Officials aim to ease regulations to insure MasterCard and Visa stay in Russia
In a sensible and strategic move, the Russian government has taken action to prevent the 2 largest card firms in the world, MasterCard and Visa, from leaving the Russian market.
Due to the crisis in the Ukraine, MasterCard and Visa were forced by US officials to freeze operations in Russia as part of sanctions brought upon the region by the US government. Shortly after, operations were resumed partially by the card firms. However, due to the possibility of having such a freeze out occur again, President Vladimir Putin took action against non-local payment institutions, by instilling new regulations and working towards establishing a new national payment scheme.
Abiding by the new regulations, MasterCard recently began looking for a local Russian payment solution to process its card Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term. Another Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term, to which none of the card companies have yet to abide by, is the deposit of collateral with Russia’s central bank worth two days of their average processing volume in the region, in eight quarterly installments.
Both MasterCard and Visa showed intent on leaving Russia due to the harsh requirements. Even with its own national payment solution, the absence of MasterCard and Visa would create a large financial hole in Russia. In order to prevent the card companies from abandoning the Russian market, government officials reached out, informing them the laws and regulations would be softened.
This last Wednesday, June 18th 2014, after discussing amendments to ease regulation compliance, First Deputy Prime Minister Igor Shuvalov stated the required deposit will be “significantly reduced”.
“We expect that the actions we are taking will calm the situation with Visa and MasterCard. We will do everything to make sure they keep their activities here,” Shuvalov added.
According to analysts from Morgan Stanley, the current regulation would require Visa and MasterCard to deposit estimated amounts of $1.9 billion and $1 billion respectively. All together Russia is responsible for less than 4% of both firms global revenue.
In a sensible and strategic move, the Russian government has taken action to prevent the 2 largest card firms in the world, MasterCard and Visa, from leaving the Russian market.
Due to the crisis in the Ukraine, MasterCard and Visa were forced by US officials to freeze operations in Russia as part of sanctions brought upon the region by the US government. Shortly after, operations were resumed partially by the card firms. However, due to the possibility of having such a freeze out occur again, President Vladimir Putin took action against non-local payment institutions, by instilling new regulations and working towards establishing a new national payment scheme.
Abiding by the new regulations, MasterCard recently began looking for a local Russian payment solution to process its card Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term. Another Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term, to which none of the card companies have yet to abide by, is the deposit of collateral with Russia’s central bank worth two days of their average processing volume in the region, in eight quarterly installments.
Both MasterCard and Visa showed intent on leaving Russia due to the harsh requirements. Even with its own national payment solution, the absence of MasterCard and Visa would create a large financial hole in Russia. In order to prevent the card companies from abandoning the Russian market, government officials reached out, informing them the laws and regulations would be softened.
This last Wednesday, June 18th 2014, after discussing amendments to ease regulation compliance, First Deputy Prime Minister Igor Shuvalov stated the required deposit will be “significantly reduced”.
“We expect that the actions we are taking will calm the situation with Visa and MasterCard. We will do everything to make sure they keep their activities here,” Shuvalov added.
According to analysts from Morgan Stanley, the current regulation would require Visa and MasterCard to deposit estimated amounts of $1.9 billion and $1 billion respectively. All together Russia is responsible for less than 4% of both firms global revenue.