MasterCard Reaches Deal with Russia

By Andrey Ostroukh 

MOSCOW-- MasterCard Inc., an international payment system company, has reached an agreement with Russian authorities to process its payments in Russia, the central bank said Monday.

MasterCard and Russia's national payment system agreed on Dec. 30 to gradually move the processing of the U.S. company's transactions within Russia under the roof of its Russian counterpart, the central bank said. The Bank of Russia will act as a settlement office.

The move comes some months after the first Western sanctions hit Bank Rossiya, which the U.S. Treasury Department said is a personal lender for senior Russian officials. After a sanctions-related issue with Visa and MasterCard, Russia's lower house of parliament said that all the payment transactions in the Russian Federation should be processed within the country.

But both Visa and MasterCard said they would like to continue operations in Russia, and are now in cooperation with the Bank of Russia.

A Russian finance minister official told The Wall Street Journal last May that the government wanted to create a payment system akin to the existing systems in France and Turkey. In those two countries, global card providers work together with their local peers, processing transactions together.

MasterCard and its peer Visa Inc. couldn't be immediately reached for comments.

Write to Andrey Ostroukh at [e-mail]

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