Yandex.Money’s experience with international online retailers shows that the Russian e-commerce market holds many surprises for Western merchants. Internet Retailer has recently published an overview of Russian online shopping; here are several features of the local online payment market.
Global payment leaders have failed to change the habits of Russian users, who prefer local services. As a result, Russian payment systems are more popular in the country than international ones. Therefore, to reach as large an audience as possible online stores in Russia try to accept all well-known e-wallets: 47% of stores accept Yandex.Money e-wallets, 44% WebMoney and 39% Qiwi. PayPal now covers 8% of online stores in Russia.
E-wallets appeared on the market before bankcards
In June 2015, an international think tank, TNS, conducted research to explore the behavior of Russian users related to online payments. They found 40% of e-wallets users pay that way both via mobile devices and computers, 7% only on smartphones and 53% only on computers. The survey was of regular Internet users ages 20-44 living in large cities in Russia. Further, almost all respondents have heard of online payment methods, 74% of the responders use them at least once a year, and almost half of the respondents several times a month. The most active users are aged 25-34.
Speaking about mobile e-wallets, Russia has the most active e-wallet users in the world, according to a report of Datamonitor.
The popularity of e-wallets can be explained through the history of the market. Surprisingly, in this country e-wallets appeared nearly 15 years ago, emerging even before bankcards. As unlikely as it may seem, at that time e-wallets were more suitable than bankcards for making online payments. That’s because bankcards struggled to adapt to the Internet. While bankcards were trying to reach the audience, e-wallets had already accomplished that—users had become familiar with them and with offline payments kiosks. As a result, the Russian payments market is now very diverse and merchants have to provide consumers with all payment methods in order not to lose a single customer.
Russian users pay online for everything
E-wallets are most commonly used for online purchases, paying mobile and home utility bills, music, movies, games, and transfers to other users. Desktops are used for making online purchases, while smartphones and tablets are used for paying for mobile services. Young people from 20 to 24 are the most active at paying with e-money for tickets to concerts and online content. Respondents aged 35-44 actively use e-wallets to pay for mobile services and home utilities.
In terms of cross-border online-shopping, the product categories most popular with Russian consumers are clothing, make-up products, perfume, accessories and products for children and babies, according to a recent reports from Yandex and research firm GfK.
E-wallets compete with cash
Almost 83% of Russian consumers use offline payments kiosks at least once a year and 73% use e-wallets. This means that a comparable number of consumers are aware of kiosks and e-wallets. The kiosks enable consumers to add money to an e-wallet account. Currently all major online payment services are working with kiosks, which means that every kiosk has the access to all popular e-wallets. For instance, Yandex.Money collaborates with the biggest Russian bank Sberbank, where users can top up their e-wallets directly from ATMs.
It is funny that in many cases kiosks are located right next to a cash machine, which means that a customer can withdraw cash from his bank account and put money on e-wallets. To make this process more convenient, online payment services are promote the option of “linking a bankcard to an e-wallet.”
The Russian payment market is quite specific in comparison to payments in the West. Therefore entering this market, it is best to consider all its features, especially the habits of the local audience and to accept as many payment methods as possible, for instance, via payment aggregators. The Russian e-commerce market becomes more attractive despite the struggling of the economy of the country. According to the estimates of InSales, the local e-commerce market will grow at 25% by the end of this year.
Yandex Money is an online payment service operated by Russian search engine Yandex and Sberbank, a bank majority owned by the Russian government. 22 million Russian consumers have registered Yandex Money e-wallets. Sberbank says it has 110 million customers in Russia, more than half the country’s population, and 11 million abroad.