynamism and Russian isolation.

On the one hand, there’s still a high proportion of cash withdrawals when compared to POS transactions using cards; on the other, the number of ATMs has begun to decline in Ukraine, while the number of POS transactions has continued to grow by almost a third each year over the last five years.

Ukrainian payments market statistics

Eurasian Payments: Will digital sophistication survive?

Across the board, there’s evidence of respectable growth and development across Eurasia this year.

However, if Russia, Ukraine and Kazakhstan represent the most sophisticated markets in the region, then there are some laggards such as the Kyrgyz Republic and others: quite what happens to all of these markets given war, hyperinflation, low economic growth and other headwinds is anyone’s guess.

To access information from PCM’s Eurasian Digital and Card Payment Yearbooks, visit:


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