Payment analysis: Characteristics of the emerging markets in Eastern Europe

By Ingo Blum on 30. August 2012 in Market Insights

The Eastern European payment region is the second fastest growing market of all regions worldwide in terms of growth rates and card payment volume over the last five years. Growth in the region is mainly supported by the popularity of debit cards, many of them co-batched by Maestro. Fraud has, however, continued to hassle card usage.

What potential stands for the Eastern Europe region?

Eastern Europe as stated by the UN contains the following countries: Belarus, Bulgaria, Romania, Czech Republic, Hungary, Moldova, Poland, Russia, Slovakia, Slovenia and the Ukraine, Unfortunately, the Baltic countries are not included. Added there are over 131 Million active internet users.

The total volume of 20 Billion Euro of all e-commerce transactions is still very low compared to the big three markets UK, Germany and France – which account to 70 % or 175 Billion Euro of the whole e-commerce volume in Europe.

Eastern Europe count 9-10% of the European e-commerce volume

But the tendency is rising with big markets as Russia with 5 Billion Euro in 2011, Poland with 4,5 Billion Euro in 2011 and Czech Republic with 1,4 Billion Euro in 2011.

Many payments are still made in cash, especially cash on delivery. But also bank transfer is a very common used payment method. A look into some of the European emerging markets, underlines the growing internet activity: In Russia, almost 40 % of the population is using internet, of which 60 % or 45 million users made online purchases. Key regions are Moscow and St. Petersburg where more than 50 % of all Russian online revenue was generated in 2010. According to evaluations, the Russian market of electronic money will grow by 50-70% in 2012. The number of active e-purses in 2011 has grown from 30 to 34 Million Euro. The most important payment methods are Qiwi, RBK, Yandex Money, Moneta and Webmoney.

Despite obstacles such as long delivery times, online shopping continues to gain in popularity in the Ukraine. The number of internet users in June 2011 increased from 9 million in the previous year to almost 13 million. The most popular product categories include “household appliances” and “mobile phones”. According to yStats, the company profit tax is 21% now, planned to decrease to 19% in 2013 and down to 16% in 2014.

In 2010, as many as 24 million people used the internet in Poland, which is more than 60 % of the entire population. In line with this trend, Polish B2C E-Commerce has recorded double digit growth for many years, now coming to reach the 5 Billion-line in 2012.

Finally, internet users in the Czech Republic reached in 2010 more than 6 million, with 25 % of the population purchasing online. Sales in B2C E-Commerce experienced a double digit growth from 2009 in 2010 remained however below 5 % of retail revenue. More than 60% of Czech online shoppers paid by cash on delivery for their online purchases while almost 35% preferred online banking transfers in 2010.

Over all, Slovakia and Estonia were the countries with the highest penetration of internet usage compared to the whole population of those countries.

What do people buy online in Eastern Europe?

Most common goods bought online are clothes, shoes, and accessories, followed by books, household goods, films/music, travel, tickets, electronic equipment, computer software and hardware and electrical household appliances.

In general, Eastern European B2C E-Commerce continues to grow steadily. More and more banks start into the Acquiring business, mainly having a domestic license for Visa and/or MasterCard. Most of the banks in Eastern Europe that play a role in online payment processing, are owned by western banks.

The number of internet users and online shoppers steadily increases. However, differences can be observed. In order to reach western standards, Eastern Europe needs to resolve three main obstacles: Security of online payment transactions, postal service delivery problems, trust in online shopping.

PayPipe routing gateway offers ready solution for all common domestic payment methods

The market fragmentation can be easily overcome in the same way as in Europe where payment gateways serve as an access point to all important payment schemes. As a global processor PAY.ON´sservices are an accelerator or rather a distributor for all international payment methods for the whole payment industry. Over its white label PSP platform PaySourcing and routing gateway PayPipe clients are automatically connected to all available payment schemes worldwide. Actually several hundred PSP, acquirers, merchant service providers and financial institutes are using one or more of PAY.ON´s services. Doing so, our several hundred clients can directly bring our Eastern Europe connections into use for their merchants to connect them to millions of consumers. Thus PAY.ON is a guarantor of the immediate availability of all needed payment methods worldwide.

About the Author

Ingo BlumView all posts by Ingo Blum


  1. wilhelm 4. September 2012 Reply


    Thanks for your response. Sources are e.g. Nielsen and yStat

  2. Markus
    Markus 16. September 2012 Reply

    Can you name some of the acquirers PAY.ON is connected to in Eastern Europe. What does it take to work with thos acquirers? How can PAY.ON support?

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