Translation. Region: Russian Federation –
Source: Central Bank of Russia
An important disclaimer is at the bottom of this article.
There's enough room for all payment instruments in Russia.
Russia's digital financial infrastructure is developing rapidly, and market interest in implementing innovative solutions remains high, with the number of payment instruments constantly growing. Alla Bakina, Director of the Bank of Russia's National Payment System Department, spoke to TASS about this, whether an alternative to the Mir payment system will soon appear in Russia, and how the NSPK might be privatized.
– Alla Stanislavovna, in September the Central Bank published an advisory report on the National Digital Infrastructure (NCI). Has the regulator already received feedback from market participants?
"We've already received a lot of feedback. Market participants have asked for more time to provide feedback and are still sending us comments and suggestions. So, we're still processing the information and will definitely share the results when the time is right."
The document covers significantly more than just the payments agenda. It addresses the national digital infrastructure as a whole, including payments and other components such as data exchange and identification. All of these are interconnected. We outlined our vision for these three components and decided to discuss it with the market to align our views.
In this report, the Bank of Russia began discussing options for the future of the NSPK with market participants. Which option is the regulator ultimately leaning toward?
The National Payment Card System (NSPK) was created over 10 years ago, when international payment systems dominated our market. They held 98.5% of the market, essentially the entire market. To ensure the sovereignty of our payments space, it was essential to create a Russian operator. The NSPK became this operator. Furthermore, it was subsequently entrusted with the functions of the operations and clearing center for one of the Bank of Russia's services, the Faster Payments System. Throughout this time, it was crucial for us to maintain complete control over the NSPK, as every component of it was critical to the entire national infrastructure. Now the market structure has changed, and we are ready to discuss with its representatives the possibility of their participation in the management and development of the National Payment Card System's services.
Of course, critical infrastructure elements essential for the uninterrupted and independent nature of payments must remain under the control of the Bank of Russia. We are discussing the possibility of transferring product and service components to the market, where this will be most effective. We are prepared to engage in dialogue with the market; some options are presented in our report, but we are also open to considering other scenarios. Based on the discussions, we will plan our next steps.
It's difficult to discuss timelines yet. Neither Russian nor international practice has seen any instances of the transfer of national infrastructure components from the state to market participants. This will impact the entire payments market, so it's important to thoroughly discuss all aspects in advance, including the form of transfer and the consequences. This must be done on transparent terms for all market participants. This is our fundamental position. Furthermore, the equal accessibility of the national payment infrastructure with non-discriminatory terms must be maintained.
The Central Bank noted that it allows for the possibility of privatizing other elements of the digital infrastructure. What is this all about?
The NSPK report cites it as one of the elements of the National Digital Infrastructure for assessing this feasibility. Regarding the other elements, we are currently awaiting market input. We also proposed discussing with the market the criteria by which decisions will be made on the regulator's participation in creating components of the financial market's digital infrastructure. This doesn't mean a "sale is open."
In our opinion, it's more appropriate, more practical, and more systematic for the state to create infrastructure components for critically important criteria. If the market can independently ensure these conditions and criteria, then there's nothing wrong with having the market do so.
In its report, the regulator cites the inability of participants to agree on equitable access to infrastructure as a risk. What conclusions did the Central Bank draw from the QR code payment issue, when not all market participants were willing to take this path?
The universal QR code isn't the only example where reaching an agreement was difficult, not with the market as a whole, but with individual players. And we've gone through those stages. Today, the payments industry faces a huge number of challenges, including its transformation, sanctions, and the fight against fraud. There's simply no time to sort things out. Finding a balance between the interests of all players, listening to and accepting not only one's own point of view, is challenging, but we, for our part, are trying to create the conditions for such dialogue. For this purpose, among other things, we have created the NSPK Participants and Users Council, where a wide range of NSPK development issues are discussed.
Another platform is the Advisory Council for the Development of Payment and Settlement Infrastructure under the Governor of the Bank of Russia. Here, all arguments for and against any decisions or proposals can be voiced. This council includes executive authorities, various associations, parliamentary representatives, and market participants. A working group is currently being formed to develop initiatives for the development of the NCI. This was, among other things, a request from market participants.
Market participants have once again begun discussing the creation of yet another competitor to the NSPK, as announced at Finopolis in October. Are these any substantive discussions yet?
"So far, no one has had such a substantive discussion with us as the regulator. There's been talk for years about creating an alternative to the Mir payment system, but nothing has been done. It's important to understand that the NSPK isn't the only payment system operating in the market. Yes, it's a national infrastructure, but it's not the only one. We currently have 28 payment systems in our registry. We don't prohibit anyone from operating in this market under the same rules. That's what competition is. And if there's a need and desire to create a new payment system, go ahead and register it."
It is important for the regulator that it operates in accordance with legal requirements, that its rules and objectives are clear, and that all participants, not just large banks, can join this payment system on equal terms.
When creating a payment system, the economic aspect is important. Does the market need a second national payment card infrastructure? If we compete at the infrastructure level (if the word "competition" is appropriate here), we must understand that the costs will be colossal. I hope market participants also understand and appreciate this. But if we're talking about different payment systems in terms of product and service offerings, it's important that there aren't just many of them, but that they be diverse and interoperable.
After all, people don't care about the sign; they care about being able to pay anywhere, in any store, using a convenient method. It's no wonder the entire market, including the largest players, say that the key element around which development strategies are built today is people. One of the most popular terms right now is "human-centricity."
We're open to discussion. We have a registration procedure for payment systems, legal requirements for them, and a system for overseeing their activities. When market participants decide to do so, they're welcome!
– The Central Bank identified a decline in market participants' motivation to create innovative solutions as one of the risks to the national digital infrastructure. Are there any signs of this among Russian market participants, or does the "thirst for innovation" remain high?
"If we look at the payments market alone, we certainly can't talk about a decline in motivation. We see that players' interest in implementing and developing innovative solutions remains high. This is evident in our everyday lives. Just think how rare a QR code was just five years ago, but now it's almost ubiquitous. Biometrics is rapidly developing. Major banks are entering the market with pay services, one after another."
But there's another side to the coin: anything new carries risks for those implementing it. Many hypotheses are tested in practice, because until you try something, you won't know whether it will work. Furthermore, this is a capital-intensive activity that requires significant expenditure. But with implementation and use, the effect is achieved over the medium term. This is, in fact, the reason all these innovations are being pursued. To summarize, the main reason market participants innovate is, of course, competition for customers. And the Bank of Russia, as a regulator, places particular emphasis on competition on fair and equal terms.
– So, the more players there are in this market, the better?
Yes, it's important to have multiple players. They can vary in size, tools and services, and scope of activity. This is one of the reasons why a new player will emerge in this market – non-bank payment service providers (NBPs). Such companies are widely represented abroad; they are called PSPs (Payment Service Providers). They are not banks. These are participants who will only have a payment license, or what we call a "light" payment license. At the same time, they, like banks, must comply with information security requirements, Federal Law No. 115, management requirements, qualifications, capital requirements, and so on. But the scope of these requirements is proportional to the scale of their operations, because the risks are different.
We expect that the legal framework for this institution will be in place soon—in the first half of 2026. Fintechs and other companies are showing great interest in this type of activity. We hope that the emergence of such participants will increase the accessibility of financial services and expand the range of innovative payment services. This will all stimulate competition and further market development.
– Are you concerned that the new player, the NPPU, might have some weaknesses, for example, in terms of cybersecurity, etc.?
"Here, all participants must follow uniform rules. As I've already mentioned, NPPUs will also be required to comply with information security requirements, which are established at the regulatory level. You can't enter the market and ignore them. All participants in our financial market are equal in these matters, regardless of their status, scale, size, and type of activity. Those who fail to comply will be subject to supervisory measures, including deprivation of the right to engage in their activities."
– How will the emergence of new market participants change the landscape of cashless payments?
New players will be able to introduce a more diverse range of payment services to the market more quickly. Currently, there are fintechs and other market participants offering solutions, but they can only do so through banks, being somewhat dependent on them. If a bank is interested in a fintech's solution, it will promote it. If not, the fintech will wait in line or look for a bank willing and able to work with it. The NPPU will have the opportunity to offer its solutions directly, without intermediaries.
– It turns out that the NPPU will take a piece of the pie from the banks?
"More likely, they'll engage in healthy competition. This doesn't mean they can't cooperate. Cooperation between banks and NPPUs will enable the creation of various solutions, including cross-border services. This is also a very useful approach."
– How is supervision of the NPU envisaged – through self-regulatory organizations (SROs)?
"In the initial stage, they will still be under our direct supervision. Yes, the SRO model works well in the financial market, but we need to understand how it will translate into the payments segment. We need to gain experience. We registered our first SRO in this sector quite recently, in early October of this year. As a reminder, this is an SRO for payment agents—companies through which citizens can pay for certain services, such as housing and communal services, mobile phone service, and so on.
Are there any applications from market participants wishing to be included in the NPU register? What kind of organizations are these? How many are there?
There's a lot of interest. Off the top of my head, we're in touch with several dozen organizations that would like to obtain this status. Besides fintechs, these include e-commerce companies, telecommunications companies, non-credit financial institutions, insurance companies, and others. But first, it's important to establish a legal framework for the full operation of the NPPU institution.
– Let's move on to cashless payments. What does the current market landscape look like, and how does the regulator see it in the medium term, say, by 2030?
The balance of payment methods is changing, and certain trends can be identified. This is primarily influenced by the payment behavior of individuals and businesses, which is shaped by the instruments offered by banks and other market participants.
For example, by the end of the third quarter, the share of payments using QR codes, biometrics, and other non-card payment instruments in total cashless payments amounted to over 14%. This is down from just a few percent recently. We expect this share to exceed 20-25% by 2030. This will be driven by the wider use of the digital ruble starting in September 2026. We estimate that within seven years, the digital ruble could account for up to 5% of payment volume. The potential emergence of other payment methods, such as those using AI—including various digital assistants and augmented reality—could also have a significant impact.
The balance of various non-cash payment methods will continue to change. It's already clear that the growth rate of card transactions is slowing. Comparing the figures for the third quarters of this year and last year, the decline was 3% and 6% in terms of number and volume, respectively. Nevertheless, there's room for all payment instruments. Our country is large, and everyone has their own preferences. Our goal is to ensure the range of instruments is diverse and meets the needs of different people.
It's clear that the share of cashless payments will continue to grow. It's already very high, so achieving each additional percentage point requires significant effort. In the first nine months of 2025, the share of cashless payments was 87.8%. These are huge numbers. In 2013–2014, it was less than 20%. We've made a colossal leap in just 10 years. I believe we'll exceed 90% by 2030.
– In your opinion, will cash and physical cards still be in demand by 2030?
Yes, there are people who prefer cash, and that's perfectly fine. Again, we offer a variety of tools, and people make their own choices. I think physical bank cards will remain, too. But there are already people who prefer virtual and tokenized cards, such as rings, bracelets, stickers, and so on.
– Which non-cash payment method do you see as the most popular in the medium term?
"I think it's QR codes and biometrics. The popularity of any given tool depends on the level of trust in it. Remember how few people trusted cards at first? As people gain increasing trust in biometrics, its use in the payment sector will expand. We're seeing the first steps now, although they're quite confident. Biometrics are already being used in transportation—and not just in Moscow. According to our data, several million people now regularly use biometrics, and up to 20 million payments are processed through bioacquiring monthly. This may not be significant on the scale of all cashless transactions, but it's still millions."
Banks and retailers play a major role in promoting biometrics, developing the infrastructure to accept payments this way. In Moscow and other major cities, many stores offer customers multiple payment options, including biometrics. Reliable protection of biometric data is crucial for trust. It is stored in the Unified Biometric System, a state-owned system. It is subject to the highest data protection standards and secure interactions.
– In terms of specific tools, how is the cross-border payments segment using QR codes developing?
"Essentially, the same principle applies here as with any other QR code payment. But to be able to pay by QR code abroad, it's important that QR systems in different countries be able to exchange payment information with banks. In other words, information exchange must be established. For obvious reasons, I can't name the countries and participants, but I can say that the work is ongoing and the number of participants is constantly growing."
Our banks and international partners are showing strong interest. QR codes are gaining popularity not only in our country, but also globally, especially in the Southeast Asian region. And, of course, many countries are interested in making it easier for tourists to pay for goods and services. QR codes are ideal for this. We're seeing the volume and number of transactions using them grow. We're talking hundreds of thousands of transactions.
– And from a security standpoint, since the transactions are carried out in a foreign country, can we say that it is safe, perhaps even safer than with cards?
"Yes, it's certainly safe; the standards are quite high. QR system operators operate within their own framework, adhering to all requirements for both data storage and transmission."
Another specific tool is the Faster Payments System. How will it develop further?
In January 2026, the Fast Payment System (FPS) will be seven years old. By international standards, this is very young, but in just seven years, the system has become the most popular payment service in our market. It is used by nearly 100 million people, representing virtually the entire economically active population of Russia. More than 200 banks and over 3 million legal entities and sole proprietors are members of the FPS.
In the first nine months of this year, more than 13 billion transactions worth almost 75 trillion rubles were processed through the Fast Payment System (FPS) across all services. This is a colossal volume, an increase of 50% compared to the previous period. And we continue to grow. People conduct the majority of their transfers through the FPS. The use of the FPS is also rapidly expanding for QR code payments, online payments, and government transactions, among other things. However, our goal is not to increase the FPS's turnover; it is important to us that people and businesses have a convenient, accessible, and secure tool. This also means lower costs for businesses, which is especially important.
We continue to develop additional features together with our participants. Our immediate plans include implementing a feature for replenishing your account with cash via any bank ATM. We also plan to expand online payment options for businesses. You've probably already heard about QR-presented payment methods—users generate their own QR code for payment and present it at the checkout, rather than scanning a store-generated one, as is currently the case. We plan to implement this feature soon.
Importantly, the Faster Payments System (FPS), in addition to payment functionality, is also being used to develop other services that ultimately result in payments. For example, a service for businesses that handles invoicing and payment. This speeds up settlements between companies and eliminates the need for paperwork. We believe that the Faster Payments System will continue to grow in the medium and even long term.
– Are there any payment instruments that haven't yet entered the Russian market but have great potential?
"It's not about the new tool itself and its implementation. We constantly monitor emerging global trends. The question isn't that we need something that doesn't yet exist. Rather, it's that each tool needs its own niche. For example, where a card or biometrics are good, AI assistants with payment functionality might be out of place."
Probably, any solution that exists in other countries is being researched, tested, or evaluated in our country. But I repeat – everything has its time, place, and need. Take, for example, the digital ruble. Few countries in the world are as prepared to work with a central bank digital currency as we are. We are a leader, and our digital national currency has great potential. Together with market participants, we are exploring and identifying areas where the digital ruble's potential could be best utilized. First and foremost, these are smart contracts. Secondly, budget payments, and thirdly, cross-border mechanisms.
– A somewhat provocative question. Are there any particularly successful cases that didn't work out?
There's no basis for saying there are examples of unsuccessful tools. Digitalization, in principle, leads to the gradual replacement of some tools with others. It's important for us to have a wide range of different tools and technologies that best address the needs and challenges of a given area or scenario. And using various metrics, we can assess how satisfied consumers and the market are with this.
The Key Development Directions for the National Payment System until 2027 define the level of payment service consumer satisfaction and the digitalization index of the national payment system as new KPIs. We have already approved the methodologies for calculating them. Starting next year, we will conduct measurements. We will assess customer satisfaction using various metrics, including the composition, range, and use of non-cash instruments, and how well these meet their needs and expectations.
It's important for us to see how these indicators change over time. Based on the results, we'll understand where to go next, where adjustments are needed, and where, perhaps, regulatory changes are needed. We'll definitely share the results. The data will be publicly available on our website. We plan to publish the indices for the first time in mid-2026.
Rita Shpilevskaya, TASS
Please note: This information is raw content obtained directly from the source. It represents an accurate account of the source's assertions and does not necessarily reflect the position of MIL-OSI or its clients.