Russian state-owned bank VTB plans to develop a digital bank within the mobile messaging app of Russia’s answer to Facebook, VKontakte, as Moscow explores technology answers to disrupted banking transfers.
After Russia invaded Ukraine in February 2022 with tens of thousands of troops, western suppliers Google Pay and Apple Pay limited access to their services.
Operating with banks got harder due to the isolation between Russia and the rest of the world’s payment systems, according to Reuters.
“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.”
Customers will be able to conduct ordinary financial operations including as money transfers, bill payments, and mobile phone top ups through the VKontakte app.
Users will be able to access it just via mobile.
Russia is marketing its Mir payment cards, which are now only accepted in nine countries.
Meanwhile, the Bank of Russia has created an alternative to SWIFT called the System for Transfer of Financial Messages (SPFS), as well as streamlined how banks can utilise its Faster Payments System (FPS) with foreign counterparts for cross-border payments.
On March 1st, the Russian communications regulator Roskomnadzor published a list of international chat services that were prohibited from providing financial services, including Telegram, WhatsApp, Discord, and Microsoft Teams.
VTB, which debuted financial services on Telegram in January, said it was ready to shut down its Telegram bank once Roskomnadzor made 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.”