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Russia has no plans to abandon Visa, MasterCard

May 20, 2014, 13:58 UTC+3 MOSCOW
Visa CEO Charlie Scharf says the company may stop operations in Russia if the international payment systems are obliged to make guarantee payments of hundreds of millions of dollars
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© AP Photo/Michael Probst

MOSCOW, May 20. /ITAR-TASS/. International payment system Visa may stop operations in Russia if the international payment systems are obliged to make guarantee payments of hundreds of millions of dollars, Bloomberg reported with reference to Visa’s CEO Charlie Scharf.

Meanwhile, Russia was not going to end cooperation with Visa and MasterCard, Russian Finance Minister Anton Siluanov told journalists on Tuesday.

In April, Russian lower house adopted a law to provide uninterrupted money transfers in Russia and establish a national payment system owned by the Central Bank of Russia (CBR) as a clearing center in the form of an open joint stock company. Within two years since the moment of registration, the CBR will be its sole owner.

The bill followed Visa’s and MasterCard’s blocking cards of the sanctioned bank Rossiya and SMP Bank owned by the sanctioned Rotenberg brothers.

Visa in response said Russia operations might stop if required to pay hundreds of millions of US dollars as collateral deposits with Russia’s Central Bank, Bloomberg business news agency reported.

Russia’s current demands “just go beyond what we’d be willing to do,” Visa chief Charlie Scharf told an investor conference in Boston, USA, on Monday, reported by Bloomberg as adding that “I would hope that we get to a different conclusion..."

Scharf and MasterCard chief Ajay Banga said on Monday they were talking with Russian authorities about changes to the legislation. This requires Visa and MasterCard to place collateral deposits into special accounts with Russia's Central Bank. These equal the value of two-day transactions in Russia, Russian business daily Kommersant reported last week, quoting a limited-access report by US investment bank Morgan Stanley.

Based on total daily turnover of $1.6 billion in cash and cashless card payments in Russia, Morgan Stanley estimated MasterCard being obliged to deposit $1 billion and Visa as much as $1.9 billion with the bank. This compared with net earnings of their Russian units of $160 million and $350-470 million, respectively, the report author's said.

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