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8 Apr, 2015 15:31

Domestic payment cards to have 50% of Russian market by 2018

Domestic payment cards to have 50% of Russian market by 2018

The number of domestic payment cards in the Russian market could be hundreds of thousands by 2018, which is more than 50 percent of the market, said the head of the National System of Payment Cards (NSPC) Vladimir Komlev.

"We expect that in 2018 the card will represent a significant share of the Russian payments market. In my understanding, this certainly means that not less than 50-60 percent of the Russian card market will have the logo of NSPC," said Komlev. The number of national cards in Russia will amount to "hundreds of thousands” in 2016, he added.

Other international payment systems such as CUP, JCB and American Express will be transferred to the NSPC in the near future.

"We are at the final stage of verifying the terms, I think it will happen in the near future," he said.

The Japanese JCB payment system says it is ready to start cooperating with NSPC by the end of 2015. The company estimated tens of thousands of its cards could be in use in Russia in 2015. The largest Russian banks, including Gazprombank, Uralsib and VTB 24 are also increasing the issuing of ChinaUnion Pay cards.

READ MORE: Japan’s credit card firm to start using Russia’s national payment system by end of 2015

Russia has already issued 227 million NSPC cards, said the Deputy Chairman of the Central Bank of Russia Georgiy Luntovsky, according to TASS. He also said the CBR expects the company to become self-sufficient by the end of 2015. The system expects to conclude agreements with 10 Russian banks on issuing cards by December.

Russian companies and banks have showed an interest in to acquiring shares in NSPC from the Central Bank, he said.

The law prohibits the sale of NSPC shares for 2 years, as CBR is expected to raise the company's market value first.

Currently Visa and MasterCard account for 90 percent of the cards issued in the country.

In March 2014 both payment systems suspended their service of a number of Russian banks (SMP Bank, InvestCapitalBank, Rossiya and Sobinbank) as part of Western sanctions over the crisis in Ukraine. After that, Russia adopted a law establishing the National System of Payment Cards under the control of the Central Bank of Russia.