Until the American Express - Russky Standart April agreement, American Express had been the only card brand issued exclusively by the company and distributed between banks on an equal basis. Under the new agreement, however, Russky Standart will "provide full client service to American Express cardholders, including transactions and credit limitations."
American Express said those who already have American Express cards would still receive full service, but no more personal international-currency cards would be issued starting this fall. To offer American Express cards to their customers, Russian banks will have to seal agent agreements with Russky Standart, American Express said.
Banks were clearly unhappy over the news.
"In our letter to American Express, we informed the credit card company that working through Russky Standart is something we cannot possibly accept. We recommended either conserving the existing card distribution system or giving us the same authority as Russky Standart," Andrei Krasnov, vice president of Bank Moskvy, said Monday. "If we do not receive a positive answer, we will have to turn to other credit card companies to offer similar products to our VIP clients."
Vneshtorgbank, Russia's No 1 non-state-owned bank, also applied to American Express for similar preferences. Applications from many other major Russian players are expected soon.
"We would advise against trusting an outside bank with transactions on the cards of our VIP clients. In this case we are in no way insured against someone else tapping our customer base."