Russia demands $3.8bn security deposit from Visa and Mastercard [View all]
Source: Guardian
International credit card companies face a "severe impact" on their operations in Russia following a strict new law Moscow has adopted in response to Visa and Mastercard freezing service to banks under US sanctions.
Visa described the regulations as "unprecedented" and Mastercard said it could experience difficulties, the Russian magazine Snob reported, after Vladimir Putin signed a law on Monday to create a rival national payment system.
The law stipulates the creation of a homegrown system to facilitate cashless transactions by 1 July, but also imposes stiff new requirements on international payment systems operating in Russia.
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The new law forbids international payment systems from cutting off services to Russian clients and obliges them to base their processing centre in Russia. To ensure their good behaviour, international operators will have to place a security deposit in Russia's central bank equal to the average value of two days' worth of transactions.
Visa and Mastercard together processed $1.9bn (£1.12bn) in transactions per day last year – 90% of all cashless payments in Russia – equal to a $3.8bn security deposit, the Moscow Times reported.
Read more: http://www.theguardian.com/world/2014/may/06/russia-security-deposit-visa-mastercard-sanctions-ukraine
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