International payment systems Visa and MasterCard are ready to establish their own infrastructure in Russia, news agency RIA Novosti reports citing Russia’s Finance Minister Anton Siluanov. The policy maker said Visa and MasterCard reps called on the Kremlin to facilitate their negotiations to integrate their daughter companies into the national payment system within one year and six months.
According to the Finance Minister, both companies are keen to keep their activities in Russia despite their discontent with the new national payment system law, hefty security deposits in particular. Nowadays, several foreign banks operate through their subsidiaries in Russia. The Russian legislation forbids overseas lending institutions to operate in the Russian banking sector. However, the problem is tackled by founding a daughter company conforming to the Russian central bank’s regulations.
Earlier, the State Duma agreed to amend a provision for security deposits in the law wording and delegate the power to set a deposit size to the watchdog and government. Initially, the law suggested that the security deposit size would be equal to 25% of an average daily payment amount in Russia. However, Visa and MasterCard replied that such huge security deposits would exceed considerably their annual revenues in Russia.
According to flash estimates, both companies could incur more losses withdrawing from Russia than operating under the new law. For example, MasterCard willing to maintain its business in Russia might lose $1.9 billion. However, giving up its activities in Russia would cost it $350-470 million.
The law on the national payment system was passed after foreign payment operators had started blocking cards issued by the Russian banks impacted by the Western sanctions. Thus, the Kremlin decided that Visa and MasterCard are too vulnerable to withstand political pressure from the Western powers.