Cashless transactions exceed cash use in Russia

For the first-time, over half of all product and service purchase transactions in Russia were paid for using non-cash payment instruments.

Consumers made 50.4% of all transactions using cashless instruments in the fourth quarter of 2019, up by 4.5 percentage points (from 45.9%) in the same quarter one year earlier. The analysis was performed by Russia’s largest bank, Sberbank, as part of its big data analytics and processing initiative which has been tracking the growing trend of cashless transactions, according to a press release.

A major driver fueling the growth of cashless transactions has been the dramatic adoption of payment cards by Russians. Cards accounted for more than two-thirds (68.4%) of all cashless transactions in the first half of 2019.

The payment card adoption is seen as a sign of success for Russia’s domestic payment network, Mir, which was created in 2015 as a counter to the dominance of Visa and Mastercard, which were hit with sanctions by President Vladimir Putin in response to U.S. sanctions over Russia’s annexation of Crimea in 2014.

The Russian non-cash payment trend is following the same global phenomenon of consumers increasingly going cashless. Despite “cashless bans” being sought in U.S. cities and states, the desire for consumers to use card and mobile payments is on the rise.

The larger Russian cities tended to have higher levels of cashless payment volume, with five cities exceeding 60% of transactions, including Syktyvkar and Severodvinsk. Interestingly, Moscow and Saint Petersburg both failed to make the top 10 list of most cashless Russian cities. Moscow came in 30th place with 53.7% of cashless transactions, and Saint Petersburg landed in 19th place with 54.6% of cashless transactions.

Overall, the Murmansk region in Russia’s frigid Northwest leads the country with the highest level of non-cash trade volume, coming in at 60.2% of trade in the fourth quarter of 2019.

Sberbank analysis notes that if it were to add person-to-person payments to the shopping payment volume, then the proportion of cashless transactions would represent 68.8% of total transactions in the fourth quarter of 2019.