In a cross-border market that is still growing fast by reaching around USD 4 billion in 2014 for physical goods, the Russian payment issue is to be considered carefully by foreign online retailers. Important local specificities should be kept in mind, including the following:• In Russia, cash has remained the predominant payment method, more so than in most developed or emerging countries.• Among electronic payment means, those available at foreign online stores may differ from those to which Russians are accustomed to. Bank cards and PayPal are widely offered internationally but not widely used in Russia. (While shopping on foreign websites, however, many Russian online consumers are willing to use bank cards, which they would be reluctant to use on domestic sites).• Some specific payment tools, for instance, recurring payments and one-click payments, may not be easy to implement when working with Russian consumers.
The more local payment options you will make available to Russian internet users, the higher the chance to transform them into your customers. It is not by chance that Russia-focused mail forwarders, as well as large international websites selling a significant fraction of their products to Russia, have all made available one or several localised payment means.
Most of the websites, those not considering Russia as a key market, do not offer localised payment means, which certainly stands as an obstacle to attracting more Russian consumers.
Payment methods in Russia
Even cash-on-delivery, the Russians’ favorite option when it comes to physical goods, may be used in a cross-border context, as shown by several successful cases in 2013 and 2014.
International PSPs and local aggregators
While some international PSPs have developed a deep relationship with Russian payment operators, not all of them integrate Russia’s local payment methods to a sufficient extent, if at all.
So, if you feel that your PSP is not good enough working with Russian specifics, you may deal with a Russian (or Russia-oriented) payment aggregator. This will spare you the task of dealing with each Russian payment operators individually.
These aggregators act as subcontractors to process the transactions, regardless of the payment methods chosen by the customers, and manage all technical and administrative issues. Among the most significant aggregators are: DengiOnline, PayAnyWay, PayU, Robokassa, RBK Money and Yandex.Money.
Fraud and refusal issues
Russia is commonly associated by foreign operators with a high level of such payment issues as fraud and refusals. The data and expert opinion collected during this research do not support this view. To put it shortly, “the Russian market is not that different than any other market when it comes to the card payments main indicators, be it fraud or the decline rate, notes the Merchant Risk Council (MRC).
About Adrien Henni
Adrien Henni is chief editor and co-founder of East-West Digital News, the international resource on digital industries and ecommerce in Eastern Europe. After 10 years of experience in the internet, mobile and venture businesses in France, Russia and Ukraine, Mr Henni advises a variety of startups, funds and other organisations.
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