Russia Helps Visa and MasterCard to Charge Ahead
But even more than today's profits Joshua Simmons, a Policy Counsel at Global Financial Integrity, says that the companies are sowing for the future.
"Russia's a very large developing market," Simmons speculated, "Their economy is growing. There are a large number of customers who are seeing their wealth increase and so Visa and MasterCard don't want to be shut out of that market."
Factors were working to make it more difficult for Visa and MasterCard to do business in the largest country in the world. First is, the ongoing US sanctions which even though they were narrow and targeted created a potential minefield especially arduous for an American company.
"They're simply cutting off all customers of the banks that have been affected by the sanctions." Simmons said, acknowledging that if any cardholders own a Visa or MasterCard that could cause much greater difficulty for the financial companies to process and could cost the companies millions in figuring who bought what stick of gum.
Another averted problem, was Moscow's insistence on a NFC chip, a comprised identification chip, be installed in every card. The problem wasn't the chip itself, but the demand that the chips be Russian made. But when Visa and MasterCard balked, citing financial concerns, Russia recanted suggesting that both the financial companies and Moscow interests are shared.
"The Russian Central bank has started to develop its own competing national payment system, but setting up any kind of payment system like that is an extremely complex undertaking and takes a long period of time," Simons said, adding that the departure would cause chaos that could hurt the credit card companies’ stock price and Russia.
Luckily, the partnership remains intact with Visa, MasterCard, and Moscow all shouting, "charge!"