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Visa and MasterCard no longer have right to block Russian cards

Published time: July 01, 2014 10:12
Edited time: July 02, 2014 09:10
AFP Photo / Damien Meyer

AFP Photo / Damien Meyer

A new Russian law starting July 1 means Visa and MasterCard can no longer block Russian clients. It is part of legislation for a national payment system, and ensures electronic payments and protects Russians from being blocked after an incident in April.

The new national payment system should be up and running in 18 months.

When diplomatic relations were at a low between the US and Russia over Crimea, both credit card companies cut off Russian clients associated with banks sanctioned by the US.

The aftermath of the incident inspired the Kremlin to tighten legislation on foreign credit system operators, which will now have to pay a security fee in order to continue operating in Russia.

The law on foreign payment systems was signed on May 5, and included is a provision that foreign credit operators will have to pay a fee of 25 percent of average daily turnover to the Central Bank.

Morgan Stanley estimates the fee could cost Visa $1.9 billion, and MasterCard $1 billion. The final figure of the security fee hasn’t been announced, but the banks can get around the fee if they find Russian partners by October31 to process the payments, according to Central Bank head Elvira Nabiullina. Already established processing companies 'Golden Crown' and 'Universal Electronic Card' have been mentioned as possible partners.

Visa has made a move to continue its operations in Russia, home to more than 140 million consumers, and will create its own processing center in Russia within the next two years. Previously company CEO Charlie Scharf threatened to exit the Russian market.

Comments (9)

 

Freaky 03.07.2014 16:28

Wil 01.07.2014 16:44

excellent move Russia. Again u r the only thing (in conjunction with China) that is standing in the way of complete dominance (& destruction) of the world by greedy ba

  


Russia and China are the saviours of the world and will take the rest of the world away from hypocrit West tirrany
They do as we have freedom but it is fake.
They control our bank account - shopping - internet - spy camera's in the city - telephone. They can follw you from home till you reach your destinations for example on vacation.(hotel-ATM)
Thats what they call democracy. They mean demon-cracy

 

mergon 02.07.2014 14:52

Barclay,s bank in Poole Dorset has 2 counter staff on at all times , and the reason for this is they are going automated ,we went in to get some money out and pay the bill in cash as usual but the counter person asked for my wifes bank card and did a debit out of it and then slipped a digit and had to ask for help we told the staff that we dont want to set up for debiting we want to pay in cash they offered a mini statement

Bournemout h has already gone automated , we are looking for another bank !

 

UkrToday 01.07.2014 14:56

Every country that values its soverinty and financial security should follw Russia;s lead and take similar stapes to ensure that their finanaical system is not held to ransom by the US. Hoepfully Russia will be able to expor its technlogy and make it freely abvailable to other markets. the idea of having all transactions cleared in the US is detrimental to any states independence.

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