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Russia

Mobile Commerce Clusters

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Mobile Commerce Clusters
Measures partnerships among banks, mobile networks, and governments.
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Environment

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Environment
Measures economic, technological, and demographic factors within a market.
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Infrastructure

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Infrastructure
Measures the sophistication and penetration of the mobile phone industry and NFC terminalization.
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28.5

Consumer Readiness

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Consumer Readiness
Measures how familiar with, how willing to use, and how frequently consumers are currently using all three types of mobile payments.
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Financial Services

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Financial Services
Measures the effectiveness and penetration of consumer financial products.
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Regulation

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Regulation
Measures legal and regulatory structures and how they affect businesses.
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Summary

Russia scores 28.5 on the MasterCard Mobile Payments Readiness Index, putting it in 28th position. Russia scored well in the categories of Infrastructure, Mobile Commerce Clusters, and Consumer Readiness, but did not score as well in Financial Services, Environment, and Regulation. Although the Russian market is still evolving, the situation outlined above suggests that MNOs/banks/payment networks should begin to socialize the concept of using mobile payments for specific needs.

Telcos have taken the lead in creating mobile payment systems in Russia. Russia has mobile phone penetration of 230 percent of the population aged 15 to 64, which makes it a fertile market for mobile payment growth. Russia scored substantially higher than average in familiarity with P2P payments—24 percent versus 16 percent.

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What you need to know:

Telcos have taken the lead in creating mobile payment systems in Russia
The regulatory and banking systems in Russia present challenges, but new initiatives in the former could help speed matters
Russia scored substantially higher than average in familiarity with P2P payments—24 percent versus an average of 16 percent

Country Overview

Market Forces

Mobile payments have gained considerable traction in Russia since new legal parameters were implemented for the sector last year. Currently, all the major MNOs offer their own payment solutions. But it's really the telcos that have taken the lead in creating mobile payment systems in Russia, mostly as a means to reduce the need for their cash-based kiosks.

Telcos and banks are joining forces to address opportunities in the payments landscape.

Telcos like VimpelCom, MTS, and Megafon are partnering with banks to allow consumers to pay for utilities, transit tickets, entertainment, and other services. MTS and Megafon have also launched similar services connecting mobile accounts and card payments.

Russia is also experiencing an increase in NFC activity, particularly in mass transit. This kind of innovation and partnership is what drove Russia's high scores in the categories of Infrastructure and Mobile Commerce Clusters. As in other countries, banks in Russia are targeting their marketing of mobile payment services to those segments of the population which are more likely to be early adopters.


Consumer Sentiment

Russia performed as well as it did on the Index largely because of the Mobile Commerce Cluster and Infrastructure scores coupled with relatively high consumer scores. Frequency is quite high in P2P
(seven percent versus an eight percent average), while lagging badly in m-commerce (three percent versus a nine percent average) and POS (one percent versus a five percent average). Willingness for P2P is quite high (17 percent versus a 19 percent average) and respectable for both m-commerce (11 percent versus a 21 percent average) and POS (10 percent versus a 17 percent average).

Numbers like these suggest a targeted approach aimed at solving specific payment issues, perhaps for particular segments of Russian consumers. The RuRu program is a good example of a bank/telco partnership that could provide a template for broader acceptance going forward.

Consumer scores suggest a segmented marketing approach.
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GLOBAL PERSPECTIVE ON CONSUMER SENTIMENT IN RUSSIA

Relative to the Index average and leading countries, how do consumers feel about mobile payments?

54% - France
Country Score Index Average Leading Country

MasterCard Conclusion

Market forces in Russia are not as well developed as in some of the leading countries on the Index, but key partnerships between banks and telcos such as RuRu are emerging to fill real payment needs among Russian consumers. The higher levels of willingness to use mobile P2P payments indicate that consumers are looking outside the existing financial system for innovative ways to manage their money. Improvements to market forces, as well as targeted marketing of mobile payments offerings to those consumers interested in P2P, will enhance Russia's mobile payments readiness.

28.5
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