Visa Reaches Deal with Russia Over Payment System

By Alexander Kolyandr 

MOSCOW-- Visa Inc. will transfer the processing of transactions made on its cards in Russia to a local payment system, Russia's central bank and the company said Thursday.

The international credit and debit card company follows MasterCard Inc., its peer, who signed a similar agreement at the end of December. The Bank of Russia will act as a settlement office.

The move comes almost a year after President Vladimir Putin backed plans for Russia to create its own national payment system to protect itself against the kind of disruption caused when Visa and MasterCard cut ties with Russian banks hit by U.S. sanctions over the annexation of Crimea.

The disruption caused Russia's lower house of parliament to pass a law that required all payment transactions in the Russian Federation to be processed within the country.

"Since the passing of the amendments to the Russian National Payment System law, Visa has been working with the Central Bank of Russia to find a mutually agreeable solution for domestic processing in Russia. ..We are grateful to our colleagues for all their efforts and we appreciate their professionalism and cooperation." said Andrew Torre Visa's country manager for 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.

Write to Alexander Kolyandr at [e-mail]

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