How Payment Services market is positioned in Russia?
Russia is located in Eastern Europe with an area of around 17,098,242 square km and is home to around 144.5 million populations, as at 31st December 2018. With around 63.2% smartphone penetration rate, the country has come a long way in developing the Payment Services infrastructure and adapting to the simultaneous change in customer payment preferences for non-cash payment services. As per our framework, Russia was observed at a ‘Converging’ stage in terms of its progression towards becoming cashless, ahead of economies such as India, Indonesia and Saudi Arabia while lagging behind United States and Australia. The Y-o-Y nominal GDP growth rate was observed to be 7.3% for the past six years with a simultaneous reduction in the share of Shadow Economy which stood at around RUB 12.7 Trillion as at 31st December 2018.
The number of non-cash transactions were recorded at ~ in 2018, an increase by CAGR of ~ during 2013-2018. The non-cash payments were dominated by Payment Cards owing to its easy availability and high number of users.
While the introduction of domestic payment system, MIR cards, usage of NFC Technology backed contactless payments are expected to reap benefits in terms of covering the unbanked population and increasing the usage of non-cash transactions, the competitive landscape is expected to become fiercer; thereby taking heavy toll on margins for every participant. A change in user’s demand for a ubiquitous payment resource that offers broader reach for payments is gaining traction, enabling incumbent firms to search for alternative strategies to remain profitable in the market. Introduction of white label schemes under different segments and simultaneous partnerships with Big Tech companies are some of the suggested strategies for the players in the payment services market.
Russia ATM Terminals market: Changing industry dynamics
The ATM terminals industry was characterized at a juncture, facing continuous innovation in terms of cash recyclers with white label scheme of operations and declining usage and reducing base of installed terminals. The number of installed ATM Terminals was observed to be ~ as at 31st December, which processed around ~ number of transactions in 2018. The annual volume of transaction per ATM terminal is continuously rising with a subsequent reduction in the average value of a transaction; highlighting the usage of ATM terminals for small value transactions as well.
By Type of Transactions (Financial and Non-Financial): The demand for cash withdrawals transactions have fairly remained around ~ during study period. The increase in the usage of ATM terminals for non-financial transaction including bill payments has been on the rise, with a share of around ~% in 2018. The negligible commission charges for payment through ATM terminals make it a preferred mode for payment by the users.
By Geographical Location:
The installation of ATM terminals is highly dependent on the population density and area of the region. the trade-off between cost of installation and the expected revenue influences the location of installation of the terminal. While Central Federal district leads the segmentation with ~ % share, regions such as Urals and Southern Federal district have less number of ATM terminals per 1,000 populations.
ATM Manufactuers: A concentrated industry space with 4 major players competing on the basis of price, quality, level of innovation, after sales services through tie-up with ATM Management Company and other parameters.
ATM Management Company: A highly fragmented market space with partnerships in different segments being the core business model. The firms majorly compete on prices of FLM and SLM, SLA, partner manufacturer supported, geographical areas supported and others.
Snapshot on Cash Management Companies:
There are majorly 3 players operating in the industry supporting management of cash-in-transit. Such companies have partnered with installing entities and ATM management service providers to get contracts. A slow growth in cash-in-transit management is expected owing to the reducing usage of ATM Terminals for cash withdrawal transactions.
The numbers of ATM terminals located in Russia are expected to reach ~ by 2025E. This would be majorly led by the rising profitability concerns of the installing entities owing to the decrease in the usage of cash by the customer. Introduction of cash recyclers and implementation of White Label Scheme by ATM management companies could change the industry dynamics.
Russia POS Termimals Market: Shaping the Future
The POS Terminals segment forms a major part of the acquiring business for credit organizations. The number of POS terminals as at 31st December 2018, stood at ~ facilitating the processing of around ~ number of transactions. A higher commission charge is detrimental to the increasing installed base of POS terminals by the small turnover merchants, which lends much space for the new entrant to ease the pain-point and gain high market share in less time frame. Although the demand of Mobile POS devices is rising, much innovation in POS Terminals in terms of contactless, supporting e-wallet and contactless payment transactions is expected in the coming years. The introduction of white label scheme with lower commission charges could be the new business model for the players operating in the industry.
Key Segments Covered
Russia Payment Services Market
By Cash and Non-Cash Payments
Russia Terminals Market (Banking ATMs)
By Transaction Type (Financial and Non-Financial)
By Geographical Location (Federal Districts wise)
Russia Terminals Market (POS Terminals)
By End-User (Retail, Delivery, Restaurant, Healthcare and Others)
By Type of Devices (Fixed and Mobile)
By Geographical Location (Federal Districts wise)
Russia Payment Cards Market
By Type of Cards (Debit and Credit Cards)
By Type of Cardholder (Individual and Legal Entities)
By Type of Transactions (Cash Withdrawals, Payment Transactions and Others)
Russia Payment Aggregators Market
By Type of Merchant Services (Payment Aggregator, Payment Gateways and Particular Instruments)
Time Period Captured in the Report:
Historical Period – 2013-2018
Forecast Period – 2018-2025
ATM Terminals Market
POS Terminals Market
Payment Aggregators Market
Payment Cards Market
Key Topics Covered in the Report
Demographic Analysis of Russia
Consumer Profile in Russia
Economic Analysis of Russia
Shadow Economy of Russia
Consumer Adaptability of Non-Cash Payments Russia
Payment Infrastructure of Non-Cash Payments Russia
Ken Research Framework of Payments Landscape
Cross Comparison of Russia with other developed, developing and emerging economies
Russia ATM Terminals Market Overview, Market Size and Introduction
Competitive Landscape of ATM Manufacturers and ATM Management Companies
Future Outlook on ATM Terminals industry by Number of ATM Terminals and Number of Transactions
Russia POS Terminals Market Overview, Genesis and Size
Competitive Landscape of POS Terminal Manufacturers including Market share and Company Profiles
Future Outlook of POS Terminals; By Installed base, Number of Transactions and By Type of Devices
Russia Payment Cards Market Overview, Genesis and Market Size
Card Holder Profile in Russia
Competitive Landscape of Issuers and Payment System Operators in Payment Cards Market
Snapshot on Card Manufacturing Companies
Future Outlook of Payment Cards Industry; By Number of Users, By Number of Cards in Circulation, By Type of Cards and By Type of Transactions
Russia E-Money Market Introduction, Overview and Genesis
Company Profile of Yandex.Money, QIWI, WebMoney and PayPal
Russia Payment Aggregator Market Introduction, Overview and Market Size
Competitive Landscape of Major Players
Company Profile of Yandex.Checkout, Robokassa, UnitPay, Payeer and PayAnyWay
Future Outlook of Russia Payment Aggregator Market
Analyst Recommendations for Russia Payment Services Market
Suggested Strategies to ensure Business Sustainability
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Ankur Gupta, Head Marketing & Communications