Russia’s Central Bank is preparing to abandon its deadline for MasterCard and Visa to pay transaction security deposits because neither has yet selected a partner to process cards in Russia next year, according to a report Thursday (Aug. 14) in Russian business daily Vedomosti.
“Under current law, the systems must pay security deposits equaling 25 percent of their average daily turnover to the central bank by October 31, but the deposits can be reduced to zero if the systems find a partner among nationally important card operators,” the story reported.
The story said that Vladimir Komlev, head of the National Payment System, told a Russian payment systems vendor that the deadline “can be shifted. A director of a card processing department at a large bank also heard about changing the deadline.”
This is all part of the fallout from tense diplomatic back-and-forth—including U.S. and European Union sanctions—between Russia and the U.S., which has had several ripples in the global payments space. In May, President Vladimir Putin signed a law ordering a “national payment system” as retaliation for MasterCard and Visa halting service of payment cards of some major Russian banks based on those international sanctions. “Soon after the new law was signed, Visa and MasterCard were told to pay deposits amounting to hundreds of millions of dollars,” the story noted. “Currently, Visa and MasterCard are holding tenders to choose a local partner.”