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Bill Gives Visa, MasterCard Reprieve Until Oct. 31

Published: June 26, 2014 (Issue # 1817)



  • Visa and MasterCard together process about 90 percent of payments in Russia.
    Photo: Maxim Stulov / Vedomosti

International payment systems Visa and MasterCard could get a reprieve until Oct. 31 on a security deposit of up to $2.9 billion that the Russian government has demanded they pay if they are to continue operating in Russia.

According to a draft bill by the Finance Ministry published Wednesday on the government's legislation portal, payment systems operating in Russia can be freed from the obligation to pay a security deposit until Nov. 1 this year — on one condition. To receive the exemption, the companies will need to stop providing information about money transfers carried out in Russia to clearing centers abroad.

The Federation Council on Wednesday approved a bill giving the government the right to set the details for Visa and MasterCard's payment of the security deposit, Vedomosti reported.

Visa and MasterCard, who together process about 90 percent of payments in Russia, fell victim to international tensions in March after they cut services to two Russian banks in order to comply with U.S. sanctions imposed following Russia's annexation of Crimea.

President Vladimir Putin soon after called for the creation of a national payment system to cut Russia's dependence on companies subject to the political policies of foreign governments. Signed into law in early May, the legislation also requires international payment systems to submit a massive security deposit to Russia's Central Bank in order to continue operating in Russia.

The deposit, estimated by Morgan Stanley at $2.9 billion, is five times more than Visa and MasterCard's joint annual revenues in Russia — a country that accounts for less than 4 percent of the companies' global revenues — and analysts suggested that the two companies might be better off simply leaving the market altogether. Under the law, the payment systems would also have to build processing centers in Russia and pay fines of up to 10 percent of the funds held by the Central Bank in the event of a unilateral denial of services.

The State Duma last week began discussing amendments to soften the law, and First Deputy Prime Minister Igor Shuvalov said that the deposit payments will be "substantially reduced."

MasterCard meanwhile said that it was looking for a Russian partner to process payments within the country, which could help the company sidestep the law. Visa, however, said that the requirement to pay the massive security deposit is "unworkable," Reuters reported.





 


ALL ABOUT TOWN

Sunday, Dec. 21


The Zenit St. Petersburg basketball team returns to the northern capital this evening for a matchup with Krasny Oktyabr, a Volgograd-based basketball club. Tickets for the game, which tips off at 6 p.m. this evening, can be purchased on the club’s website or at their arena, Sibur Arena, on Krestovsky island.


Satisfy your sugar cravings during Sweet New Year, an ongoing seasonal festival at the Raduga shopping center. Each weekend of December will welcome hungry visitors to taste hundreds of different kinds of desserts. Workshops are open to visitors and seasonal gifts can also be purchased for those rushing to finish their New Year shopping.



Monday, Dec. 22


Pick out the latest fashions as holiday gifts for loved ones or as early presents for yourself during the Christmas Design Sale at Kraft on Obvodny Kanal, starting on Dec. 20 and continuing through Dec. 27. Designer clothes will be on sale every day of the week or you can buy something more festive to decorate the home while sipping on hot coffee and perusing the various master classes.



Tuesday, Dec. 23


Meet Arctic explorers Fedor Konukhov and Viktor Simonov during SPIBA’s and Capital Legal Service’s event “Arctic Expedition” this morning in the Mertens House business center at 21 Nevsky Prospekt. The meeting will discuss the explorers’ ongoing eco-social project and how companies can use the project as a unique marketing opportunity. Email office@spiba.ru by Dec. 22 if you wish to attend.



Wednesday, Dec. 24


The Anglican Church of St. Petersburg we will be holding a Christmas Eve service at 7 p.m. led by Rev Wm. Shepley Curtis of the Episcopal Church. The service will be held at the Swedish Church at 1/3 Malaya Konyushennaya Ulitsa.



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