Russia’s market for international remittances is set to grow to $68 billion by the year 2021, according to research, with the fastest growing sector being bill payments made by companies, which looks set to double in size over this period.

The recent football World Cup placed Russia under the international spotlight, and the country responded by putting on a memorable show, with Russian citizens welcoming their European neighbours, as well as large numbers of South Americans, Middle-Easterners and South East Asians.

Russia’s presence on the world stage is an influential one, but the country’s business climate is often misunderstood, and its reputation in the Western world has suffered as a result of decades of political disagreement with the Western World, and, more recently, Russian agents meddling in the US elections, poisonings in the UK, and controversial interventions in crisis zones such as Crimea, Syria, and the Ukraine.

According to the Conservatory of Economic Complexity Russia is the 16th largest export economy in the world, exporting around $269bn and importing $180bn worth of goods in 2016. Russia’s biggest exports are petroleum, coal, and aluminium, whilst its biggest imports are cars, medical supplies and computing equipment.

Russia exports nearly $30billion of goods to China every year, and around $12bn to the US. The country has a positive trade balance and has been steadily decreasing the amount it imports over the past decade.

Despite its reputation for an economy dominated by huge corporations run by “Oligarchs”, many of whom spend most of their time outside the country, this certainly does not apply to its money transfer industry.

In fact, Russia’s overseas money transfer market is fragmented, with many disruptive money transfer companies, in particular mobile e-wallet services, finding significant market share, although the space is also home to a variety of major international and domestic players, such as PayPal, MoneyGram, Western Union, and on the Russian side, Korona Pay and Contact.

International bill payments, research suggests, are mainly dominated by 2 companies; Yandex, and Webmoney.

Russia sends far more money overseas than it has remittance inflows, thanks to a large expatriate presence in the country who regularly send money home to friends and family. Many international migrants are attracted by the opportunities in Russia to earn a higher wage, find better jobs, and an improved standard of living.  In terms of inflows, funds sent from Uzbekistan, Switzerland, the US, UK, and most notably, Ukraine, dominate the market. Thanks to a number of bilateral agreements that have facilitated money transfers between the 2 countries, the Russia / Ukraine remittance corridor is potentially the second largest in the world.

Best Options for sending money to or from Russia

Mobile apps:

the rise of money transfer apps has been as rapid as it has been unexpected, with new technologies making it possible to undercut the higher fees and less competitive exchange offered by banks. Apps such as TransferWise, Revolut, World Remit, and Azimo are all fintech service providers offering a good service, with speedy delivery times and close to interbank exchange rates.

PayPal, MoneyGram and Western Union are more traditional means of sending money to Russia. Sending money abroad using your bank is generally a more costly option, and with a shortage of correspondent banks that can act as intermediaries between domestic Russian banks and foreign ones, it can be tricky and a needlessly complex way to carry out an international money transfer to Russia in this way.

Brokers:

whilst apps are a useful and versatile way to send money to Russia, small businesses or those sending larger amounts may prefer to turn to a broker. Brokers offer a greater level of market knowledge, are used to handling large transactions, and offer a more personalised service. Small and large businesses, and those either looking to send a significant sum abroad on a one-time basis, or a series of smaller payments, would be wise to consult with a broker, who may be able to use their market knowledge to play the markets with greater efficiency, saving you a substantial sum.

Money Transfer Comparison:

it can be tough even using an app to send money overseas if you do not have great experience, and without prior knowledge of the marketplace, it can be even harder to establish if you are getting a good rate, and paying the right amount in fees. That’s why sites like The Money Cloud provide a money transfer comparison service, that provide customers with a high level guide to who is offering the best deals. The Money Cloud compares the real-time rates offered by a carefully selected selection of authorised and regulated brokers, helping customers quickly compare and contrast services, and use the one that suits them best.

At The Money Cloud we also offer a bespoke “digital dashboard service”, that means you can select the broker you want, and complete the entire transaction without leaving the safe confines of The Money Cloud’s personalised portal. The Money Cloud handles know your customer, and anti-money laundering checks, and logs every transaction that you make, and who you make it with, making it even easier to select which service to use.

Verdict

Russia’s reputation on the international stage is mixed, thanks to the sheer size of the country and the power of its government. But Russian financial infrastructure, whilst less well known outside of the country, is robust, and reliable. People, and businesses, send money overseas to Russia for all kinds of reasons, and thankfully, the money transfer market is competitive, diversified and not too tricky to navigate. Check the latest rates and charges now at The Money Cloud.