GORKI (Moscow Region), June 18 (RIA Novosti) – Russia’s national card payment system is not being created to counteract foreign counterparts, but as a reasonable alternative to them, Russian Prime Minister Dmitry Medvedev said Wednesday.
“The national card payment system should give consumers more opportunities to choose, and in fact, most importantly, the idea is not to struggle against foreign systems, this is wrong and in fact a violation of competitive principles. This is a kind of a reasonable alternative to foreign systems, including the famous and most popular ones like Visa and MasterCard,” Medvedev said at a meeting on establishing the national card payment system.
Russian President Vladimir Putin signed into law a bill to create a national card payment processing system in early May. Plans to establish the system were initiated in response to Ukraine-related sanctions that saw several Russian banks denied service by global powerhouses Visa and MasterCard, troubling the general public and raising concern over the security of the country’s financial system.
The law to create a national card payment system has tightened requirements for payment system operators with clearing and settlement centers outside Russia.
Specifically, it obliges foreign payment systems to make quarterly contributions to a special account in the Central Bank of Russia beginning July 1, of 25 percent of their average daily turnover. Additionally, penalties have been introduced for operators of payment systems for the unilateral termination of services.
“The law envisages a range of economic measures to protect the interests of citizens and banks. At the same time, the specifics of the means and procedure for sanctions laid out by this document need to be established by the Russian government,” Medvedev said.
In late March, following Russia’s reunification with Crimea, Visa and MasterCard halted client operations for cardholders at Bank Rossiya, SMP Bank, as well as at their subsidiaries Sobinbank and Investkapitalbank, with no prior notice, causing a serious drop in the banks' consumer confidence.