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

MOSCOW  – Russian state-owned bank VTB 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.”