Russia, once a superpower of the world has certainly lost its past glory but is still one of the largest economies of the world. It is also a hotbed for technological innovations and business growth. Recently, a new phenomenon has been witnessed in Russia, i.e. Cashless Economy. According to Russia Today (RT) news citing the Boston Consulting Group (BCG) report, the growth rate of the cashless economy is 30 folds from 2010 to 2018.
BCG claims that as a whole the cashless economy of the European market will grow at 5.9% till 2028. Eastern Europe will grow faster at 7.4% as compared to Western Europe. Interestingly, the developed economies of Western Europe that are often pillars of the European economy are late to the cashless economy party.
RT also reported that the number of transactions per person in Russian grew from just a mere 5.8 to a whopping 172 during the 2010 to 2018 period. The growth is the result of mainly three factors according to BCG:
- Cheap retail finance
- High market concentration
- Huge investment in technology
When it comes to the cashless economies, China and India have set examples for the world. China, with the help of its tech giants such as Alibaba – Alipay and Tencent – WechatPay are some of the world’s largest digital payments platforms. India started its digital payments platform a couple of years back under the aegis of National Payments Corporation of India (NPCI) and created the Unified Payments Interface (UPI) that is now used by all the digital payments platforms in India. This is one of the smoothest interfaces in the world and the growth rate is just phenomenal with billions of transactions.
BCG believes that Russian consumers managed to leapfrog the traditional development of payment systems, as the country is also Europe’s largest market for e-wallet transactions and the global leader for secured tokenized transactions. It should also be considered that in the times of high cybersecurity risks all over the globe, how secure are the online transactions as more and more people are coming online by the day. The global economies are coming online gradually and so the need for a more secure online environment in every sense.