MasterCard has agreed to transfer card processing inside Russia to the National System of Payment Cards (NSPC) while Visa is still discussing the matter with the authorities, Interfax.ru reported, citing the Central Bank’s press service.
MasterCard’s move will not affect cardholders, Interfax quoted a MasterCard representative as saying. The company previously used its own processing system, which is located outside Russia.
Following a law passed this past spring and subsequent negotiations, Visa and MasterCard were given the choice between processing transactions via the national payment system under completion or paying to the Central Bank a security deposit of several billion US dollars.
The deadline for companies to switch to the local system is the end of March.
The issue of a national payment system came to the forefront after the United States imposed sanctions on some Russian banks in March, causing Visa and MasterCard to refuse to service their bank card transactions.
In response, Russian President Vladimir Putin ordered the creation of a national payment system. He gave the example of Asian countries, especially China and Japan, whose systems were able to compete with Visa and MasterCard both domestically and regionally.
According to Central Bank data, 217 million cards have been issued in Russia. Furthermore, 95% of them are associated with international payment systems like Visa and MasterCard and 90% of the settlements made using the cards are within Russia.