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State Banks Eye Russia's $740Bln Plastic Card Market

Published: April 4, 2014 (Issue # 1804)



  • Sberbank's offer to create a national payment system was not supported by the Central Bank.
    Photo: Ekaterina Kuzmina / For Vedomosti

As top government officials speed up the birth of a national credit card system in an asymmetrical response to U.S. sanctions over Russia's incorporation of Crimea, major state banks are eyeing their share in the multi-billion dollar financial transactions market.

President Vladimir Putin has supported German Gref, the CEO of Russia's largest lender Sberbank, who offered to create a national payment system based on the existing Universal Electronic Card, or UEC.

Putin ordered the prime minister to review all the possibilities of using the UEC, followed by a corresponding decree of the Cabinet to the key ministries. Officials are to report of the results of their evaluations by mid-April, Kommersant reported Thursday.

The UEC started to be issued to Russian citizens beginning from 2013 and initially was meant to replace the existing internal passport. Besides carrying all the necessary personal data, it is possible to make payments with the card as with a regular plastic. About 300,000 of these cards, powered by Sberbank's PRO100 payment system, have been issued so far and they are accepted by most cash machines and acquiring terminals across the country.

Top government officials have repeatedly said the national payment system was a must-have as a necessary means of security against sudden malfunctions of international payment systems.

At the end of March, Visa and MasterCard stopped providing services for payment transactions for the clients of Bank Rossiya and SMP bank, co-owned by brothers Boris and Arkady Rotenberg, allegedly Putin's close allies. The taken measure was reportedly part of U.S. sanctions against the Russian annexation of Crimea.

"National payment systems exist in many countries and Russia should think of one as well," said German Gref following the incident, adding that Sberbank has own system that is up to the task. He said the system could be applied across the country within several months after adjusting legislation.

Currently, Visa and MasterCard take up, respectively, 60 and 35 percent of Russia's credit card market, which according to the Central Bank saw almost 26 trillion rubles ($740 billion) worth of transactions in 2013.

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ALL ABOUT TOWN

Wednesday, Oct. 22


English teachers can expect to receive a few useful pointers today from Evgeny Kalashnikov, the British Council regional teacher, during the EFL Seminar this afternoon hosted by the British Book Center. The topic of today’s seminar is “Grammar Practice.”


Young Petersburgers will get the chance to jumpstart their careers at “Professional Growth,” a job fair and forum featuring more than 40 major Russian and international companies vying for potential candidates for future positions. The forum not only is a chance to network but also to learn more about the modern business world and to understand what it takes to get the job you want.



Thursday, Oct. 23


AmCham’s Public Relations Committee meeting is scheduled to meet this morning at 9 a.m. in their office in the New St. Isaac Office Center.


Sportsmen get their chance to stock up on all kinds of gear at the Hunting and Fishing 2014 exhibition starting today at Lenexpo. Everything from rods and reels to boats, motorcycles and equipment for underwater hunting will be on sale so that any avid outdoorsman can always be prepared.



Friday, Oct. 24


SPIBA’s ongoing “Breakfast with the Director” series continues today, featuring Tomas Hajek, Managing Director of the Northwest Division at Danone Russia. Hajek will be discussing collaborations between businesses from different cultures. The meeting is at 9 a.m. at the Domina Prestige St. Petersburg hotel and all who wish to attend must confirm their participation by Oct. 23.


Get your gong on at “Sounds of the Universe,” a concert at the city planetarium this evening incorporating six different gongs to create relaxing songs that will transport you upwards into the stratosphere. Tickets are 700 rubles ($17).



Saturday, Oct. 25


AVA Expo, the eighth edition of the event revolving around all things pop culture, returns to Lenexpo this weekend. Geeks, nerds, dweebs and dorks will have their chance to talk science fiction and explore a variety of international pop culture. Tickets for the event can be purchased on their website at avaexpo.ru.



Sunday, Oct. 26


Zenit St. Petersburg returns home for the first time in nearly a month as they host Mordovia Saransk in a Russian Premier League game. Currently at the top of the league thanks to their undefeated start to the season, the northern club hopes to extend the gap between them and second-place CSKA Moscow and win the title for the first time in three years. Tickets are available at the stadium box office or on the club’s website.



Monday, Oct. 27


Today marks the end of the art exhibit “Neophobia” at the Erarta Museum. Artists Alexey Semichov and Andrei Kuzmin took a neo-modernist approach to represent the array of fears that are ever-present throughout our lives. Tickets are 200 rubles ($4.90).



Tuesday, Oct. 28


The Domina Prestige St. Petersburg hotel plays host to SPIBA’s Marketing and Communications Committee’s round table discussion on “Government Relations Practices in Russia” this morning. The discussion starts at 9:30 a.m. and participation must be confirmed by Oct. 24.



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