Russian central bank issues new payment cards to take on Visa and MasterCard

Russian central bank issues new payment cards to take on Visa and MasterCard

Thirty-five Russian banks have agreed to participate in the launch of a new national payments card intended to challenge the dominance of Visa and MasterCard.

So far, seven of the banks have tested the basic functions of the new' Mir' card in their infrastructure for cash withdrawal and deposits through ATMs, payment for goods and services, and fund transfers between cards. Another group of banks is to complete tests by the end of 2015.

The Bank of Russia holds 100% of the shares of the National Payment Card System, which was founded in July 2014 at the behest of President Vladimir Putin in response to US and EU sanctions which saw MasterCard and Visa cut off services to several of the country's banks.

Olga Skorobogatova, deputy chair of the Bank of Russia, says: "In a year and a half we have been able to create not only a national payment system, but also to solve two strategic objectives. First, we transmitted the processing of major international payment systems to the NPCS operation clearinghouse. The second objective is the issuing of our own national card.”

The new cards will bear the branding of MasterCard, JCB and American Express under a 'co-badging' agreement to ease their acceptance in the market during the pilot phase and to allow for transactions in overseas markets

The central bank commemorated the first issue of Mir cards with a silver coin depicting the cards in a denomination of 3 rubles.

Comments: (4)

A Finextra member
A Finextra member 18 December, 2015, 21:531 like 1 like

I've been in the card business since 1981 and it seems to me that about once each decade the Russian Banks make a claim that they are going to implement a system to disrupt the the 2 maor card brands. And they haven't. Wonder what will make this time different?   

Hitesh Thakkar
Hitesh Thakkar - SME - Fintech startups (APAC and Africa) - India 19 December, 2015, 11:46Be the first to give this comment the thumbs up 0 likes

@Jim you are right, I was also wondering why Govt wants compete on one hand and other hand they also co-brand it. Why they can not be straight and say we can not compete to let me Collaborate and leverage.

Phil Davies
Phil Davies - Bancom Europe Ltd - horsham 21 December, 2015, 08:101 like 1 like

If I remember correctly this blew up when the schemes were not able to comply with Putins requirement of consumer data to be held and controlled domestically. So I suspect this is all about controlling the data of the Russian consumers for governmental purposes. With the co-branding in place then data for all Russian cardholder global transactions may be accessible to the Putin regime.

A Finextra member
A Finextra member 22 December, 2015, 09:34Be the first to give this comment the thumbs up 0 likes

With 2.2B RuPay cards already issued in India, I see this gaining traction in Russia for local payments.