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“We have announced a public tender to look for a partner and more than 20 companies have already filed their proposals. We hope to select the best of them shortly,” Ilya Ryaby, head of MasterCard Russian Office, wrote in his blog on Thursday, July 3.
MasterCard shares the Russian government’s intention to reduce the volume of cash operations in favor of electronic transactions but “the initial requirements of the new law were not compatible with our business model”, Ryaby said, referring to the large size of security deposits the company is supposed to make at the Central Bank.
On June 17, MasterCard announced a tender for the provision of inter-bank processing services in Russia in hope to find a local supplier of clearing, authorization and settlement services inside Russia. Potential bidders have to be listed in the Central Bank’s registry of payment system operators and have their own processing centre in Russia.
Central Bank Chair Elvira Nabiullina said the size of the deposits for Visa and MasterCard would be reduced to zero if they found local partners in Russia until October 31, 2014.
First Deputy Prime Minister Igor Shuvalov said earlier that the security deposit for Visa and MasterCard would be reduced but not abolished altogether.
“The steps we are taking will calm them down, both Visa and MasterCard,” he said. “If they want to close down their businesses in Russia, it’s up to them, but we are doing our best for them to keep working here,” Shuvalov said.
He noted that the Russian government had no plans to impose restrictions on the work of foreign payment systems in the country.
The change in the format of work for international payment systems in Russia was necessitated by the creation of a national payment system in the country following Visa’s and MasterCard’s decisions to turn off their processing services for several Russian banks affected by US sanctions.
The Russian government and international payment systems have reached a compromise that the latter will create relevant structures in Russia and integrate them into the national payment system so that all domestic transactions could be processed by the national system and international ones by Visa and MasterCard as before.