3. Acceptance Networks
This chapter examines card acquiring, POS acceptance and ATM acceptance across Russia and the Eurasian region, reviewing selected comparative POS terminal and ATM statistics from an acquirer perspective.
National central bank statistics are the primary source for the Eurasian states, supplemented in respect of Russian figures by the BIS.
In addition, the models of merchant service charges and the domestic interchange fee arrangements applied are highlighted in this section.
3.1 Acquirer Infrastructure in Eurasia
Most Eurasian banks consider both acquiring and card issuing as a core bank business. Many banks issuing cards also have an acquirer licence granted by the card schemes. They run their acquirer operations in-house or use the services of third-party acquirer processors.
Acquirers tend to sign multi-brand contracts with merchants for card acceptance at POS terminals, MPOS terminals and unattended vending machines. Also, most acquirers accept card payments on the internet. In most Eurasian countries, POS terminal rental and maintenance services are part of the acquirer service portfolio offered. Only large retailers and petrol companies buy POS terminals and may have their own POS terminal network hub infrastructures.
POS Network Processors – Additionally, there are POS terminal concentrator hubs in some Eurasian countries operated by independent terminal service providers. These POS terminal hubs are linked to one or more acquirer and may even have their own access to international gateways allowing for routing and switching of transactions.
Online-Payment Service Processors – Online shops are directly connected by MPI/API interfaces either to the internet payment gateway (IPG) of an acquirer bank processor or to multi-acquirers through an online-payment service processor (PSP). PSPs are specialised technical processors for all kinds of secure online e-/m-payment services. Usually, a PSP act as an agent for more than one card acquirer. Some also offer, VPSP platform services to bank acquirers who want to take advantage of a kind of ‘internet network processor’, e.g. for cross-border acquiring.
MPOS Terminals – these are the latest challenge in the Eurasian acquiring business. Small and mobile merchants (i.e. no fixed outlet) have started to use their smartphones and tablet PCs as mini-POS+ECR devices with added chip reader dongles. From 2012, many Square clones like Zettle, SumUp, and Jusp – and leading POS terminals vendors such as VeriFone and Ingenico – along with various others have launched their MPOS terminal services in Europe. Mobile and small merchants in Eurasia are likely to demand MPOS terminals in the future. Further, merchants can initiate MOTO-like card payments on their smartphones and tablets by downloading a payment app.
SmartPOS Terminals – In 2018, POS terminal vendors launched innovative new types of POS terminals. Named SmartPOS terminals, they combine the electronic cash register functionality (ECR) used by merchants in outlets with a contactless POS payment terminal and merchant services in the cloud. For the very first time, the so far separated ECR devices and POS terminals are integrated in just one checkout solution device. From late 2018, SmartPOS terminal vendors like Castles, Clover, Ingenico, Justtide, Handpoint, PAX, Poynt, Verifone, Worldline, and others have launched their SmartPOS devices and services in Europe. It is believed that Eurasian SME merchants will embrace SmartPOS terminals.
For more details on acquiring infrastructures please refer to the individual country profiles of the Yearbook.
Interchange Fee Arrangements in Europe
The following interchange fee arrangements are applied in Eurasia:
- International and Intra-Regional Fallback Interchange Fees are set by the members of the international card schemes to be applied in case of cross-border transactions or foreign cards used domestically in a country
- Domestic Merchant Interchange Fee (DMIF) for international card brands in Europe is mostly defined by Mastercard and VISA Europe respectively. Country specific, some DMIF arrangements for international card brands are still defined by the domestic banks themselves
- Domestic Merchant Interchange Fee (DMIF) for domestic debit card brands in Eurasia is usually defined by the domestic banks themselves
Historically, the domestic interchange fee (DMIF) arrangements have varied by market:
- In many markets, multi-lateral DMIF arrangements have been based on proportional ad valorem rates (i.e. a percentage of payment value) by card product, sometimes combined with an additional transaction fee
- In some markets, multi-lateral DMIF arrangements for domestic debit cards are based on a transaction fee only
- In a few markets, bi-lateral DMIF arrangements for domestic cards are applied which can be negotiated, based on transaction volumes or by amount values
- The bilateral DMIF arrangement for domestic cards is built to cover, transparently, three distinct elements: a fixed fee to cover processing costs, a proportional element to cover the investment in collective security measures, and a proportional element to cover the payment guarantee based on a variable scale depending on fraud rates for cards issued by the issuing bank.
As in the US, Australia, EU 27 and other foreign countries, the multi-lateral interchange fee arrangements of the international and domestic cards schemes are under pressure from the competition authorities which would prefer individually negotiated bilateral interchange fee arrangements between merchants and their acquirers. On the other hand, interchange fee arrangements continue to be seen as the balancing factor between acquirers and issuer banks.
Merchant Service Charges
Depending on card brands and on domestic payment behaviour, Eurasian merchants sign multi-brand acceptance contracts or acceptance contracts by card brand with card acquirers. Through the contracts they sign with their acquirers, merchants undertake to comply with a series of strict security measures which, in return, provide them with access to a secure and universal method of card payment that is guaranteed for the merchant.
In Eurasia, the merchant also pays fees to his acquirer(s). Merchant Service Charge (MSC) fees are risk dependent (e.g., Merchant Category Codes, MCC) and differ by card product. Also, the MSC fee rates are usually volume-dependent by number and/or by value.
The MSC fee for a card payment covers the applied interchange fees and acquirer service fees. Unblended MSC prices are offered in Europe since 2011. MSC fees and commission fees for international cards benefit from stronger acquirer competition.
The lessons learned from the interchange fee regulations in Australia and Europe is that many issuer banks raised the annual card fee for cardholders to compensate losses while the merchant service charge fees declined due to the cap on interchange fees. However, no merchant is known to offer lower prices for goods related to the decline of interchange fees.
ATM Charges for Withdrawals
Historically, the domestic pricing of ATM transactions for cardholders has varied by market:
- In some markets, all or almost all, ATM withdrawals are free irrespective of the machine used
- In some markets, cardholders are charged for using machines other than those of their issuing bank or network
- In other markets, cardholders are charged whatever machine is used, e.g. other than the cardholder’s own bank withdrawals during business hours.
3.2 POS Networks by Country
Section 3.2 examines POS acceptance across Eurasia using comparative tables. Data of the national central banks is the primary source.
It’s important to note that not all the figures relate to POS terminals in retail outlets, as some central banks do not distinguish between retailer and bank branch POS terminals; the latter, also known as ‘cash-in’ terminals or kiosks, enable bill payment by card or cash for mobile phones and utilities and are best regarded as ‘payment terminals’ rather than ‘POS terminals.’
POS Terminals by Number
Over the period from end-2019 to end-2023, the regional POS terminals base rose by 10.25% to 6.54 million, with Russia accounting for 61.92% of the total POS terminal estate. Among individual countries, Kazakhstan, Armenia, and Georgia showed the strongest rates of growth on a five-year basis.
| 3.1 - POS Terminals by Country | |||||||
|---|---|---|---|---|---|---|---|
| Country | 2019 | 2020 | 2021 | 2022 | 2023 | GR 22/23 | CAGR 5Y |
| Armenia | 11,179 | 13,009 | 18,351 | 68,888 | 80,556 | 16.94% | 55.73% |
| Azerbaijan | 67,468 | 57,120 | 60,936 | 79,820 | 86,383 | 8.22% | 5.50% |
| Belarus | 173,233 | 168,927 | 160,265 | 191,078 | 203,002 | 6.24% | 4.78% |
| Georgia | 63,388 | 73,911 | 89,527 | 105,404 | 123,559 | 17.22% | 22.74% |
| Kazakhstan | 170,410 | 211,764 | 509,194 | 831,780 | 1,041,884 | 25.26% | 50.31% |
| Kyrgyz Republic | 11,114 | 12,067 | 13,067 | 13,744 | 20,477 | 48.99% | 15.31% |
| Moldova | 20,517 | 23,727 | 28,463 | 32,318 | 36,709 | 13.59% | 15.09% |
| Russia | 2,913,026 | 3,598,729 | 3,546,869 | 3,809,513 | 4,051,733 | 6.36% | 9.37% |
| Ukraine | 350,213 | 388,958 | 439,160 | 368,432 | 469,571 | 27.45% | 9.57% |
| Uzbekistan | 392,361 | 438,410 | 433,384 | 434,018 | 429,334 | -1.08% | 11.88% |
| Total | 4,172,909 | 4,986,622 | 5,299,216 | 5,934,995 | 6,543,208 | 10.25% | 12.85% |
| Note: figures include POS terminals in bank branches. | |||||||
| Source: national central banks, PCM research. | |||||||
Taking 2023 figures, the country-by-country position can be summarised as follows, to be read with the figures in Table 3.1:
- Armenia – figure includes 596 POS terminals used for cash withdrawals in banks
- Azerbaijan – the decline in POS terminal numbers from 2015 is a result of bank sector consolidation, and a 30.99% increase was recorded in 2022 due to the lingering impact of the pandemic. In 2023, there was an increase of 8.22% in the number of POS terminals.
- Belarus – figures here bring together POS terminals and cash-in terminals. NBRB, the central bank, includes figures for POS terminals in retail outlets with ‘cash-in’ terminals in banks, which enable bill payment by card or cash for mobile phones and utilities. The number of POS terminals in retail outlets is equivalent to 73.06% of the headline figure of 203,002 at end-2023, with an estimated 148,310 installed in “card-accepting outlets” in its annual report, up by 4.55% from 2022.
- Georgia – figure comprises 1,099 POS terminals in banks and 122,460 in retailer outlets
- Kazakhstan – figure comprises 8,114 (about half of the 16,279 reported in 2022) POS terminals in banks and 1,033,770 in retailer outlets, a rise of 26.77% from 2022.
- Kyrgyz Republic – figure includes some ‘cash-in’ terminals
- Moldova – figure includes few ‘cash-in’ terminals
- Russia – figures are for EFTPOS terminals, excluding imprinters
- Ukraine – figure comprises 19,840 in banks and 449,531 in retailer outlets
- Uzbekistan – figure includes POS terminals in bank branches
To summarise, the 2023 figure of 6.54 million POS terminals includes around 70,000 POS terminals in bank branches or cash-in machines identified in Eurasian Central Bank statistics. This almost certainly understates the total figure as POS terminals in the Eurasian region.
In many Eurasian countries, POS terminals are also used in bank branches for cash-in payment, cash-advances on cards and utility and bill payments on cards.
Fuller analysis of the split between retailer and bank POS terminals, where available, can be found in the individual country profiles.
POS Terminal Density
In the case of POS terminals per million inhabitants, the Eurasian figure was 23,259.9 compared with 47,601.1 in the EU Member States in 2023. In absolute terms, Eurasia continues to catch up to the EU in terms of its POS estate, with the gap now falling to fewer than 24,341 terminals per million capita, compared to around 11,147 in 2019.
Figures for POS terminals per 1 million inhabitants illustrate the gulf on average in levels of card market development between Eurasia and Europe. However, a comparison of Eurasia with the least developed European countries is also instructive. Germany reported the lowest density of POS terminals, with 13,394.2 terminals per million inhabitants in 2023. This compared with 22,171.5 for Belarus and 27,723.0 for Russia.
In 2023, the average terminals per million inhabitants in Eurasia rose by 9.86% over 2022, in contrast to a growth rate of 11.37% in the EU27 area.
| 3.2 - POS Terminals per 1m Capita | |||||||
|---|---|---|---|---|---|---|---|
| Country | 2019 | 2020 | 2021 | 2022 | 2023 | GR 22/23 | CAGR 5Y |
| Armenia | 3,773.5 | 4,392.7 | 6,195.3 | 23,201.6 | 26,933.7 | 16.09% | 55.50% |
| Azerbaijan | 6,701.8 | 5,644.8 | 5,999.8 | 7,881.8 | 8,529.9 | 8.22% | 5.19% |
| Belarus | 18,409.0 | 18,067.7 | 17,315.6 | 20,768.0 | 22,171.5 | 6.76% | 5.40% |
| Georgia | 17,054.0 | 19,822.7 | 24,271.3 | 28,210.0 | 33,443.1 | 18.55% | 22.94% |
| Kazakhstan | 9,146.2 | 11,216.6 | 26,628.1 | 42,364.1 | 52,007.0 | 22.76% | 47.77% |
| Kyrgyz Republic | 1,703.7 | 1,818.2 | 1,936.6 | 1,952.9 | 2,859.2 | 46.41% | 12.70% |
| Moldova | 5,804.5 | 6,732.9 | 7,094.5 | 8,020.8 | 9,117.6 | 13.67% | 12.18% |
| Russia | 19,848.2 | 24,571.4 | 24,217.3 | 26,010.6 | 27,723.0 | 6.58% | 9.47% |
| Ukraine | 8,357.8 | 9,352.6 | 10,667.7 | 8,949.6 | 11,406.4 | 27.45% | 10.09% |
| Uzbekistan | 11,572.3 | 12,685.9 | 12,287.2 | 12,047.7 | 11,666.7 | -3.16% | 9.64% |
| # POS Terminals per 1m capita - EA10 total | 15,041.9 | 17,950.0 | 19,042.0 | 21,172.0 | 23,259.9 | 9.86% | 12.48% |
| Note: figures are POS terminals per million capita. | |||||||
| Note: Eurasian EA10 figures exclude Tajikistan and Turkmenistan. | |||||||
| Source: calculated from PCM Yearbooks data. | |||||||
3.3 ATM Networks by Country
Section 3.3 examines ATM acceptance across Eurasia using comparative tables. As with the POS series in the previous section, the national central banks are the primary source.
ATM Terminals by Number
Acceptance networks in Eurasia show much lower levels of development, no longer including Russia. However, in 2023, ATMs per million inhabitants were 706.3 in Eurasia compared with 628.4 for the EU Member States in 2023.
Based on the period between 2019 and 2023, the region’s ATM base is in a consolidation process. It is believed that both the bank sector consolidation in most Eurasian countries, higher card use, and cash-advance services at POS terminals in retail outlets are the main reasons for declining ATM numbers from their peak in 2013.
However, the Kyrgyz Republic and Uzbekistan have shown significant growth rates since 2011. It is believed that the implementation process of card business in both countries is still at an early stage.
Russia, accounting for 57.91% of the ATMs, led the way: between end-2010 and end-2015, the Russian network grew by 34.9%, compared with growth of 23.8% for the region excluding Russia.
Among the other countries of the Eurasian region, only Ukraine has a substantial ATM network. In 2023, Russia and Ukraine together accounted for 72.57% of the region’s ATM base.
| 3.3 - ATMs by Country | |||||||
|---|---|---|---|---|---|---|---|
| Country | 2019 | 2020 | 2021 | 2022 | 2023 | GR 22/23 | CAGR 5Y |
| Armenia | 1,536 | 1,536 | 1,573 | 1,637 | 1,569 | -4.15% | 0.88% |
| Azerbaijan | 2,647 | 2,715 | 2,907 | 3,068 | 3,112 | 1.43% | 4.46% |
| Belarus | 4,294 | 4,387 | 4,345 | 4,247 | 4,165 | -1.93% | -0.40% |
| Georgia | 2,531 | 2,693 | 2,821 | 2,902 | 2,846 | -1.93% | 4.17% |
| Kazakhstan | 11,315 | 12,728 | 12,443 | 12,391 | 12,649 | 2.08% | 2.80% |
| Kyrgyz Republic | 1,712 | 1,856 | 1,910 | 2,041 | 2,260 | 10.73% | 7.38% |
| Moldova | 1,137 | 1,120 | 1,152 | 1,166 | 1,243 | 6.60% | 1.78% |
| Russia | 131,908 | 124,687 | 120,745 | 114,343 | 115,059 | 0.63% | -2.31% |
| Ukraine | 35,930 | 34,756 | 33,618 | 28,279 | 29,140 | 3.04% | -4.45% |
| Uzbekistan | 9,208 | 11,800 | 12,940 | 20,379 | 26,655 | 30.80% | 31.19% |
| Total | 202,218 | 198,278 | 194,454 | 190,453 | 198,698 | 4.33% | 0.16% |
| Source: national central banks, PCM research. | |||||||
Background – Russian banks are competing to extend their ATM services available to their customers, both by installing their own hardware and initiating ATM-sharing agreements with competitors.
Sberbank, with 17,500 ATMs at end-2008, equivalent to 25% of the country’s total at that time, reported 65,600 ATMs and self-service terminals at end-2023.
VTB Bank, which has the second-biggest network, reported 2,124 ATMs at end-2008; by end-2023, the figure had risen to 15,000 ATMs and self-service machines after including the ATM networks of its acquisitions and the merged VTB24 Bank.
Alfa-Bank, Russia’s biggest private bank, reported around 3,800 ATMs and self-service machines at end-2023.
In addition, ATM sharing has become widespread in Russia. The total integrated ATM network available to Alfa-Bank cardholders, taking into account partnerships with Promsvyazbank, MDM Bank, Rosbank and Universal Bank for Development and Partnership, amounted to nearly 20,000 machines in 2,500 communities in Russia.
Russian Standard Bank had an estimated 6,000 ATMs and instant payment terminals by end-2023, up from 1,885 in 2012. The RSB ATM total includes arrangements with B&N Bank which enables RSB cardholders to access an additional 9,400 cash-dispensing ATMs. In 2018, these kinds of ATM agreements gave B&N customers access to a network of more than 15,000 ATMs. No updates for any of these figures were provided in 2023.
ATM Terminal Density
On the ATM side, the gap between Eurasia and Europe is less wide than with POS terminals. Among individual countries, some less developed European countries reported 2023 figures for ATMs per million inhabitants which were well below the best of those reporting from the Eurasian region.
Russia and Georgia headed the list, with 787.3 and 770.3 ATMs per million inhabitants in 2023, respectively. By contrast, the respective figures for Romania and Turkey were 506.9 and 620.0 ATMs per million in 2023.
| 3.4 - ATMs per 1m Capita | |||||||
|---|---|---|---|---|---|---|---|
| Country | 2019 | 2020 | 2021 | 2022 | 2023 | GR 22/23 | CAGR 5Y |
| Armenia | 518.5 | 518.7 | 531.0 | 551.3 | 524.6 | -4.85% | 0.73% |
| Azerbaijan | 262.9 | 268.3 | 286.2 | 302.9 | 307.3 | 1.44% | 4.16% |
| Belarus | 456.3 | 469.2 | 469.4 | 461.6 | 454.9 | -1.45% | 0.29% |
| Georgia | 680.9 | 722.3 | 764.8 | 776.7 | 770.3 | -0.82% | 4.33% |
| Kazakhstan | 607.3 | 674.2 | 650.7 | 631.1 | 631.4 | 0.05% | 1.06% |
| Kyrgyz Republic | 262.4 | 279.7 | 283.1 | 290.0 | 315.6 | 8.82% | 4.96% |
| Moldova | 321.7 | 317.8 | 333.0 | 290.6 | 308.5 | 6.15% | -0.80% |
| Russia | 898.8 | 851.3 | 824.4 | 780.7 | 787.3 | 0.84% | -2.22% |
| Ukraine | 857.5 | 835.7 | 816.6 | 686.9 | 707.8 | 3.04% | -4.00% |
| Uzbekistan | 276.7 | 348.0 | 374.4 | 577.8 | 739.9 | 28.06% | 28.64% |
| # ATM Terminals per 1m capita - EA10 total | 728.9 | 713.7 | 698.7 | 679.4 | 706.3 | 3.96% | -0.17% |
| Note: figures are ATMs per million capita. | |||||||
| Source: calculated from PCM Yearbooks data. | |||||||
3.4 Largest Acquirers in Eurasia
The individual country profiles of this Yearbook include information and details regarding the largest acquirers by individual country.
Historically, the Eurasian banks consider both acquiring and card issuing as core bank business. Many banks issuing cards also have their own acquirer licences granted by the card schemes. They run their own acquirer operations in-house or use the services of third-party acquirer processors. As in the European countries, the acquiring business in Eurasia has started on a domestic level.
From 2009, Eurasian acquirers compete in their home markets, cross-border in the CIS region, and cross-channel at POS terminals, and service online merchants. From 2016, innovative acquirers started to offer omni-channel and multi-payment acceptance.
By mid-2024, omni-channel acceptance includes the ability to service all channels (i.e. POS/MPOS terminals, mobile in-store, online shops, in-app) and to accept multiple payment means in all of those channels. Multi-payment services demanded by merchants include cards, bank payments, online wallets, digital wallets, and prepaid products.
Outlook – By mid-2024, Eurasian acquirers face the following notable challenges:
- Rollout of contactless POS/MPOS terminals and domestic card schemes; Interchange++
- Complete acquirer service portfolio beyond cards, i.e. acceptance of card-less payment services
- Omnichannel payment acceptance: POS/MPOS, online, mobile in-app, mobile in-store
- Cross-border competition, omnichannel competition, finding PSP partners and PISP partners
- New security standards: e.g. 3D-Secure 2.0; tokenisation security, P2PE encryption
- Implement strong customer authentication (SCA) and risk-based authentication (RBA)
In 2016, Russia’s Sberbank became the largest European acquirer by number of transactions, due to investments in contactless acceptance at its merchants also expanded card acceptance on transportation systems across Russia, including Moscow Metro and five other metros.
In 2022, Sberbank acquired 3.76 billion purchase transactions on cards branded Mastercard or VISA, including 3.82 billion e-commerce transactions. It serviced 1,486,368 active merchant outlets with 2,362,325 POS terminals. It is believed that the significant sharp decline is a result of the international sanctions following the Russian invasion of the Ukraine. By 2023, no update was provided for Sberbank by Nilson.
The other notable large Eurasian acquirers measured with more than 100 million accepted purchase transactions by number include VTB Bank (RUS), Privatbank (UA), Gazprombank (RUS), Russian Standard Bank (RUS), Tinkoff Bank (RUS), Alfa Bank (RUS), and Prosvyazbank (RUS).