Russian Prime Minister Dmitry Medvedev said earlier this week the Russian government must cooperate with card companies Visa and MasterCard in building the country’s national payment system.
“To do this, we have taken a number of steps, including changes in the law on the national payment system… which caused heated discussion,” Medvedev said, according to RIA Novosti. “According to this law, a number of economic measures to protect the interests of citizens and banks, with features making appropriate resources and application of those or other penalties as are prescribed by this document, must be installed by the Russian government.”
In late March, after Crimea was annexed to Russia, Visa and MasterCard halted their operations for cardholders at certain Russian banks as a result of U.S.-imposed sanctions. Last month, Russian President Vladimir Putin signed a bill into law establishing a national card payment processing system in response to the service interruption.
Under the new law, beginning July 1, payment system operators outside Russia are subject to stricter clearing and settlement requirements. Foreign payment operators are required to make quarterly contributions of 25 percent of average daily turnover to the country’s central bank, and they face penalties for unilateral termination of services, RIA Novosti reports.
Medvedev said that while the national payment system will be independent through its use of Russian technology, its infrastructure should empower clients to protect information on the system from unauthorized access.
Visa initially said the requirements were excessive—in particular, the security contribution requirement—and originally threatened to leave the Russian market.
Russian authorities, however, have since said they are willing to soften the requirements for international payment processors, and Visa said it would remain in the country to create a subsidiary to hold all Russian domestic transactions, according to RIA Novosti.