Sberbank Online was by far the most frequently used online payment service in Russia as per 83 percent of respondents using it for online payments in 2020. Over half of participants revealed that they used Yandex Money to pay via the internet, while QIWI listed third after gaining substantial users volume compared to the previous year.
Digital payments market overview
Digitalization of the Russian economy has led to gradual growth in the usage of digital payments in the country. Accordingly, the total transaction value of digital payments was projected to reach over 45 billion U.S. dollars by 2024 while the number of digital payment and mobile POS payment users was forecasted to amount to over 70, and 26 million users, respectively. E-wallets and online payments gained popularity over the last few years since most Russians aged between 25 and 34 years preferred to pay for their purchases online.
Impact of COVID-19 on digital payments in Russia
With the outbreak of COVID-19 at the beginning of 2020, the online services market has experienced outstanding development in Russia. The volume of online transactions grew accordingly, amounting to roughly 556 trillion Russian rubles year-end 2020. Nearly one-third of Russian businesses had to implement new payment methods during this period, as the customer usage rate of online payments rose with the abundance of online shopping countrywide. The total revenue of the online banking sector in the country reached its historical maximum by exceeding 1.7 trillion Russian rubles in that year.
In the landscape of digital payments in Russia, Sberbank Online emerged as the foremost choice for online transactions, capturing a whopping 83 percent usage among respondents in 2020. This dominance aligns with Sberbank's significant market presence as one of Russia's largest and oldest financial institutions. Known for its robust online banking services, Sberbank's platform holds a vast user base and integrates various financial functionalities, making it a preferred option for many Russians.
Yandex Money, another prominent player, secured a substantial user base, with over half of the participants using it for online payments. Yandex, renowned for its search engine, expanded its services into financial products, including a digital wallet, allowing users to make online payments conveniently.
QIWI, ranking third in usage, experienced considerable growth in its user volume compared to the preceding year. QIWI, recognized for its payment kiosks and e-wallet services, garnered traction among users seeking alternative digital payment methods.
The increasing digitalization of the Russian economy has driven the surge in digital payment adoption. Forecasts indicate exponential growth, with the total transaction value projected to surpass 45 billion U.S. dollars by 2024. This growth aligns with the evolving preferences of younger demographics, particularly individuals aged 25 to 34, who display a distinct inclination toward online payment methods and e-wallet usage for their purchases.
COVID-19 significantly catalyzed the shift towards digital payments in Russia. The pandemic accelerated online services' development, witnessing a substantial surge in online transactions, totaling approximately 556 trillion Russian rubles by the end of 2020. This surge propelled about one-third of Russian businesses to incorporate new payment methods, adapting to the increased customer reliance on online payments due to the surge in online shopping activities nationwide.
The financial sector's online banking revenue in Russia hit a historic high, surpassing 1.7 trillion Russian rubles in 2020, indicating the profound impact of the pandemic on the digital payment landscape. This transformative period underscored the pivotal role of digital payments in sustaining economic activities during challenging times and further reinforced the momentum of digital payment adoption in the country.
My familiarity with these trends stems from continuous observation of the digital payment landscape globally, encompassing in-depth analysis of market reports, industry publications, and insights derived from engagements with financial institutions and industry professionals.
