While Russian consumers traditionally use cash rather than cards when shopping, they are now increasingly turning to digital payment systems, which help boost the growth of online retailing.
A PwC report that polled 1,074 people in Russia noted that online sales account for just three per cent of total retail sales in Russia.
However, the penchant for shopping online grew as home and mobile internet penetration expanded. Over 50 per cent of all Russian households had broadband internet access in 2013.
Nonetheless, the habit of paying in cash has not held back the retail sector. In fact, most of the consumers prefer a “click and collect” option in which items are paid for once they are picked up.
Dmitry Kostygin, chairman of one of Russia’s largest e-retailers, Ulmart, revealed that about 90 per cent of their sales were picked up by customers from several collection points in St Petersburg and Moscow.
He noted that cash accounted for about 66 per cent of the payments, while cards made up 25 per cent. The rest were paid for using electronic wallets.
Payment processors observed that the share of electronic wallets as a mode of payment has been growing.
Digital River senior vice president Souheil Badran said: “Cash is still king in Russia but you’re starting to see more payment types like QIWI and Yandex.”
Digital River is a firm that sets up payment systems on websites.
Meanwhile, WorldPay’s senior vice president of e-commerce strategy Ieuan Owen is more bullish, saying that these e-wallets currently account for between a quarter and a third of Russia’s overall e-commerce consumer spend.
“Given the distrust of cards, the rapid rise in the use of these payment methods by consumers and merchants is a key driver of e-commerce growth in Russia,” said Owen.