ReportsWeb- The Cards and Payments Industry in Russia-Emerging | Page 2

Key Highlights
Following the invasion of Crimea on March 18, 2014, the US government imposed sanctions
against Russia in March 2014. Consequently, Visa and MasterCard stopped processing card
payments in the country. To counteract this move, the Russian government launched the
National Payment Card System (NPCS) on April 1, 2014, followed by the Mir national payment
card in December 2015. The Russian government plans to issue Mir cards on a large scale in 2016,
and promote the cards among government employees. A total of 35 banks have expressed an
interest in issuing Mir cards, with seven already issuing them during the pilot.
The uptake of alternative payments among Russian consumers is gaining traction as a result of
the availability of options such as Yandex.Money, WebMoney, Moneta and PayPal. Banks and
payment service providers are also investing in offering customers a choice of payment option,
whether in-store, at home or mobile. Most recently in August 2015, Visa and Russian payment
service provider Qiwi launched the Visa Qiwi Wallet. Apart from making payments, the co-
branded digital wallet can also be used to receive and transfer money worldwide. Visa Qiwi
Wallet accounts can be topped up at 100,000 Qiwi kiosks throughout Russia, by linking to a bank
card or mobile phone account. This initiative is expected to further shift consumer focus on
alternative payments.
Contactless technology is expected to gain prominence among Russian consumers. Banks and
payment service providers are also keen to promote contactless technology, and are launching
new services to increase its uptake. The latest of these is the launch of the Visa Qiwi Wallet, which
incorporates Visa’s payWave contactless technology, in August 2015. In June 2014, Russia
Standard Bank entered into an agreement with Samsung Electronics and MasterCard to launch a
contactless payment service for NFC-enabled Samsung smart phones. As part of the agreement,
users of Samsung Galaxy S4 and Samsung Galaxy Note 3 devices can make contactless mobile
payments (m-payments) using MasterCard’s PayPass technology. These initiatives are
anticipated to provide a push to contactless payments in the country.
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