Visa and MasterCard given Russian boost

Visa and MasterCard given Russian boost

Visa and MasterCard may escape having to pay billions of dollars in security deposits to carry on operating in Russia after the country's central bank rowed back on its initial demands.

In May Russia introduced a new law requiring the US card giants to deposit collateral with the central bank equivalent to the value of two days of processing volumes - estimated at $2.9 billion.

However, according to local reports, Russia has now had a change of heart, deciding that no deposits will be needed if the firms comply with another rule that requires them to process all transactions within Russian borders by the end of October.

MasterCard has already moved to address this, inviting local firms to bid for a contract to process its domestic payments. So far, more than 20 companies have registered their interest. According to Russia Today, Visa is looking to build its own processing centre in Russia.

The new requirements are part of a wider political battle between Moscow and Washington. In March, the card firms stopped processing transactions for several Russian banks because of US sanctions designed to put pressure on Vladimir Putin after he moved to annex the region of Crimea.

The Russian president responded with the new law, which will also see the creation of a national payments system within the next 18 months that will compete with the American-owned giants, which currently process around 90% of all card transactions in the country.

Comments: (1)

A Finextra member
A Finextra member 09 July, 2014, 11:23Be the first to give this comment the thumbs up 0 likes

well i need to obtain my international debit card or international master prepaid card instantly because i need them urgently

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