Russia's Non-Cash Payment Revolution: Central Bank Forecasts Growth to 92%
In a significant shift in payment trends, the Central Bank of Russia has reported that the share of non-cash payments in retail turnover reached a record 85% in the first half of 2024. This figure is expected to rise to between 86% and 87% by year-end, with projections suggesting it could reach as high as 92% within the next two years. First Deputy Chairman of the Central Bank, Olga Skorobogatova, highlighted this trend during her address at the Finopolis-2024 forum, emphasizing that Russia is on track to match the levels of world leaders in non-cash payments.
The surge in non-cash transactions is a remarkable transformation from 2013, when only about 13.5% of retail transactions were cashless. This figure has grown exponentially, with 25% in 2014, 50% in 2018, and 83.4% by the end of 2023. Experts from the Boston Consulting Group (BCG) dubbed this rapid transition the 'Russian miracle,' noting that Russia has significantly closed the gap with countries previously leading in card transactions per capita. The COVID-19 pandemic further accelerated this trend, as many consumers turned to digital payments for hygiene reasons.
Analysts attribute the growth in non-cash payments to several factors, including the rise of Internet banking, online trading, and the introduction of innovative payment solutions. Oleg Kalmanovich, chief analyst at Neomarkets, noted that online purchases are predominantly made via bank transfers, which are often incentivized through loyalty programs. Additionally, the development of domestic payment systems in response to Western sanctions has spurred further adoption of cashless transactions.
The Digital Ruble: A New Era of Payments
The Central Bank is also preparing for the mass introduction of the digital ruble, expected to begin in July 2025. This new form of currency aims to enhance the payment infrastructure and increase competition in the financial market. The digital ruble will function alongside cash and non-cash payments, providing users with a unique code stored in an electronic wallet. This initiative is anticipated to further boost the share of non-cash transactions, potentially reaching 90-93% by 2027.
Despite the rapid growth of digital payments, experts caution against the complete disappearance of cash. Georgy Kornilov from Goznak asserted that while the use of banknotes may decline, they will continue to serve as a vital means of accumulation. Surveys indicate that many Russians see no reason to return to cash, with over half believing that cashless payments will dominate in 20 years. However, some analysts, including Natalia Milchakova, argue that cash will remain necessary in certain situations, particularly for those who may struggle with technology or face connectivity issues.
Overall, the trajectory of non-cash payments in Russia reflects a broader global trend towards digital finance, with significant implications for the economy, consumer behavior, and the future of currency.
