Sberbank, Russia’s largest bank, last month officially abandoned plans to develop its Sberkart payment card program into a national payment system that would compete with Visa and MasterCard.
Shareholders recently decided after five years of development that Sberkart would have little chance of succeeding on a national scale, Viktor Orlovsky, Sberbank vice president and chief executive of Sberkart Company Ltd, tells PaymentsSource.
A special meeting of Sberkart shareholders will be held sometime this month to decide the fate of the company, a bank spokesperson tells PaymentsSource. Major stockholders in Russia include Sberbank, the National Reserve Bank and the Interregional Investment Bank.
Sberbank hoped to expand its proprietary Sperkart smartcard program to compete with Visa and MasterCard within Russia, and in 2005 invited other banks to join the system.
Russia’s central bank vowed to support the program, which was built around Sperbank’s microprocessor cards with technology designed by Austria-based BGS Smartcard Systems A.G.
But the project ran into a variety of obstacles, including “technology, partners and approaches,” Orlovsky says.
According to Sberbank’s website, some 44,000 merchants are equipped to accept Sberkart.
Fewer than 4 million Sberkart cards are in use at this point, mostly issued by Sberbank, the bank spokesperson says. “They make up less than 5% of the total number of credit cards issued by Sberbank.”
Sberbank no longer issuers Sberkart cards; instead it offers PRO100 credit cards using EMV chip technology, which are “compatible with international standards and offer more options,” the spokesperson says.
Sberbank still supports the idea of a competitive national payment system, Orlovsky said, but he wouldn't elaborate on any plans.
“Such [a competitive national] system should offer clients a wide variety of products and services and should be simple and safe,” he adds. “Our new PRO100 technology is a good start.”
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