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State Banks Eye Russia's $740Bln Plastic Card Market

Published: April 4, 2014 (Issue # 1804)



  • Sberbank's offer to create a national payment system was not supported by the Central Bank.
    Photo: Ekaterina Kuzmina / For Vedomosti

As top government officials speed up the birth of a national credit card system in an asymmetrical response to U.S. sanctions over Russia's incorporation of Crimea, major state banks are eyeing their share in the multi-billion dollar financial transactions market.

President Vladimir Putin has supported German Gref, the CEO of Russia's largest lender Sberbank, who offered to create a national payment system based on the existing Universal Electronic Card, or UEC.

Putin ordered the prime minister to review all the possibilities of using the UEC, followed by a corresponding decree of the Cabinet to the key ministries. Officials are to report of the results of their evaluations by mid-April, Kommersant reported Thursday.

The UEC started to be issued to Russian citizens beginning from 2013 and initially was meant to replace the existing internal passport. Besides carrying all the necessary personal data, it is possible to make payments with the card as with a regular plastic. About 300,000 of these cards, powered by Sberbank's PRO100 payment system, have been issued so far and they are accepted by most cash machines and acquiring terminals across the country.

Top government officials have repeatedly said the national payment system was a must-have as a necessary means of security against sudden malfunctions of international payment systems.

At the end of March, Visa and MasterCard stopped providing services for payment transactions for the clients of Bank Rossiya and SMP bank, co-owned by brothers Boris and Arkady Rotenberg, allegedly Putin's close allies. The taken measure was reportedly part of U.S. sanctions against the Russian annexation of Crimea.

"National payment systems exist in many countries and Russia should think of one as well," said German Gref following the incident, adding that Sberbank has own system that is up to the task. He said the system could be applied across the country within several months after adjusting legislation.

Currently, Visa and MasterCard take up, respectively, 60 and 35 percent of Russia's credit card market, which according to the Central Bank saw almost 26 trillion rubles ($740 billion) worth of transactions in 2013.

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ALL ABOUT TOWN

Friday, Jan. 30



The Lermontov Central Library, 19 Liteyny Prospekt, will screen 'Almost Famous’ in English with Russian subtitles at 6:30 p.m. Cameron Crowe's Academy Award-winning comedy from 2000 stars Billy Crudup, Kate Hudson, and Patrick Fugit, and tells the story of a budding music journalist at Rolling Stone magazine in the 1970s. Admission is free.



Meet renowned Russian poet, journalist and writer Dmitry Bykov, famous for his biographies of Boris Pasternak, Bulat Okudzhava and Maxim Gorky, and winner of 2006 National Bestseller Award. Bykov will read old and new poems as well as answer questions about his works at the St. Petersburg Philharmonic, Main Hall, at 7 p.m. Tickets start at 1,000 rubles and are available at city ticket offices and the from the Philharmonic website www.philharmonia.spb.ru.



A retrospective of the films of Roman Polanski starts today at Loft-Project Etagi, 74 Ligovsky Prospekt, with a screening of ‘Repulsion’ at 7 p.m. and ‘Rosemary’s Baby’ at 9:15 p.m. The series runs through Feb. 4 and will include Polanski's eminently creepy ‘The Tenant,’ the cult comedy ‘The Fearless Vampire Killers’ and ‘Cul-de-sac’ among others. Tickets are 150-200 rubles and the complete schedule is available at www.vk.com/artpokaz/



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