In response to Visa and MasterCard’s decision to stop providing financial transaction services to clients of Rossiya Bank, Sobinbank and SMP Bank, after the banks were designated under US sanctions, Russian president Vladimir Putin has enacted strict regulations on international payment systems operating in Russia.
The regulations, promulgated on 5 May 2014, require international payment systems operating in Russia to establish a processing centre in Russia and to maintain their provision of services to Russian clients. To encourage compliance with the regulations, a security deposit amounting to the average value of two days’ worth of transactions will have to be deposited at Russia’s central bank. Non-compliance may result in the daily forfeit of 10% of the security deposit. In 2013, Visa and MasterCard processed approximately $1.9 billion in transactions per day between them.
The regulations also provide for the creation of a domestic cashless transaction system by 1 July 2014.