Russian president Vladimir Putin said that Russia will set up its own rival payment system to lessen its reliance on Visa and MasterCard, after both companies withdrew services from several banks in compliance with sanctions imposed on the country.
In a meeting with Russian lawmakers, Putin said the Central Bank of Russia (CBR) is ‘working hard’ on the project, in response to Visa and Mastercard suspending services for St. Petersburg-based bank Rossiya, which was specifically targeted by US sanctions, as well as two of its subsidiary lenders.
“It is really too bad that certain companies have decided on restrictions,” Putin added, without specifically naming Visa or MasterCard. “I think this will simply cause them to lose certain segments of the market – a very profitable market.” The two operators handle around 85% of Russian credit card payments between them.
Putin cited Japan Credit Bureau (JCB) and China’s UnionPay as examples of successful card business that were established as domestic companies initially, before developing outside their home countries.
A report carried by radio station The Voice of Russia was also critical of the two companies. “Back in 1998, when the Russian economy was in dire straits, it didn’t take long for both Visa and Mastercard to block all transactions carried out on cards issued by Russian banks,” it commented.
“Both companies also stubbornly refused repeated requests by the Russian authorities to create a processing centre in Russia, so that their bank card transactions could be processed locally.”
Separately, the CBR’s governor, Elvira Nabiullina, said that she hoped any decrease in investment in Russia’s economy would prove short-lived and there was no reason to delay a move to inflation targeting planned for 2015.
“The main task, despite geopolitical instability, is to make the country more attractive to investors and to speed the implementation of an array of reforms,” she told a local investment conference.
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