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Russia’s payment system not replacement, but needed alternative to Visa, MasterCard

Published time: May 23, 2014 17:51
Edited time: May 24, 2014 04:48
AFP Photo / Nicholas Kamm

AFP Photo / Nicholas Kamm

The Russian payment system is not a replacement for Visa and MasterCard, just a much needed alternative, head of Sberbank Herman Gref told RT. The statement comes as the two credit card firms said they will keep on operating in Russia.

"Let an alternative to the international payment systems be, the alternative that shows their global responsibility," Gref told RT Friday at the International Economic Forum in St. Petersburg. "It is unacceptable to destabilize lives and financial activities of the huge country because of any political tensions. The population of 150 million people shouldn’t suffer.”

However the head of Sberbank said he does not consider Russia’s national payment system as a complete replacement to the foreign analogues, more as a local alternative.

After talks at the International Economic Forum in St. Petersburg, the first ones after the two international credit card firms disrupted their operations in Russia in a sanctions move, MasterCard and Visa said they’ll maintain their presence in Russia. But on new conditions.

Under the new legislation coming into effect January 1, Russia will have the right to set an obligatory security deposit of up to 10 percent of the credit card companies' daily turnover, or about $100 million for each, Interfax has estimated. Under the first version of the legislation, the government asked for a 25 percent fee. This would have cost the payment systems $3 billion, more than five times higher than the companies' combined revenues, Morgan Stanley calculated.

The parties agreed that within the next 6 months Visa and MasterCard will be using processing within Russia and find a Russian owner for their subsidiaries in the country.

Comments (16)

 

Ursula Riches 20.06.2014 20:41

I want a card from the freeer world ie Russia to use in Europe.

 

shars 24.05.2014 22:05

Mark 23.05.2014 21:33

Putin needs to press on with his plan of the Russian payment system. Putin needs to give a firm timetable when he wishes his orders be implemented.

  



I agree. I don't understand Visa and MasterCard in RF anymore. China has their own system, what's up with Russia?

 

Dusan L. Kuljic 24.05.2014 15:46

It is DIFFICULT to believe Visa & Master could not have anticipated the consequences before making such stupid move by disabling payment method!

Business is one thing and politics is another. This time politicians told business people what to do, didn't they?

Do you think politicians will pay the price for that?
No, of course not! They NEVER do!

View all comments (16)
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