Visa and MasterCard plan to continue to operate in Russia, following compromise agreements with the Russian government in the wake of the sanctions imposed on the country due to the ongoing Ukraine/Crimea tensions in the region.
Visa and MasterCard plan to continue to operate in Russia
Following the imposition of economic sanctions against Russia in March this year, Visa and MasterCard both stopped processing card transactions for certain Russian banks. Russian president Vladimir Putin responded with counter-sanctions, including a requirement for Visa and MasterCard to pay nearly $4 billion in deposits to Russia’s central bank if they wished to continue operating in the country. Putin also stipulated the establishment of a Russian domestic payment system.
Subsequently, Visa and MasterCard expressed concern about the consequences of the rules adopted by the Russian parliament, but according to the agreement reached with the Russian authorities, Visa and MasterCard will set up domestic operators within Russia to serve customers. These domestic operators will not transfer payment-related data to processing centres placed under foreign jurisdiction, and they will not be affected by the decisions of foreign governments, such as the recent sanctions. These local operations will be connected to the national payment system, which is expected to be in place by 2016. Russia’s national payment system will be open to other foreign payment operators, including China UnionPay and Japan’s JCB.
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