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State Banks Eye Russia's $740Bln Plastic Card Market

Published: April 4, 2014 (Issue # 1804)



  • Sberbank's offer to create a national payment system was not supported by the Central Bank.
    Photo: Ekaterina Kuzmina / For Vedomosti

As top government officials speed up the birth of a national credit card system in an asymmetrical response to U.S. sanctions over Russia's incorporation of Crimea, major state banks are eyeing their share in the multi-billion dollar financial transactions market.

President Vladimir Putin has supported German Gref, the CEO of Russia's largest lender Sberbank, who offered to create a national payment system based on the existing Universal Electronic Card, or UEC.

Putin ordered the prime minister to review all the possibilities of using the UEC, followed by a corresponding decree of the Cabinet to the key ministries. Officials are to report of the results of their evaluations by mid-April, Kommersant reported Thursday.

The UEC started to be issued to Russian citizens beginning from 2013 and initially was meant to replace the existing internal passport. Besides carrying all the necessary personal data, it is possible to make payments with the card as with a regular plastic. About 300,000 of these cards, powered by Sberbank's PRO100 payment system, have been issued so far and they are accepted by most cash machines and acquiring terminals across the country.

Top government officials have repeatedly said the national payment system was a must-have as a necessary means of security against sudden malfunctions of international payment systems.

At the end of March, Visa and MasterCard stopped providing services for payment transactions for the clients of Bank Rossiya and SMP bank, co-owned by brothers Boris and Arkady Rotenberg, allegedly Putin's close allies. The taken measure was reportedly part of U.S. sanctions against the Russian annexation of Crimea.

"National payment systems exist in many countries and Russia should think of one as well," said German Gref following the incident, adding that Sberbank has own system that is up to the task. He said the system could be applied across the country within several months after adjusting legislation.

Currently, Visa and MasterCard take up, respectively, 60 and 35 percent of Russia's credit card market, which according to the Central Bank saw almost 26 trillion rubles ($740 billion) worth of transactions in 2013.

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ALL ABOUT TOWN

Saturday, Nov. 22


Russian Premier League-leaders Zenit St. Petersburg return from the international break to take on Kuban Krasnodar at Petrovsky Stadium this evening at 7 p.m. Tickets for the game can still be purchased on the club’s website, at the Petrovsky Stadium box office or in any of the club’s merchandise stores.



Sunday, Nov. 23


Get in the holiday spirit at today’s Winter Bazzar at the Astoria Hotel. Featuring gifts from around the world such as French eclairs, Dutch cheeses and Indian jewelry, the annual event organized by the International Women’s Club will feature 18 international stands and raise money for charity through the sales of a diversity of products that further illustrate the city’s international connections.



Monday, Nov. 24


Dr. Axel Schulte, Department Head at Fraunhofer Institute for Material Flow and Logistics in Dortmund, Germany, is the featured speaker at the SPIBA Industrial Committee lecture on “The Fourth Industrial Revolution: Digitalization of the Supply Chain.” The event begins at 4 p.m. at the Graduate School of Management at 3 Volkohvsky Pereulok and registration is required by Nov. 21 either by emailing office@spiba.ru or calling 325 9091.



Tuesday, Nov. 25


Tag along with AmCham during their “Industrial St. Petersburg” Tour program today. This incarnation of the ongoing series will visit Philip Morris Izhora and include an Environmental Health and Safety Committee meeting.


Find out how to expand your business east during the “Business With China” forum beginning today and concluding tomorrow at the Lenexpo convention center. The largest Russian forum dedicated to business with the Asian giant, topics that will be discussed include logistics, customs clearance, trade financing and many more.



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