Russia's VTB to launch digital bank on VKontakte social network

VK

26/04/2023 09:00

By Elena Fabrichnaya
       MOSCOW, April 26 (Reuters) - Russian state-owned bank
VTB  VTBR.MM  will launch a digital bank within the mobile
messaging app of leading social network VKontakte, Russia's
answer to Facebook, as Moscow seeks technological solutions to
disrupted banking transfers. 
    Western providers Google Pay and Apple Pay restricted access
to their services after Russia sent tens of thousands of troops
into Ukraine in February 2022. That made operations with banks
abroad particularly challenging as many bank cards stopped
working overseas and Russia was disconnected from global payment
systems.
    "VTB is focused on developing digital channels and
alternative formats for servicing clients," deputy
president-chairman of VTB's management board, Anatoly
Pechatnikov, said at a briefing. "The development of our own
technology is especially relevant in the context of geopolitical
risks and international restrictions." 
    The digital bank will enable customers to carry out everyday
financial transactions such as money transfers, some bill
payments and mobile phone top-ups, within the VKontakte app.
Clients will only be able to access it on mobile. 
    Russia is pushing its Mir payment cards, but those are only
accepted in nine countries. 
    Meanwhile, the Bank of Russia has developed an alternative
to SWIFT, the System for Transfer of Financial Messages (SPFS),
and simplified the way banks can use its Faster Payments System
(FPS) with foreign counterparts for cross-border transfers.
    On March 1, state communications regulator Roskomnadzor
published a list of foreign messenger services, such as
Telegram, WhatsApp, Discord and Microsoft Teams, that were
banned for the provision of financial services. 
    VTB, which had launched banking services through Telegram in
January, said it was prepared to shut down its bank on Telegram
once Roskomnadzor had come to a final decision. 
    "As of today, there has been no such decision, so the bank
in Telegram works, although we have stopped actively promoting
it." 

 (Reporting by Elena Fabrichnaya; Writing by Alexander Marrow;
Editing by Bernadette Baum)
 ((alexander.marrow@thomsonreuters.com;))