In a cross-border market that is still growing fast, reaching around $4 billion in 2014 for physical goods, the Russian payment issue is to be considered carefully by foreign online retailers.
So far, not all of them have adapted their approach to the local specificities in the field of payments — which certainly stands as an obstacle to attracting more Russian consumers.
Here are some specificities which should be kept in mind:
- 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. Bank cards and PayPal are widely offered internationally but not widely used in Russia. (While shopping on foreign sites, 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 sites selling a significant fraction of their products to Russia, have all made available one or several localized payment means.
Main Payment Methods in Cross-Border Context
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 over the past two years.
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).
Payment issues in a cross-border context are an analyzed in details in EWDN’s research study on cross-border sales to Russia.