Russian Savingsbank
Issuer
Savingsbank of the Russian Federation
System Description
Nationwide Interbank Payment System
Business Sectors
Retail, Salary, Wholesale Networks, Petrol Stations, E-Government (Social Smart Card), Loyalty, Online Trading with Stocks
Why Shift To Smart?
- To offer cashless payments to its mass clientele
- To reduce cash-related fraud
- To reduce the cost of handling and processing cash
- To generate additional revenue from a float account
- To enable full tracking of transactions that pass through the system
- To implement a system that is easy to maintain, operate and administer
The Savings Bank of Russian Federation (Sberbank) was founded in 1841 and is the oldest financial corporation in Russia. About 85% of all funds deposited in commercial banks throughout the country are concentrated within the Sberbank’s network. The Sberbank is the only bank in the Russian Federation with a governmental guarantee of preservation and repayment of citizens' deposits – therefore the bank could only use a card payment system whose successful functioning would be guaranteed throughout Russia.The smart card based payment system developed by the Austrian company BGS Smartcard Systems AG, has proved to be the turn-key solution that met the strict requirements of the Savings Bank of the Russian Federation.In 1993, Sberbank decided to deploy a smart card-based project in order to profit from the advantages of cashless electronic payments. The pilot project provided smart cards to a selected group of Sberbank customers. The card holders could use their cards for basic financial transactions (funds deposit, cash withdrawal, account statement, etc) in two main cities of the Russian Federation: Moscow and St. Petersburg. The smart card based payment system developed by BGS, has proved to be the turnkey solution that met the strict requirements of Sberbank.
In 1995, the Executive Board of the Savings Bank decided to introduce the DUET system in 16 regions of Russia. In 1997, the Savings Bank's Board issued a resolution on introducing the system in all regions of Russia. According to a declaration made by Vladimir Simonov, co-chairman of the Interdepartmental Commission for Smart Cards (ICSC) of the Russian Government, "a basis for building a universal payment system in Russia should be the payment system SBERKART" ("Vremya novostey" (News Time) No. 173, November 23, 2000). In 2003, the Savingsbank of the Russian Federation, MICEX (Moscow Interbank Currency & Stock Exchange) and VEO-Otkrytie (one of the biggest brokerage houses in Russia) joined their market expertise and technological know-how to introduce a product innovation for all Sbercard holders. Further enhancing the functionality of the successful Sbercard payment system, this product enables fast, secure and convenient trading of stocks and derivatives between brokerage houses and their clients using Sbercards.
In June 2005, Russian state-owned bank Sberbank acquired a 19,9% stake in BGS. Thereafter, it was decided to open the bank’s smart card payment system to other Russian banks, allowing it to become the nationwide interbank payment system in Russia, making it one of the world’s largest interbank payment systems. Since its introduction into the market in 1993, the Sbercard has evolved to become an item of everyday life and is accepted in various business environments such as networks of trade and service enterprises like supermarkets, retail shops, petrol stations, air cargo and transport companies, wholesale companies and online brokerage.
