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Newcomer Zolotaya Korona bids for national payment system crown

May 05, 2014, 13:22 UTC+3 MOSCOW
Korona is 80% ready to run the payment process
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© ITAR-TASS/Denis Abramov

MOSCOW, May 05. /ITAR-TASS/. Competition for the status of Russia's planned national payment system (NPS) - under way since Visa and MasterCard stopped serving Russian banks - looks to have taken a new turn.

Newcomer Zolotaya Korona, translating as Golden Crown, is a more viable candidate than hitherto the apparent lead contender Universal Electronic Card (UEC), finance sector observers say, citing a report from Russian daily Kommersant.

Yet some hindrances are said to hinder Korona’s wearing the crown, the paper comments, referring to an assessment by auditors KPMG on behalf of Russia's Central Bank, now conducting its own analysis of options available. Audit results went to the regulator on April 30 but comment has yet to be made public.

The options are to establish a system from scratch or build on the basis of already operating players such as UEC, Kommersant says. Sberbank is its major shareholder with 45%, while Korona, based in the Siberian city of Novosibirsk, is incorporated into the Center of Financial Technologies group of companies.

KPMG is said to believe Korona is 80% ready to run the payment process, though adjustments are needed in areas such as constructing an additional third data centre to provide stability in emergencies.

Absence of a process for additional security of online payments is another key reported disadvantage. Elimination of these and other drawbacks will take Korona from three to six months to achieve, the auditors are cited as noting.

UEC is said to have estimated its own readiness to operate as the national system at 40%, still reported as facing significant processing tasks including construction of second, backup, and third, disaster-proof, data centres.

Though Korona is calculated in many respects as better equipped than UEC, the extent to which Korona's other businesses, notably its money transfer system, can be separated from technologies the CBR needs is unclear. The firm's chairman, Nikolai Smirnov, says the issue remains open but says this spin-off is technically plausible.


Russia's national payment system

President Vladimir Putin said in March that Russia would create its own payment system. “These systems work successfully in such countries as Japan and China. They started off as national systems for domestic needs only but are now becoming increasingly popular,” he said.

The Japanese system now operates in 200 countries. “Why shouldn’t we do the same? We should and we will,” Putin said at a meeting with the leadership of the Federation Council, the upper house of parliament.

The Central Bank of Russia is already making plans for creating a national payment system in the country.

“We should create a system that will ensure uninterrupted domestic payments that make up about 90 percent of the total. We are preparing measures that should be realistic, unburdensome and gradual. At the initial stage we should ensure technological compatibility between processing and operating centres of major banks so that they could switch over quickly,” Central Bank Chair Elvira Nabiullina said.

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