Russian banks have issued 70 million Visa credit and debit cards over the past decade, the card company reported this week as it celebrated its 10th anniversary in Russia.
“On a per capita basis, that means there is one Visa card for ever two Russians, or nearly 70 million Visa cards throughout Russia,” Steven Parker, Visa group country manager, Russia, Commonwealth of Independent States and Southeastern Europe, noted in an Oct. 12 statement.
According to the Central Bank of the Russian Federation, as of July 1 some 8.6 million credit cards were on issue countrywide, suggesting most of Russia’s international payment cards on issue are debit cards.
Over the past eight years, the purchase volume on Visa cards has grown dramatically, to $61.5 billion during the end of the second quarter of this year from $306 million during the same period in 2002. The number of merchants accepting Visa cards also grew during that period, to 331,000 from 21,000, according to Visa.
International payment cards have been available to local residents for just more than a decade.
Financial lending to private Russian citizens is growing, according to the latest figures from Sberbank, Russia’s largest bank and one of the top five credit card issuers in the country. As of Oct. 1, Sberbank had issued 1.2 million credit cards, up considerably from 274,361 a year earlier, bank spokesperson Dariya Stoyanovskaya tells PaymentsSource.
Sberbank recently abandoned its plans for the Sberkart card network, which was to serve as an alternative to the Visa and MasterCard Worldwide networks. However the bank’s new PRO100 credit card network might become the cornerstone of Russia’s future national payment system, Viktor Orlovsky, Sberbank vice president, tells PaymentsSource.
So far, however, Visa and MasterCard are the two major payment card players in Russia. However, most banks work with Visa, MasterCard and Sberbank’s PRO 100 networks, Stoyanovskaya says.
MasterCard, which entered the Russian market in 1997, declined to provide any specific data related to Russian activity. The company does not release specific numbers for local markets, says company spokesperson Nicole Krieg.
“Unfortunately, we can’t tell you how many credit cards have been issued for Russia or any other particular country,” she said. (MasterCard actually reports card data specific to the U.S. and Canada. It otherwise provides data only by region.)
The story of the Russian credit card market started in early 2000, when issuers first began launching products, Krieg notes. However, credit products became especially popular in Russia in 2005, after new legislation took effect.
“Banks tried to offer various products based on credit cards, and the number of offers was huge,” Krieg says. “Many banks found interesting cobranding [services] and offered at least one cobranding credit card to their clients.”
Cobranded travel cards are especially noticeable in parts of Russia that border on other countries, Oleg Gornovskiy, the head of news at GTRK Karelia Broadcasting Co., tells PaymentsSource.
“Russians now travel everywhere. Take Finland, Karelia’s (a Russian republic) neighbor. It has become one of the top destinations for Russian tourists. And of course, it’s much more convenient to travel abroad with a credit card instead of a wallet overflowing with cash,” Gornovskiy says. “In the past couple of years, plastic cards became almost a necessity, especially for younger generations. Many people like the idea that they can use these cards both inside Russia and abroad.”
Interest in credit cards among bank customers living inside Russian’s central regions also is growing. In Saratov, a city located 600 miles southeast of Moscow on Volga River, banks are reporting an increased demand for credit cards.
During the first six months of 2010, Express-Volga Bank, for example, issued 70% more credit cards than it did during same period last year, bank spokesperson Marina Lavrik tells PaymentsSource.
“Currently there are over 20,000 active credit cards issued by Express-Volga, and the number is constantly growing,” Lavrik said.
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