More Russian Banks Face Problems With Visa, Mastercard

MOSCOW--A number of further Russian banks faced problems with international payment systems Visa Inc. (V) and Mastercard Inc. (MA) Friday, as the U.S. placed sanctions on Bank Rossiya in connection with the annexation of Crimea.

Visa and Mastercard said they will stop servicing Bank Rossiya and three more banks connected with it--Sobinbank, InvestCapitalBank and SMP Bank.

"In order to comply with the U.S. law Visa International Service Association is obliged to cancel access of those banks to Visa network", Visa said.

Mastercard issued a similar statement.

The holders of these banks' cards can't pay for goods and services using their cards, but can use the cards to withdraw cash from the bank's ATMs or ATMs of other Russian banks serviced by the United Payment Service, also known as ORS, a national net which unifies dozens of banks.

The ORS spokesman said the system is servicing all the cards without exception.

However, more banks are affected by the payment systems' decision, as the affected banks were processing transactions for third party banks.

FinService Bank said it's Visa and Mastercard cards aren't being accepted by retailers, as its cards were processed by one of the affected banks.

Visa said the problems may extend to shops and services which used the affected banks to process card payments.

The full list of banks and retailers that may face difficulties isn't available.

Alexander Shokhin, who heads the Russian Union of Industrialists and Businessmen said the banks affected by Visa and Mastercard decisions should either change the owners, or switch to other payment systems.

Parliament's Head of the Financial Markets Committee Anatoliy Aksakov told Prime news agency the banks may solve the problem by moving to the China UnionPay system.

Russia has long been considering the creation of a national banking payments system, but hasn't developed it yet.

Write to Alexander Kolyandr at [e-mail]

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