With the recent election controversy, Russia is facing challenges on every front. General dissatisfaction with the country’s political scene and its prime minister, Vladimir Putin, in particular has resulted in people taking to the streets in scenes not dissimilar to those last seen during the Soviet era. But while there’s talk of a resurrection of Soviet-style politics, Russia is positioning itself at the cutting edge of payments technology with contactless and NFC projects gaining traction.

Categorised as one of the most exciting emerging economies, Russia stands out from its BRIC (Brazil, Russia, India, China) counterparts. It has a population with an average age of 38.7, compared with India’s 26.2 and Brazil’s 29.3, so it is not the most youthful of economies. As a former super power that is being revitalized, its telecoms infrastructure is similar to that of other emerging nations. Access to digital lines is improving and it has made the progress needed to help the country transform to a market economy. Back in 1998, the nation had fewer than 1 million cell phone subscribers, but by 2010 this figure had surged to 238 million. It also has almost 45 million fixed line telephone connections.

The growth in digital technologies has helped the country position itself to embrace NFC and mobile payments. MasterCard’s ‘Tech Nation’ survey, conducted by Ipsos MORI in eight countries across Europe during 2011, revealed that Russia and Turkey topped the table of tech savvy countries. In fact, 31% of the Russian population and 13% of the Turkish currently use cell payment technologies, well above UK’s 6%. It also highlighted that more people in Russia (12%) and Turkey (10%) had adopted contactless than anywhere else worldwide. Another key finding was that the two countries have the greatest consumer uptake of cell and contactless payment technologies. But Russia use of e-commerce payments lags behind that of the other countries surveyed with fewer than 50% of the population using it.

Highlighting how Russia has taken the technology leap to the latest payments technology, the survey revealed that only 4% still use checks compared with 75% in France. Adoption of cell payment technologies is highest in Russia (31%), and the most frequent users of contactless are consumers in Russia (44%), the Netherlands (47%) and Germany (44%).

Last year saw the country make further significant progress with NFC and contactless. In the payments sector BPC Banking Technologies and Alfa-Bank announced that they had teamed up to complete the first certified Visa PayWave launch in the country. Alfa-Bank operates around 200 branches across Russia and is distributing contactless PayWave Visa cards to enable customers to make low-value contactless payments at the point of sale.

Its number one mobile operator, MTS, captured the headlines in November with a ground-breaking payments scheme using Nokia 6131 handsets. The rollout enables consumers to use their handsets to make payments at gasoline pumps operated by Lukoil in the city of Perm, near the Ural mountains. The system is based on NFC bridge technology using SIMs that are connected to antennas that can be wrapped around the batteries in the handset.

The country is also making waves in the transportation sector. Moscow hosted the trial of a transit ticketing scheme involving MNOs MegaFon, MTS and Vimpelcom. An estimated 200 participants – mainly employees of Aeroexpress – used Nokia 6212 handsets to purchase Aeroexpress airport shuttle tickets via smart posters. The system involved a range of form factors including stickers, NFC chips with flexible antennas and NFC handsets.

Keen to get in on the act, the country’s second largest city, St Petersburg, has also been rolling out contactless schemes. It is deploying Ambiq Technology’s solutions to enable passengers to use their cell phones to buy tickets for public transport. The system uses secure element (SE) NFC devices embedded in cell phone handsets, and is compatible with existing Metro turnstiles and ground transport readers.

The city has chosen NXP Semiconductor’s MIFARE Plus contactless IC to power its Podorozhnik unified contactless fare card with integrated eWallet. This consolidates all of its transit cards into one pass, which can be used across the city’s public transportation network. It supports future integration of additional stakeholders such as operators of suburban trains, road toll systems, parking lots and water transport. The card was piloted in St Petersburg in January 2011 and mass roll-out began in May 2011.


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