keywordsCartes & IDentification 2009
Russia is the guest of honour at CARTES & IDentification
Date: Fri, 11/06/2009 - 17:14
Mobile telephony is a clear success. Russia has become the third biggest market in the world for SIM cards. Revolutions in terms of payment and identity are also underway
From 17th to 19th November 2009, CARTES & IDentification (Trade shows and Conferences) is inviting Russia to be its guest of honour. The country has experienced a significant economic growth in recent years which has made its population wealthier. The sharp growth in credit cards available from banks and the obligation on retailers since 2006 to acquire new payment terminals to accept the cards, have led to an increase in the value and volume of transactions. Russia’s key players in this market, both exhibitors and visitors, will be the focus of this CARTES & IDentification, through dedicated conferences, visits by delegations, a cocktail in
the country’s colours and dedicated networking areas.
Third biggest market for mobile telephony
With 194 million mobile phone subscribers in the first quarter of 2009 (Informa telecoms & media), the Russian market is the third biggest in the world after China (600 million subscribers) and India (300 million subscribers). It is also one of the markets experiencing the highest growth (more than 15% in 2008) and one of the highest penetration rates (130%; compared with China: 44%, India: 23% and Brazil: 73%). It is also one of the biggest markets for SIM cards, since the three major Russian operators,
MTS, Vimpelcom and MegaFon offer GSM technologies and began to roll out their first 3G networks two years ago. Mobile internet is still little used (around 2% of subscribers in 2008), but it is due to take off in the near future. This growth has pushed the largest Russian operator, the MTS Group with 80 million subscribers, into second place among mobile phone operators in Europe, behind Vodafone (130 million subscribers1). It also promotes the international growth of this services industry through concentration moves, such as the merger recently agreed between Ukrainian operator Kyivstar (26 million subscribers), and Vimplecom (58 million subscribers), to create a mobile phone operator to rival MTS.
Mobile payment is emerging
It is still too early to talk about convergence between mobile applications and payment applications despite the launch a few years ago by one operator (Gorod) of a payment system using mobile phones (SimMP) enabling payment in around 50 cities of bills for municipal services and various subscriptions to local services. Its roll-out has so far been very limited. In Moscow, the major Russian banks – Sberbank, Alfa Bank, and the Bank of Moscow – also launched mobile payment services. Interest and initiatives are becoming more established, as demonstrated by approaches made recently by Russian banks to the Franco-European “Payez-Mobile" association. But plans for this type of payment will only be launched in the long term. This is because large-scale migration of Russia's payment terminals and a change in card payment behaviour are needed. As a sign of the times, this
development may also result from the upgrading of payment methods accepted for public transport. Since the beginning of 2008, the Moscow metro has used a system of electronic “paper” tickets which has led to a reduction in fraud and maintenance costs. Two elements to drive a future general migration to contactless technology.
Bank cash cards
With 123 million payment cards for private individuals2 (mainly cards with magnetic strips) in circulation in the second quarter of 2009 (up 10% on the same period in 20083), Russia is still a country which has a long way to go in terms of banking services. These cards are mainly cash withdrawal cards for use at cash machines. As a result, the country has become the largest European market for cash machines ahead of the United Kingdom, with more than 82 800 machines in use4. In the second quarter of 2009, more than 45 billion euros were withdrawn from cash machines by card, while over the same period just 4.6 billion euros was spent using the same cards in shops.
Changes are likely. The existence in Russia of a big financial and industrial group (Sitronics) operating in the semiconductors, telecommunications and “smart security" sectors may have a federating effect on payment (card and mobile), identity cards and healthcare cards.
The biggest Russian bank, Sberbank has recently made its subsidiary SITRONICS Smart Technologies (SST) responsible for supplying EMV Visa and Mastercard smart cards to the Russian market.
To meet the key players in the Russian card and digital security industry (BPC, Rosan, Compass Plus, Terminal Technologies, SHTRIH-M), and attend new conferences and round tables, come to CARTES & IDentification from 17th to 19th November.
1 Source: Wireless Intelligence, January 2009
2 The number of cards used by companies or government bodies is around 250,000 (second quarter 2009).
Unlike for private individuals, they are used more to buy goods and services (33 billion rubles = 750,000
million Euros) than for obtaining cash (25 billion rubles = 573 million Euros).
3 Russian Central Bank figures
4 Retail Banking Research, July 2009 figures