Financial institution VTB explores impact of pay-services on consumer spending habits.
Time Stamp: 7:25 AM, May 15Writtern by Alexandra Marunina
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VTB Bank, Russia's second-largest lender, has experienced a surge in financial success in early 2025. In Q1, net profit leaped by 15.4% year-on-year, hitting RUB 141.2 billion ($1.70 billion), despite a drop in net interest margin due to high interest rates. This profitability was underpinned by gains in securities trading and a bullish Russian stock market rally during the first two months of the year. VTB maintains its full-year net profit forecast of RUB 430 billion ($5.16 billion).
Amid this financial fortitude, VTB launched its own payment service, VTB Pay, towards the end of 2024. The service has already garnered over 1 million users, with daily usage for purchases. Since its inception, VTB Pay has proven to be a potent tool for boosting transaction activities. To date, users have executed a staggering 40 million transactions and spent over 30 billion rubles. Notably, VTB Pay users make approximately 15% more payments monthly than those who haven't linked their accounts.
In response to this momentum, VTB introduced a new perk last month for its loyalty program Members using VTB Pay can now grab an additional 1.5% cashback on all purchases made in-store until the end of May. This benefit has more than doubled the number of service users.
Rostislav Yanukhin, Senior Vice President and Head of Transactional Retail Business at VTB, shared his insights, "Despite the popularity of 'plastic', we're observing a swelling interest from clients in our pay service. It's a hassle-free approach to pay with a simple tap of your phone, without the need to carry your card. This convenience draws users in - we're seeing a steady rise in clients utilizing VTB Pay, and since we rolled out the cashback category, we've observed an increase in transaction activity. Clients not only appreciate the ease of tapping, but also the extra reward they receive."
Looking ahead, VTB Pay plans to roll out new features for making contactless payments at checkout and in online stores later in the year using a special button. Currently, the pay service is only accessible to clients with Android smartphones boasting NFC capability. IOS users can obtain a free payment sticker to make contactless transactions as well.
The booming global payments market, projected to expand from $716.3 billion in 2024 to $1.11 trillion in 2029 with a CAGR of 9.31%, suggests that VTB Pay's development will focus on streamlining user convenience and optimizing merchant efficiency in line with broader industry trends. As the payment landscape intensifies, with major global competitors and a fragmented market, VTB Pay will likely prioritize expanding its transaction activity through innovative features and strategic partnerships to capture larger market shares both in Russia and neighboring regions.
VTB Bank, capitalizing on its financial success, is focuses on further growth with the introduction of new features for its payment service, VTB Pay. As the global payments market continues to thrive, VTB Pay plans to optimize user convenience and merchant efficiency, aiming to capture larger market shares in line with industry trends, both in Russia and neighboring regions.
