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Visa May Still Leave Russian Market Over Tougher Regulations

© Flickr / orphanjonesVisa May Still Leave Russian Market Over Tougher Regulations
Visa May Still Leave Russian Market Over Tougher Regulations - Sputnik International
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International payment system Visa, which suspended card transactions for several Russian banks following US sanctions, has not ruled out withdrawing from the Russian market, the company’s press service told RIA Novosti.

MOSCOW, June 17 (RIA Novosti) – International payment system Visa, which suspended card transactions for several Russian banks following US sanctions, has not ruled out withdrawing from the Russian market, the company’s press service told RIA Novosti.

“We appreciate the flexibility of the government on this issue and continue to see strong development potential in the Russian market for cashless payments. However, it does not give us confidence, given the provisions of the law introducing a required security deposit, that we can continue to provide our services in the long run,” the press service said, commenting on the requirement set out in the recent Law on the National Payment System.

“As we have repeatedly said since the adoption of the amendments to the law, the requirement of a security deposit is unacceptable and goes beyond what we would want to do,” Visa stated.

At the same time, the company is actively working with the Russian government in order to find a mutually beneficial solution to the issue of amending the law.

“We continue to take steps to comply with the Russian government on local transaction processing, while paying particular attention to the need for maintaining the highest level of service that our customers expect,” the company concluded.

MasterCard, another major player in the cashless transactions market, is searching for a Russian company to take on all internal payment transactions within Russia for its international card payment system in an effort to comply with the new regulations.

Following Russia’s reunification with Crimea in late March, Visa and MasterCard halted client operations for cardholders at Bank Rossiya and SMP Bank, as well as at their subsidiaries Sobinbank and Investkapitalbank, with no prior notice, causing a serious drop in consumer confidence.

Russia reacted to the unexpected halt with a law to create a national card payment system that obliges foreign payment systems to make quarterly contributions to a special account in the Central Bank of Russia, totaling 25 percent of their average daily turnover from July 1. Furthermore, penalties have been introduced for payment system operators for the unilateral termination of service.

Both companies have said they wish to continue working in Russia, responding to the Finance Ministry with proposals to launch their own payment operators inside Russia within the next 18 months.

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