Earlier this week Yandex.Money, a leading Russian virtual currency – in Russian: Yandex.Dengi – announced that its 16 million users can now automatically enjoy a virtual MasterCard debit card, allowing them to make commission-free online purchases worldwide.
Yandex.Money users may use their virtual card like any other debit card, with purchase amount deducted from their Yandex.Money account. Users may also receive money transfers from other bank cards via their virtual card number.
A growing interpenetration
Yandex.Money began integrating its virtual currency with bank cards as early as July 2010, when it made a virtual MasterCard available to its customers for the first time.
In 2011, Yandex.Money customers became eligible to register their existing bank cards. Online purchases could be made using Yandex.Money – an arrangement similar to the one PayPal offers its users.
Yandex went even further in February 2012, when it enabled fund transfers from Yandex.Dengi accounts to any bank accounts with a Visa or MasterCard card.
A few months later, Yandex.Money offered its users the possibility to obtain a physical MasterCard card. Tied to their Yandex.Money account, this three-year debit card allowed them to make online and offline payments using funds from Yandex.Money. In addition, authenticated Yandex.Money users could withdraw cash from ATMs.
Since March 2013, Yandex.Money users have been able to replenish their virtual currency accounts using bank cards issued by Russian banks. To add funds to a virtual account, they only need to indicate their bank card information on the Yandex.Money website and enter a code received by SMS.
The Russian e-payment battlefield
Yandex.Money’s moves appear to be an answer to the Visa QIWI Wallet, which was introduced in late 2012 by Russian payment giant Qiwi. This digital wallet allows its users to access a wide variety of electronic payment options worldwide with a stored value account based on a Visa prepaid card that can be issued by any Visa client-bank.
Virtual currencies have been developing quickly in Russia over the last few years. The market is dominated by three big domestic operators: Yandex.Money, Qiwi, WebMoney. Other currencies are far behind in quantitative terms, according to a recent study on Russian e-commerce by East-West Digital News.
International virtual currency PayPal launched on the domestic market in September of last year.
Russian consultancy J’son & Partners has estimated the transaction volume of electronic currencies at more than 400 billion rubles in 2013 – over $12 billion, up 40% from 2012.
- RUSSIAN E-COMMERCE AND PAYMENTS REPORTS – EWDN has published an in-depth research on Russia’s e-commerce and e-payment industries in partnership with leading universities and consultancies. To receive free insights or to order the full version, please contact us at [email protected].
