Card scheme: Visa and MasterCard excluded from Russian domestic network?
- The recent Russian “National Payment System” law induced significant lobbying on the part of MasterCard and Visa. According to Wikileaks documents, further on relayed by financial media, the two international card schemes asked American authorities to put pressure on Russia in order to try to escape this law which does not advantage them.
- This project was accepted last November and sets up a National Payment Card System (NPCS), managed by a consortium composed of State banks, which would collect four billion dollars commissions per year. Visa and MasterCard now hold 85% of this market.
- This project would disadvantage them as they would have to adhere to this new scheme to process international transactions only, or, ex nihilo, build a rival domestic scheme. The induced cost is such that the two schemes now consider leaving the country.
- The NPCS was founded on China UnionPay's example and aims to help Russian national card payment regain sovereignty. The projects would block card industry's functioning, as is the case in France.
- The bill also makes it more difficult to obtain an authorisation to provide payment services. Improving the reliability of this scheme would probably also improve customers’ confidence in it and increase card use. This promising market could the escape the two American schemes. They now have to face threats on their domestic revenue (see above) and may lose other significant markets. In addition to China and Russia, India is currently elaborating its own national scheme, and Europe, also pursues this same objective, even though in a less efficient manner.
See November-December 2009 Watch (IndiaPay)