Russia sets deadline for Visa, MasterCard: October 31, 2014

That’s the new deadline set by Russia for foreign service providers – including Visa and MasterCard – to make a necessary security deposit in order to keep operating in that nation. Foreign payment service providers like Visa and MasterCard have to make the deposit by October 31 or face suspension of their operations in Russia, the Vedomosti newspaper reports citing a government draft decree. However, the providers would be spared the necessity to make such a deposit if they agree to conduct local processing operations in Russia and not abroad.

According to proposals published on the website of Russia’s Central Bank, quoted by pymnts.com, the service providers will need to start making payments on a $3 billion total fee. However, Visa and MasterCard can reportedly cut down on the size of the payments if they relocate their processing centers to Russia before the deadline hits.

However, representatives for both Visa and MasterCard claim that it is either unprofitable for them to organize their own processing centers in Russia or it contradicts their internal regulations.

“The basic option which would allow Visa and MasterCard to continue operating in Russia implies partnering with a local payment system to process local transactions,” a man familiar with the draft’s formation explained to The Voice of Russia. “At the moment, none of the local payment systems could handle acquiring or provide 3D-secure.”

Visa and MasterCard have been all the buzz in Russia lately, as Russian President Vladimir Putin recently approved amendments to new legislation he signed into law that had put their operations there in jeopardy.

According to The Voice of Russia, Vedomosti reported last week that Visa and MasterCard are holding talks with the country’s own payment platforms and processing companies. Both systems’ representatives are saying that it is either unprofitable for them to organize their own processing centers in Russia or it contradicts their internal regulations, sources cited by the newspaper said.