MasterCard and Visa reportedly will continue operating in Russia after all, as Russian President Vladimir Putin approved amendments to recently enacted legislation he signed into law that had put their operations there in jeopardy.
The announcement should not come as a surprise, as both networks two weeks ago indicated they planned to stay, despite having to pay a hefty deposit.
According to Russia’s daily Kommersant, Putin approved amendments to a law that was introduced in response to Western sanctions against various Russian banks that led the two networks in March to stop offering services to customers of SMP-Bank and Bank Rossiya. The U.S. government issued the sanctions after Russia reunified with Crimea.
According to published reports, Putin, government officials and the country’s central bank decided in a closed-door meeting that articles in the new law mentioning sanctions be deleted. Visa and MasterCard, however, are still obligated to pay a combined $3.8 billion in deposits to the central bank, an amount equal to the sales the networks process over a typical 48-hour period.
Under the new law, both companies had until July 1 to decide whether to stay operating in Russia and pay the required deposit.
Representatives from both networks did not get back to PYMNTS.com to confirm the latest developments or comment on them.
Putin continues to push for a national system that could resemble Japan’s JCB or China’s UnionPay, which operate both in their own countries and internationally via partnerships. However, such a such could take up to two years to create. So, at least for now, working with Visa and MasterCard through what otherwise is a political issue was something Putin had to do to avoid leaving thousands of Russian cardholders out in the cold.