THE CARDS OF RUSSIAN ASSEMBLY («Finance director», March, 2004)

Experts of central Bank claim that the quantity of cards issued by Russian banks exceeded 20 mln. at the end of past year. As predicted by the Head of Government of the payment system MasterCard International, Andrew Korolev, by 2006 this segment of the domestic market will increase at 400%. Today, according to him, only 7 cards fall at 100 people in Russia, while in Europe – 40.

Evidently, representatives of both main payment systems MasterCard and Visa decided to lend a helping hand to out country for acceleration of development of plastic cards market. In 2002 Visa certified the company Rozan Finance for the production of card with the logo of this payment system. Nowadays a Nizhny Novgorod company NovaCard has got such possibility. Besides, NovaCard is going to be the first Russian card manufacturer of the other largest payment system – MasterCard.

The Commercial Director of NovaCard, Vadim Ustinov, has informed that this project is beneficial either for the banks or for the enterprises.

The banks will able to reduce considerably costs, as earlier cards were ordered abroad. Correspondingly, the majority of costs were spent to expedite the customs procedures and transportation, herewith it was necessary to follow special safety conditions. The production of cards in Russia, as Vadim Ustinov considers, will allow reducing of transport costs almost in three times, and total cost of their production for the domestic banks will reduce up to 20%. Of course, time of order receipt will reduce too. In addition Vadim Ustinov summarizes that NovaCard is intending to work with small orders (from 250 cards) in contradiction from Western manufacturers.

At the same time benefits for the company-manufacturers themselves turn out to be much less. First of all, representative offices of the payment systems will control production process (quality, safety of manufacturing method) and will take part in financial control. Secondly, the card manufacturers have no choice for the suppliers of raw materials ( holograms, expendables, paints): representatives of the payment systems determine narrow circle of resources for the company-suppliers. And, at last, no considerable growth of turn is foreseen. According to Vadim Ustinov, his company produces 15 mln. different cards monthly (bank, service payment cards and so on), and Visa produced only 10 mln. cards while it stayed in Russia. That’s why NovaCard concentrates its efforts at increasing profit, but not turn.

In the near future Visa and MasterCard are going to certify several plants else and Goznak (Perm) and Orga (Zelenograd) are amongst them.