Visa and MasterCard will have to cough up nearly $4 billion in security deposits to Russia's central bank if they want to continue operating in the country, under a new law signed by president Vladimir Putin.
It takes an oligarch to break an oligopoly! The ultimate irony would be if the security deposit is used as capital for creating the local alternative. Wonder if this strategy will be copied by other nations.
Looks like it is now happening in India too with RuPay.
@PaulL: TY for sharing this article. Since RuPay has been around for over two years in India, I never got the "launch" part of the news when I read it a few days ago. Not one of my banks has approached me to replace / supplement my existing V/MC debit-cum-ATM
cards with a RuPay card. There's still no credit card on RuPay. V/MC don't need to maintain a security deposit to continue to operate in India. On the ground, the "taking on global players" part of the article sounds hollow and is a far cry from what's happening
with V/MC in Russia.
I too had heard of RuPay, but thank you for filling in the gaps in the PR and showing where the offerings differ.
Is there any cost incentive for banks to issue RuPay rather than V/MC cards? Will V/MC permit RuPay co-branding?
@PaulL: I don't know the exact figures but even V/MC debit interchange rate has been low in India - our regulator-cum-central bank RBI seems to have done a a Dodd-Frank-Durbin on the industry long ago! That said, RuPay's sponsor, NPCI, is a not-for-profit
government corporation, so we can never underestimate its pricing power. Given that RuPay has placed overseas acceptance on its own roadmap, it'd appear that co-branding with V/MC is either not permitted or not desired or both, but I'm not sure.
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