US officials lobbied Russia this year on behalf of MasterCard and Visa over concerns that planned legislation for a national payment card system would "disadvantage" American businesses, according to a cable released by WikiLeaks.
The state department cable from 1 February, entitled 'Russian draft bill would require on-shore credit card processing', outlines concerns on the planned law for a Russian National Payments System.
The draft law would have seen the creation of a national payment card system (NPCS), operated by a consortium of state-owned banks, processing payments for all members, collecting an estimated $4 billion a year in fees.
According to the cable, Visa's public relations head in Russia, Dmitriy Vishnyakov, told the US that Russia's plan follows the "China model" on payment card systems.
Currently, Visa and MasterCard have around 85% of the Russian payment card market. They would both have the option of joining the NPCS but would not have any role in domestic transaction processing - which accounts for the bulk of revenues in the country - although they could co-brand and process payments made abroad.
The cable says that if they choose not to join the NPCS, the American firms will have to embark on the expensive exercise of setting up their own on-shore processing centres.
The draft law says the companies would have one year to set up these centres with a ban on sending abroad payment data for purely domestic transactions becoming effective two years after the law enters into force.
Vishnyakov suggests that Russian security services assume that "US payment systems routinely share data associated with payment transactions by Russian cardholders with intelligence services in the US and elsewhere".
The Visa man even suggests that the requirements "would entail so much expense and difficulty for Visa and MasterCard that the two companies might quit the Russian domestic market".
The cable concludes: "While the draft legislation has yet to be submitted to the Duma and can still be amended, post will continue to raise our concerns with senior GOR officials. We recommend that senior USG officials also take advantage of meetings with their Russian counterparts, including through the Bilateral Presidential Commission, to press the GOR to change the draft text to ensure U.S. payment companies are not adversely affected."
This week MasterCard and Visa have both moved to stop donations to WikiLeaks - allegedly under political pressure.
PayPal, which had originally said that the WikiLeaks' account had violated its terms of services when it stopped processing payments on its behalf last week, has since admitted government involvement in the issue.