During the pandemic, Russians actively moved away from cash toward cashless payments. In terms of the rate of decline in cash usage, Russia ranked fourth in the global ranking compiled by Boston Consulting Group (BCG).
BCG Global Payments 2020 by ForkLog on Scribd
First place for this indicator is held by the United Kingdom (-62%), followed by Canada (-59%) and Australia (-53%).
Romania (-48%) shares fourth place with Russia; in fifth place is the Netherlands (-47%).
The indicator was calculated as the difference between the number of consumers who used cash more actively and those who used it less actively during the pandemic.
The survey was conducted in 30 countries from May 18 to June 19, and involved 17.6 thousand people.
BCG analysts подсчитали that from 2010 to 2018 the number of cashless card transactions in Russia grew thirtyfold — from 5.8 to 172 per person per year. Russia became the largest European market by the volume of transactions using digital wallets and the world leader in the number of secure tokenized transactions.
“The reasons for such success lie in the fact that the actions of each participant in the transition to cashless operations acted on one another as catalysts, fueling and accelerating rapid development. The combination of cheap retail financing, high market concentration and large investments in technology helped create the ‘Russian miracle’, the report says.
According to Max Hauzer, managing director and partner at BCG, the pandemic provided a boost to the development of digital technologies.
According to Mastercard’s June survey, 22% of the payment system’s customers пользуются exclusively cards. Visa рассказывает about the growth in contactless cards by 41% and mobile payments by 31% during the pandemic.
According to the Central Bank of Russia, the share of cashless payments in Russia by year-end will exceed 70%.
Independent expert Mansur Guseinov explains that Russia’s high ranking reflects the convenience of cashless payments:
‘The card technologies that came to us were quite advanced and, as a result, convenient to use. In the United States, cards and checks have existed for a long time, and banks were not rushing to introduce something new while the old system worked,’ he said in a ForkLog interview.
Several problems stand in the way of Russians moving to cryptocurrency payments:
‘Their price is highly volatile, and the authorities in Russia have been and remain a step away from banning them. Bitcoin and most other cryptocurrencies are not really ready for mass adoption — blockchains will not cope with mass payments,’ Guseinov notes.
However, if the first two questions are resolved, there will be a solution for the third as well, the expert adds.
CEO of Pay Super Dmitry Machikin explains Russia’s high ranking in the survey by the slow development of the cashless payments market:
‘In many countries, the development of digital payments and fintech penetration occurs more gradually and naturally. In Russia, given a certain lag in technology in the 2000s and an over-saturated cash market, there was a genuine quantum leap’.
Although Russia is a promising country for digital payments, talk of mass adoption is premature:
‘It is not so much about technology as about regulation and trust in cryptocurrencies. Unfortunately, far from many people understand their advantages and see only drawbacks,’ said Dmitry Machikin.
Earlier in September, Chainalysis named Russians, alongside Ukrainians, among the most active cryptocurrency users in the world.
The Law on Digital Financial Assets, which will take effect on January 1, 2021, effectively bans the issuance and circulation of cryptocurrencies on the territory of the Russian Federation. Violators face up to seven years in prison and fines.
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