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Russian government plans alternative to Visa/Mastercard

0 2 May 2014

The Russian parliament has passed a bill that paves the way for a Russian national payment system as an alternative to Visa and Mastercard. 

The bill amends Law No.161-F3 “On the National Payment System” in order to facilitate electronic and card transactions within the national system. To make the system work, a new clearing centre will be established that is to belong entirely to the Central Bank. After two years, the Central Bank will have the option of selling up to 50% of the clearing centre, but it will maintain veto power and no individual or company will be permitted to own more than 10%. 

From 1st July 2016 all transactions in Russia will be legally obliged to use this Russian payment infrastructure - meaning that clearing centers must not be located abroad. The only exception to this rule is international transactions.

Visa and Mastercard are by far the most popular forms of card payment in Russia. Visa is accepted by more than 99% of establishments that accept cards, while 98.5% accept Mastercard. The leading Russian card provider, Zolotoya Korona, is accepted by just 14% of card-accepting businesses. 

The decision to create a national payment system came after US sanctions related to Russia’s actions in Crimea led to Visa and Mastercard blocking cards issued by banks belonging to individuals on the US sanctions list. 

These include Bank Rossiya and its subsidiary Sobinbank, which are owned by Yuri Kovalchuk, and also SMP Bank and InvestCapitalBank, which belong to brothers Boris and Arkady Rotenberg. 

Source: CNews

Upper Image via: Shutterstock

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