Russia to introduce national payment card

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The Central Bank of Russia has revealed plans to launch a national payment card that will both rival Visa and Mastercard and create more choice for consumers, according to the country’s officials.

The card, which is the first of its kind in Russia, will use technical infrastructure provided by one of the country’s existing payment systems, with Sberbank’s Pro100 and Zolotaya Korona both being considered as partners. The latter, which means “Golden Crown”, was developed by the Centre of Financial Technologies Group, based in Russia. The chosen operator will clear payments made within Russia using the national card system, but the card will also be valid for payments abroad.

The move was welcomed by Russian Prime Minister Dmitry Medvedev as a way of giving Russian consumers more choice. However, it has also been interpreted as a reaction to financial sanctions imposed by the US over the Ukraine crisis, which led to Visa and Mastercard blocking card operations by Rossiya and SMP banks. Both institutions have been blacklisted by the Obama administration due to close ties between their key shareholders and Russian President Vladimir Putin. In addition to competition created by the national payment card, new rules mean that Visa and Mastercard will have to place collateral deposits into special accounts created at Russia’s Central Bank in order to continue operating in the country.

The national payment card system operator is undergoing state registration,” said Elvira Nabiullina, the Central Bank’s chief. “We have a roadmap for infrastructure development and the Central Bank has set up a commission composed of MPs, senators and government members for finding technological solutions.”

 

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