Net Element, Inc. (NASDAQ: NETE) Payments Platform Poised for Performance as Bank Card Use in Russia Rises

October 4, 2018 10:23:41
  • Russian ecommerce still 80 percent reliant on cash
  • Net Element’s “PayOnline” payments platform to cash in on trend toward non-cash
  • Strategic partnerships pave entry to Russian mobile and online payments market

In Russia, cash on delivery is not just a way to pay for takeout; it’s how over 80 percent of online purchases are remunerated, according to Ecommerce News Europe ( However, that is changing fast. In 2017, “financial cards and payments performed positively in Russia”, says Euromonitor International ( Russian consumers are changing their purchasing habits, it seems, as financial literacy and cashless payment solutions, like those offered by Net Element, Inc. (NASDAQ: NETE), come to market. A recent report from Zacks notes, “Net Element is a growth company in the payments industry that should benefit from the adoption of mobile and online payments in the U.S., Russia and Eastern Europe.” In fact, Net Element is the only U.S. company listed on the Nasdaq that stands to benefit from the Russian electronic payments expansion.

Russian consumers are a cautious lot, paying only for goods when they are received. Merchants display an equal degree of circumspection; they typically prefer cash-on-delivery (COD). COD in America was widely employed during the heyday of mail order commerce but has since been superseded by debit cards, credit cards and web-based payment systems. In other countries, COD is still an option. In the Middle East, around 60 percent of online transactions are completed by COD, prompting one commentator to lament (, “Cash on delivery is the biggest challenge for e-commerce players in the region. There are high return rates, a big lag time between order and payment and the need for delivery people to carry cash is a major risk.” The same challenges beset ecommerce in Russia. However, a payment platform like the one developed by Net Element is catalyzing consumer acceptance of non-cash payment.

The potential of this emerging market is not to be underestimated. Citing a recent report from Morgan Stanley, this column discloses that in the five-year period from 2018-2023, the Russian e-commerce market will grow by more than two-and-a-half times – to 3.491 trillion rubles ($53.15 billion) – from 1.292 trillion rubles ($19.67 billion) in 2018. In 2017, “the Association of E-commerce Companies (ACIT) estimated the volume at 1.04 trillion rubles ($15.83 billion).”

Net Element is on it. In 2017, the company’s PayOnline subsidiary launched Apple Pay support in Russia ( The global number of Apple Pay users is growing at a rate of over one million per week, while transaction volumes are up 500 percent over the last year. Since launching in Russia on October 4, 2016, the number of Apple Pay users in the country has increased to an estimated 200,000 and continues to grow. As a fully integrated electronic commerce platform, PayOnline is at the forefront of the payments industry in the region and poised for expansion into Russia. It is well positioned to capitalize on this developing trend by enabling and supporting mobile and e-commerce merchants to accept Apple Pay.

PayOnline is also collaborating with Bank Sputnik to offer a comprehensive multi-channel payment facilitator solution for SMB merchants in the Russian Federation ( This unique solution offers a set of tools not available from any other transaction processing company in the region and expands PayOnline’s offerings beyond electronic commerce. Under the exclusive partnership, Bank Sputnik will offer a fully compliant legal framework and bank sponsorship to enable PayOnline to process transactions as a payment facilitator. By provisioning a single, master merchant ID, PayOnline ensures that merchants and their clients benefit from an automated, real-time and seamless onboarding experience. The API-driven platform simplifies merchant account enrollment. A sub-merchant can be enrolled, approved, boarded and processing payments in a few minutes.

Net Element offers a broad range of payment acceptance and processing services that enable merchants of all sizes to accept and process over 100 different payment options in more than 120 currencies, including credit, debit, prepaid and alternative payments. The company also provides merchants with value-added services and technologies, including integrated payment technologies, POS solutions, security solutions, fraud management, information solutions and analytical tools.

For more information, visit the company’s website at

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