Russia will find an alternative to the Visa and MasterCard payment systems if they refuse to work in the country, Foreign Minister Sergei Lavrov said.
He told Bloomberg on Wednesday, May 14, that Visa and MasterCard were already worried that they might lose the Russian market.
These are virtual money and transactions and, as everything virtual, can be recreated especially now that Russia and other countries have enough specialists in this field, Lavrov said.
President Vladimir Putin has admitted that with no payment system of its own Russia is dependent on its partners.
“We have always believed that our partners, both Visa and MasterCard, are depoliticized economic entities and companies. However, as it turned out, they, too, are under strong political pressure and influence and give in to it right away,” he said.
“From the economic point of view, this is a big mistake because MasterCard and Visa control 90% of the Russian market, which we gave to them of our own free will, and all payments inside the country go through these systems and to a large extent through serves located in the United States. But that’s nonsense! Why did Japan do it and can use a national payment system now, but we are using their [American] systems inside the country, I am not saying abroad where you go on a business trip or vacation,” Putin said
“This is a very big business for these companies. By acting the way they are acting in Russia, they are undermining trust in themselves and therefore will certainly lose the market,” he said.
At the same time, he noted that the Russian authorities were not planning any retaliatory sanctions against MasterCard or Visa. “However not only have we thought about it but we have also started creating our own national payment system,” Putin said.
Putin said in March that Russia would create its own payment system. “These systems work successfully in such countries as Japan and China. They started off as national systems for domestic needs only but are now becoming increasingly popular,” he said.
The Japanese system now operates in 200 countries. “Why shouldn’t we do the same? We should and we will,” Putin said at a meeting with the leadership of the Federation Council, the upper house of parliament.
The Central Bank of Russia is already making plans for creating a national payment system in the country.
“We should create a system that will ensure uninterrupted domestic payments that make up about 90% of the total. We are preparing measures that should be realistic, unburdensome and gradual. At the initial stage we should ensure technological compatibility between processing and operating centers of major banks so that they could switch over quickly,” Central Bank Chair Elvira Nabiullina said.
In 2011, several MPs called for creating a domestic processing centre. The relevant law was adopted but processing operations were not transferred to Russia despite the risk of losing access to international payment systems for Russian banks. This is precisely what happened on March 21, 2014 when Visa and MasterCard, both headquartered in the United States, suspended operations for several Russian banks.
The blocking of access to the SWIFT inter-bank payment system makes online payments in any currency, except the national one, impossible.
Presidential adviser Sergei Glazyev has suggested creating a single processing centre for payments within the Commonwealth of Independent States and the Customs Union created by Belarus, Kazakhstan and Russia.