Cross-Border Transfers via the Fast Payment System: A Practical Overview

From the launch of the Faster Payments System (FPS) on January 28, 2019, through July 1, 2023, Russians completed 6.9 billion remittances totaling over 32.7 trillion rubles sent to phone numbers. This data was provided to socialbites.ca by the Central Bank of the Russian Federation’s press service.

To send money by phone, users open their bank app, choose the “Fast payment system” option, and enter the recipient’s number. Next, they select the bank to receive the funds and confirm the transfer. The money is credited instantly to the recipient’s account. Transfers to oneself or others via SBP are available.

According to the organizer, during April through June, one in two Russian residents used phone-number transfers through SBP, and one in four people used SBP for goods and services payments. VTB reports that SBP now accounts for about 80% of all transfers within Russia.

How to transfer money abroad by phone?

VTB forecasts suggest that as the service improves, cross-border transfers by phone number could become as common as domestic ones.

Currently, five Russian banks offer cross-border transfers via FPS with foreign partner banks. Fourteen partner banks across three countries participate in these transfers, though country names are not disclosed. The system demonstrates ongoing interaction between similar payment networks in different nations and between international banks.

Socialbites.ca, assessing the top 50 banks by assets and reviewing their sites, found that VTB and Tinkoff Bank offer remote remittance services abroad by phone number. MTS Bank is negotiating with about 40 partner banks from the CIS to act as intermediaries for Russian banks in cross-border transfers via SBP. Kirill Palchun, head of MTS Bank’s Money Transfers, noted that the credit institution currently fulfills this role for several banks.

Novikombank and PochtaBank plan cross-border SBP transfers in 2023, with Ural Bank for Reconstruction and Development aiming to launch in 2024. The “Renaissance Credit” may also introduce the service, though no timing has been announced. Novikombank is already preparing for cross-border transfers from abroad to Russia through FPS.

The Central Bank’s press service stated that transfers from Russia to abroad using the Fast Payment System are possible now, and banks with foreign partners are working on enabling transfers from abroad to Russia as well.

Transfers follow the same principles as domestic ones. It is prudent to confirm in advance whether a recipient country has a partner bank and what commissions apply. The Central Bank has set a cross-border transfer fee at 6 rubles via FPS. Transfers abroad by phone number are conducted in rubles and are converted to the recipient’s local currency by the receiving bank.

Where can money be transferred

At present, Russians can send funds by phone number to a limited set of countries via SBP, and it helps to verify the list beforehand.

Alexei Khranilov, head of the “Transfers” department at VTB, noted that cross-border services via SBP began in March of the current year to three CIS countries, with transfers surpassing 150 million rubles in that period. The aim is to broaden the geographic reach in the future.

The VTB site indicates that phone-number transfers are currently available to Armenia, Tajikistan, Kyrgyzstan, Uzbekistan, and soon to Azerbaijan, Belarus, and Kazakhstan.

Tinkoff’s site currently lists Armenia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan as eligible destinations. Socialbites.ca reports that Tinkoff now enables transfers to Kazakhstan’s Liberty Bank by phone number, though Tinkoff has announced that this service will cease on August 15.

“Banks are keeping a careful watch,” a market source told socialbites.ca, explaining that the list of sender countries could shift quickly under current geopolitical conditions. Periodic checks of the available countries and partner banks are advisable, both on banks’ websites and in their apps.

According to Alexei Krichevsky, author of Economism, the number of supported banks and countries tends to decrease rather than expand amid sanctions and related frictions.

Considerations when sending abroad

Stanislav Volkov, managing director of the NKR rating agency, explains that international transfers via SBP display the recipient’s name, which helps reduce errors. This transparency is not always available when sending to a card or wallet.

A notable advantage over SWIFT transfers is higher speed, with the process designed to minimize involvement from banks in unfriendly jurisdictions. This speed is particularly beneficial when cross-border operations face delays elsewhere.

Ekaterina Semerikova of the Blockchain and Fintech Lab at Skolkovo School of Management notes that a partner bank may refuse a transfer if it becomes subject to secondary sanctions.

TIMur Aitov, chairman of the Financial Security Commission of the Russian Chamber of Commerce and Industry, warns that accountability for cross-border transfers via FPS remains unclear and that fraud risks continue to exist, such as payment interception. He questions who would oversee actions if security forces in one country cannot operate in another.

There is also ambiguity about procedures if a transfer is blocked or lost, according to Aitov. He highlights the potential impact of ruble volatility on currency conversion during transfers.