Focus on Online Payment Services on the Russian Market Focus on Online Payment Services on the Russian Market

Focus on Online Payment Services on the Russian Market

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on 4 May 2016

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Russia counts nowadays more than 80 million of internet users, including 30 million of e-shoppers. In the country, e-commerce is in constant growth and reached 18 million euros of turnover at the end of the year 2014.
One of the issues foreign companies are facing off when they want to implement their activities on the local market is the choice of online payment system. Indeed, the Russian e-commerce market has its own features. Companies must adapt and adjust their online payment tools to fit the needs and habits of Russian customers.

payment
The payment by cash still remains an option deeply fixed in people’s minds including e-commerce purposes. It is the most popular payment habit in Russia, corresponding to 80% of all Internet transactions. A courier collects the money at the moment of products delivery and then gives it back to the e-commerce retailer. This lack of trust in traditional banking card system can be explained by several factors: it exists medium to high risks of frauds regarding fake banking card so most companies are reticent to use it. And secondly, fees are more important than in any other countries.

Popular payment type in Russia (in %)

payment types
Even though customers and retailers prefer the Cash on Delivery option when available rather than all the others, the payment via terminals is also getting more and more popular among Russian citizens. They are located in strategic areas such as commercial centers, stores, restaurants, metro). Very easy to use, it only requires to confirm the order on the web, find one of these terminals, enter the serial number of the given order and to pay in cash. It is also possible for those with an electronic wallet to pay via these terminals.

What about alternative payments?

The electronic wallet (or e-wallet), remains the most popular alternative payment option. In Russia, 3 main actors are present on this emerging market: Yandex.Money, WebMoney and QIWI.
Webmoney counts up a very important number of users (around 14 Million) and offers 4 differents types of connexions to settle purchases (Desktop, Mobile, internet browsers…) Apart from traditional currencies, WebMoney integrates also payments in minor and more local currencies.

With more than 46,000 retailers in its network, QIWI plays also a major role and has around 13 Million users. Its system has the particularity to offer 2 payment options to customers, either by card or by cash.
Last, Yandex created in 2002 its own e-wallet platform called Yandex.Money and has been able to attract more than 22% of regular Internet users since (20 Million people). It can be loaded using a variety of different methods, such as bank transfers or by paying cash at participating terminals, making it a convenient option for shoppers and giving them choice and familiarity. Nowadays, more than 76,000 Russian websites use this solution, like AliExpress, Apple iTunes, Nintendo or Skype.

Payment via e-wallet are unavoidable for every retailers wishing to penetrate the Russian market in an optimal way. Indeed, e-wallets will equal cards as the most popular payment method globally in the long term. In 2012, $295 billion was processed through e-wallet payments and this is set to rise to $1,656 billion by the year of 2017.
To illustrate these tendencies, Yandex.Money, one of the main online payment services in Russia proposed by the giant Yandex, has conducted a study on online payment habits. This survey was targeting Russian aged between 20 and 44 years old who live in cities of at least 700,000 inhabitants.

Awareness of online payment services

yandex
This graphic shows clearly the difference in popularity between the leader Yandex.Money (92%) established in 2002 and its other more recent competitors like QIWI (only 55% of awareness).

Use of e-money

emoneyE-money users on smartphones and desktops

emoney usersE-money payment per categorie according to users’ age (in %)

emoney payment per categoriesAwareness of non-cash payment methods

awareness of non-cash payment methods

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Focus on Online Payment Services on the Russian Market