Contactless payments in Russia: a Yandex.Money study
May 29, 2019
Russian customers are noticeably more often using contactless payment methods to pay for purchases: the number of payments made with smartphones has increased nearly threefold over the past year. According to Mastercard, contactless in-store transactions are already above 50% in Russia. As VISA reported in autumn 2018, the Russian Federation was one of the top-3 markets in terms of the amount of contactless payments.
Contactless payment systems
The number of payments via Apple Pay, Google Pay, Samsung Pay, and Garmin Pay made with Yandex.Money cards has increased 2.5 times over the last year, while the turnover has increased 3.1 times. Yandex.Money users can also pay contactless with a smartphone using the service’s own service app: the number of such payments has increased 2.9 times over the past year, the turnover has increased 2.5 times.
Contactless payments are popular among customers of both online and offline stores — from Wildberries as one of the most popular stores in terms of frequency of contactless payments, to Cartier with the average check of $3590 (232,000 rubles) via Yandex.Money.
Smartphones vs. traditional cards
Within the contactless payments segment, smartphones are gradually replacing physical cards. In the total amount of contactless payments made via Yandex.Money, the percentage of payments made with smartphones has increased from 29% to 39%, and the turnover accounts for 48%, which is 1.5 times more than a year ago.
Virtual and physical cards
A year ago, virtual cards accounted for 20% of the turnover of contactless payments via Yandex.Money, and now they account for 35%. The percentage of the turnover of such payments made via physical cards has decreased accordingly from 80% to 65%.
Amounts and categories of spending
Most contactless payments made with Yandex.Money cards (91%) are in the amount of up to $15.5 (1,000 rubles). The percentage of payments from $15.5 to $77.4 (5,000 rubles) has decreased from 9% to 8%. Amounts from $77.4 up still account for less than 1% of payments.
Most often, customers use contactless payments for relatively inexpensive goods and services, such as food and alcohol (average check is $6, or 383 rubles), dining in a cafe ($4.7, or 306 rubles), transportation ($3.1, or 201 rubles). The other average checks are medical services ($6.7, or 435 rubles), purchases at gas stations ($13.3, or 857 rubles), utilities ($27.8, or 1,799 rubles), professional services ($26.1, or 1,689 rubles), Internet services at home ($11.2, or 722 rubles), entertainment ($6.2, or 403 rubles), electronics and household appliances ($44.5, or 2875 rubles), movies, music, and other digital content ($6.8, or 441 rubles), transportation rentals ($4.1, or 266 rubles).
The Yandex.Money analysts have examined how Russians use the service’s cards to pay contactless in various stores, from hypermarkets to luxury brands, taking into account the data on user payments for the last 12 months against the same period a year earlier. In total, Yandex.Money has issued 800 thousand physical and 17 million virtual cards.
Yandex.Money is the largest online payments service in Russia, according to a 2018 survey by Mediascope. The company is the joint venture of the search engine Yandex (NASDAQ: YNDX), and Sberbank. Yandex.Money offers consumers easy, safe, and reliable methods of paying online on its own site and mobile app. The service hosts about 46 million user accounts.
Yandex.Money also offers online merchants Yandex.Checkout. Yandex.Checkout is the leading service for accepting online payments in Russia, according to a 2018 survey by MARC. With this payment solution, merchants from all over the world can offer Russian consumers the online payment methods most popular among Russians and CIS-citizens: bank cards, e-wallets, mobile phones, and cash via mobile retailers and payment kiosks (there are over 250 thousand cash-acceptance points all over CIS). Currently, more than 106,000 online stores across the globe use Yandex.Checkout. The service received the Best PSP Award in 2019 and the Emerging Payment Award in 2017 at the Merchant Payments Ecosystem conference (Berlin).