Putin softens stance on Visa and MasterCard security deposits

A law has been signed by President Vladimir Putin which will give Visa and MasterCard a five-month reprieve on paying a huge security deposit to Russia’s Central Bank.

The two card companies would have had to transfer transaction processing to a domestic partner or pay the security deposit by the end of this month under an earlier law.

Visa and MasterCard set off a movement to end Russia’s dependence on foreign payment systems when they stopped service to two Russian banks in March to comply with U.S. sanctions imposed following Russia’s annexation of Crimea.

The initiative culminated in May with a law that laid the groundwork for the creation of a national payment system and would have required them to submit a security deposit in order to stay in the country, which is estimated to be about $2.9 billion.

After negotiations, amendments were passed allowing the companies to avoid the deposit so long as they found a domestic player to take over processing of their transactions.

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