Payment methods: how to adapt to the Russian e-market?

Payment methods: how to adapt to the Russian e-market?

[quote]Christophe Bourbier, Chairman of Limonetik[/quote] 

Russia: thirty million on-line buyers for an e-commerce market worth $16 billion in 2013. The country already constitutes a real Eldorado for the world’s e-traders, and further growth is envisaged. In a study performed by East West Digital news survey, experts on global e-commerce predict an increase in market value to $36 billion in 2015 and then $72 billion by 2020. But in order to conquer this impressive market, traders must adapt to local preferences.

Beyond the obvious measures of translating one’s website into Russian, respecting legislation and addressing logistical and currency related issues, it is important to adapt to Russian payment practices. Cash payments remain highly popular in the country of Vladimir Putin. This is equally true for e-commerce where cash on delivery or payment via physical terminals are common amongst Russian Internet users.

The e-wallet is the most used alternative payment in Russia

Alternative payment methods, in particular e-wallets, virtual currencies and bank transfers, have demonstrated a strong growth in the last few years. It is the e-wallet, which comes first as the alternative payments the most used by Russians.

This emerging market is shared principally between Yandex, WebMoney and Qiwi. Qiwi has the particularity of offering two possibilities to settle online payments: by an e-wallet or by cash. Meanwhile, the most powerful search engine in Russia, Yandex, has created its own e-wallet solution. Available on more than 20 000 Russian retail websites, the Yandex e-wallet is used by no less than 15% of Russian Internet users to settle their purchases. However, it is Webmoney who have the most users: a total of 14 million. The Russian web-customer has a total of 4 different types of connections with which to affect payments.

Some companies have understood the interest in adapting themselves to the Russian market. A good example is Ingenico, the world leader of integrated payment solutions. Ingenco aims to benefit from the development of the Russian market by getting a little closer to their local clients. It was announced in July that they were starting the production of payment terminals, based upon the Telium 2 platform, within a Russian factory.

An e-commerce company not proposing the methods of payment evoked in this article to its Russian customers would risk letting a large part of the market slip through its fingers.