MasterCard seeks Russian processor
17 June 2014 | 5711 views | 0
MasterCard is inviting Russian companies to bid for a contract to process its domestic payments as the US card giant seeks to overcome hurdles recently erected by Vladimir Putin.
Among a series of requirements Russia placed on MasterCard and Visa under a new law signed by Putin last month, is that all transaction data be kept within Russia's borders.
In order to comply, MasterCard has put out a Request for Proposal, asking local firms that are registered by the Russian Central Bank and have an operational centre based in the country to bid for the role of authorisation, clearing and settlement of domestic payments.
MasterCard, like Visa, has committed to staying in Russia despite being caught up in hostilities between Moscow and Washington over the last few months.
In March, the card firms stopped processing transactions for several Russian banks because of US sanctions designed to put pressure on Putin after he moved to annex the region of Crimea.
The Russian president responded with a new law that will create a national payments system to compete with the American-owned giants, which currently process around 90% of all card transactions in the country.
In addition, not only have the pair been told that they have to keep all transaction data within Russia's borders but that they must also deposit collateral with the central bank equivalent to the value of two days of processing volumes - around $3.8 billion.
However, Russia has since softened its stance and Ilya Riaby, GM, Russia, MasterCard, says: "Russia is an important market for MasterCard and we are committed to providing the best possible services for Russian cardholders while continuing to develop electronic payment innovations in this market."