According to the new draft law, produced by the Central Bank of Russia, all components of cards, including the microchip, used by the national card payment systems should be made in Russia, Russian newspaper Kommersant reported on Monday.
To meet that condition Visa and MasterCard would have to reissues approximately 175 million of cards.
The Central Bank is entitled to determine the exact amount of the Russian software used in the national card payment system, as well as establish other criteria for the national CPS.
Citing unnamed experts, Kommersant observes that it is impossible for an international CPS to receive the status of nationally significant taking into account the new regulations.
„The transition to Russian-made chips with a local payment application is physically possible,” said a source at one of the payment systems, quoted by the Voice of Russia. The expert pointed out that for such cards to work abroad an international CPS chip would also have to be installed along a Russian one, and stressed that the new regulations do not address that matter.
„Under these circumstances, it will be easier for us to process the Russian systems and receiving less income, without becoming a nationally significant CPS and having to refocus on Russian technology. That would incur significant costs, and even require us to build a processing center inside Russia,” the source added as cited by the newspaper.
Foreign payment service providers like Visa and MasterCard have to make a necessary security 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.
„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. At the moment, none of the local payment systems could handle acquiring or provide 3D-secure,” says a man familiar with the draft’s formation.
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.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
