“Central Bank of Russia takes control over foreign payment systems and e-wallets”, “Alipay and WeChat Pay will be restricted in Russia”, “Russian Central Bank will strengthen regulation towards Apple Pay and Google Pay” — these were the business news headlines after new amendments to payment laws were introduced to the Russian government last week.

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DISCLAIMER: BELOW IS AUTHOR’S PERSONAL OPINION THAT DO NOT NECESSARILY REFLECT THE COMPANY’S VIEW ON THE MATTER

Newsmakers are unreliable crowd, they won’t dig too deep, keen on causing panic and ready to forget it all the next day. So I hate commenting the news — to explain why the headlines are misleading, you would need to explain how things work in general. And to explain that, you’ll need to be either Yuval Harari, or just be good at making complicated things simple. I’ll try. Don’t judge.

Journalists job often is to just make a scandalous headline. Lawmakers job is to describe the rules of living or making business for the companies and the people. In the realm of their own country.

The rules are pretty much set for the banks. Almost in every country. The banks and other companies, dealing with people’s money, are relied on by the government to control and restrict various ways of scams, money laundering schemes, and any other illegal activities plaguing every society. The payment relationship between people and businesses must be described, as a bare minimum, and should be governed in a proper country.

Not all the newest forms of relationships between people and businesses are actually regulated. That’s okay. The laws should govern the relationships when its time to. I will remind that many countries have not made up their minds about cryptocurrencies yet. Neither about e-wallets. Nor about international online marketplaces. Or e-commerce in general.

The world is changing, technology appears, and country borders actually disappear in some ways. There is a myriad of businesses that work on the territory of one country, while being set up and compliant with the laws of another country.

Look around. Chinese payment systems (set up and compliant with the laws of People’s Republic of China) are spreading their activity everywhere in the world, allowing their clients, Chinese citizens, to buy souvenirs in Paris, or in Moscow.

International Apple and Googlelink the bank cards, issued by banks in Russia, Australia, or Brazil to their wallets, and pay. What country laws regulate them? American MoneyGram allows money transfer to half of the world countries. Which country laws does it rely on?

Every country has a right to install the rules that foreign country businesses will abide when working on their ground. Especially, the businesses that are directly involved with payments. Very few countries try to ban everything foreign, most just set up rules. And Russia is no exception.

For those not interested in reading into all the intricacies of the Russian payment laws — I’ll make it simple. There are no dramatic changes for foreign payment systems, operating in Russia just yet. Alipay, WeChat Pay — no problem, Russian businesses will keep using them to accept payments from Chinese tourists. Apple Pay, Google Pay — you do amazing job, keep it going. (You can stop reading here).

For those eager to understand what changes, here you go:

Lenta.ru

1. International payment systems analogue to Visa, MasterCard, or Moneygram, if they decide to work in Russia — must follow new local rules.
2. Foreign e-wallets like Alipay, WeChat Pay, Skrill can service Russian businesses and help their foreign (!) users pay, but should make sure they have relevant license in their country of origin, and that they work with the help of a local licensed payment company.
3. A new payment law object is introduced to describe Apple Pay and Google Pay payment apps and set rules for them. The new requirements concern mostly the Russian users payment information security, relationships with local banks and overall clarity.
4. A new amendment is introduced to describe the likes of Pay.On, and other technical gateways that help operate the payment information passed between banks or licensed payment companies, not participating in actual settlement.
5. And finally, the most intriguing part is about aggregating type of businesses, that accept funds designated to other companies. Looks like a PSD2 stance at marketplaces.

So, this are the payment law amendments that will be discussed, changed and then changed again over the course of the governmental process. We’ll see what it will actually change on the market way later.

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