EASTERN ALTERNATIVE
Following the suspension processing of financial transactions by Visa and MasterCard at Russian banks targeted by Western sanctions, Russian financial institutions increased their cooperation with Asian payment giants China UnionPay (CUP) and Japan Credit Bureau (JCB).
JCB has already signed agreements with three Russian banks, including VTB, Gazprombank and Alfa-Bank. In November, the JCB's CEO Takashi Suetsugu announced that VTB and JCB would start issuing joint payment cards by no later than the end of 2016 and expressed hope of cooperation with Sberbank.
CUP has issued more than 45,000 cards in Russia and expects to issue a further 2 million over the next three years.
However, the level of interest shown by Russian banks in Asian payment processors has not been particularly high. Most Russian banks hope to return to stable situation where MasterCard and Visa cards process payments without interruptions. The two American companies together account for approximately 80 percent of payment cards issued in Russia.
CENTRAL BANK DEVELOPS RUSSIA'S NATIONAL PAYMENT SYSTEM
Extensive cooperation with Asian payment service providers will be difficult unless a national payment system is established in Russia. Conscious of this, in May Russian President Vladimir Putin signed into law legislation establishing a national system of payment cards to safeguard financial operations in the country. The director of the Central Bank's National Card Payment System (NCPS) department, Timur Batyrev, has stated that the first batch of such cards is to be issued in the third quarter of 2015.
The initial task facing the NCPS is to provide technical and technological independence for Russian payments, according to Central Bank Chairwoman, Elvira Nabiullina.
"The second stage considered by the Central Bank is the issue of its own payment cards. These payment cards are to become attractive for people, for users, because there are various payment cards in the world. That's why the card will be developing along with the other ones," Nabiullina said in August.
The Central Bank has announced a plan to issue 100 million national payment cards over the next two years. However, it is not clear yet whether holders of such cards will be able to use them outside Russia.
SWIFTS FATE IN RUSSIA REMAINS UNCLEAR
Back in September, the European Parliament urged the EU member states to consider excluding Russia from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) financial transaction system, which provides the infrastructure for $6 billion in interbank operations every day.
In response the CBR said that alternative channels of interbank communications may replace SWIFT in Russia.
Earlier in December, the Central Bank announced that it had launched a service allowing credit institutions in all of Russia's regions to transfer messages in SWIFT format without any restrictions.
