Why is the Eurasian payments market good for growth

Based in the UK, Victoria Conroy is a writer and researcher, and the Editor of PCM’s Digital and Card Payments Yearbooks. We asked Victoria for her perspective on the highlights from this year’s findings on the Eurasian payments market. 

What to your mind are the most noteworthy trends this in the Eurasian yearbooks for 2021?  

Instant payment is proving to be a big hit across the region. Latvia reported over 16.1 million instant payments worth €3.5 billion in 2019, representing growth of 191{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in volume and 201{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in value from 2018. Over 90{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of bank customers in Latvia can access to instant payments.

In Russia, by the end of 2019, over 6.8 million instant payments worth RUR 59.7 billion were made, with the number of transfers 67 times greater in the fourth quarter 2019 compared to the first quarter 2019,, indicating the growing use of making instant payments via mobile devices.

Clearly, some of the Eurasian markets are at an earlier stage of development compared to some Western European markets. That said, is there any evidence of “leapfrogging”, i.e. next generation payments like digital payments/mobile wallets being adopted?

From a previously low level of online banking penetration, we’re seeing rapid uptake of digital and mobile services, which is accelerating financial inclusion.

In particular, mobile apps are proving to be the main conduit for many banking and payment services, with mobile banking app usage rates of between 40{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} and 140{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in many Eurasian markets.

Contactless usage is rising quickly, accelerated by the Covid-19 pandemic and the implementation of higher contactless limits.

In Hungary, the limit went from HUF 5,000 to HUF 15,000, meaning almost 90{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of POS purchases fell into the range of transactions that can be carried out at the POS.

Across the EU, we’re seeing bank numbers and branch and ATM numbers decline to be replaced by super-capable ATMs and digital banking. Is this also happening in Eurasian markets?

Eurasian banks are increasingly replacing staff-supported bank services and branches with smart ATM terminals, and by adding automated self-service devices allowing online access.

The latest ATM device technology enables online bank services onsite including loans, coupons, bill payments and international money transfers in order to support unattended self-service bank branches.

In addition to replacing legacy ATMs with smart ATMs, many Eurasian banks are deploying mobile cash services at ATMs. Customers can withdraw cash at ATMs from their mobile wallets or deposit cash to ATM.

Another option is to show a QR-code, sent by the bank to the smartphone, to the ATM device and authenticate with the phone to complete the cash transaction.