BOFIT Weekly Review 2015/19
Russia launches its own national card payment system
Russia moved ahead with its own card payment system after Visa and MasterCard blocked payment processing for US-sanctioned Russian banks amidst the Ukraine crisis in March 2014.
To avoid interference with domestic payment transactions, the Duma amended the law on payment systems to require that all card transactions taking place in Russia be processed in Russia’s national processing system. After that, Russia began to erect the physical system needed for the processing of card transactions. Credit card companies had until end-March this year to migrate to the new system.
Visa and MasterCard, which account for 95 % of Russian card payments, are currently migrating their payment processing operations to the Russian system. They were prompted to move on rapidly with the transfer, as according to the law, a credit card company processing its transactions outside Russia will have to deposit such a large collateral guarantee with the CBR that it would make its operations in Russia unprofitable.
Russian officials say the next step in the creation of the national payment card system is the issue of a Russian credit card by the end of this year. The long-term goal is to gain international circulation for the Russian credit card.