Russian plastic card market
The Russian plastic card market is relatively new but has already displayed an impressive growth rate. According to the estimate of the Central Bank of Russia, 42,5 millions of plastic cards were issued before 1st July, 2005, which is 1,5 times more than in the previous year. The credit cards segment is relatively small (4,2% for the same date), but its growth rate is higher (82% with 50% - for debit cards). Experts forecast that it is plastic card crediting which is going to become the priority one for Russian banks and which will substitute consumer crediting. By the year 2008 the amount of credit cards can reach 15-20 mln, which is higher than the present figure. In November, 2005 IMA-Consulting Company carried out a complex credit card market research in Moscow.
A general description of the situation
For the time being our credit card market looks slightly chaotic. Strict requirements for the necessary documentation are compensated by low service charges and credit rates, and vice versa. It is difficult to say (predict), which trick will the indistinct bank criteria for getting a credit card play on the next applicant. However, the market is developing in the direction, forecasted by the financial analytics. In future we will observe the development of the two following credit card segments of the market:
- The segment with the high service cost and low requirements for the customers.
- The segment with the low cost for using a card and high requirements for the customers.
In general, though, banks aim to reduce requirements for the applicants: less paperwork - more clients. Banks offering unclear (not transparent) conditions will motivate customers to collect all the necessary documents by giving out bonuses and promoting preferential terms: the more convenient repayment period, bonuses for using cards, special conditions depending on the service character provided (e.g. getting the interest from the account balance), on the habits of the customer (discounts in the shopping malls, restaurants, drug stores, etc).
However, today the top issue is to establish the competent working procedure with the potential consumers. The effective communication with the customers secures the successful promotion of credit cards as a new product. The research shows that 28% of the citizens of Moscow complain about the current service quality in the banks.