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National Payment System Given Green Light

Published: April 17, 2014 (Issue # 1806)



  • Visa and MasterCard blocked the banks after either they or their co-owners appeared on a U.S. sanctions list on March 20, drawn up to punish Russia for annexing Crimea from Ukraine.
    Photo: Wikicommons

A national payment system will be created by a new company controlled by the Central Bank, a Cabinet meeting decided Wednesday.

The system will be built from scratch over six months using technology from two existing Russian payment systems, said VTB 24 chief Mikhail Zadornov, who attended the meeting, Itar-Tass reported.

Since MasterCard and Visa abruptly stopped processing the payments of three Russian banks last month, the country has been wringing its hands over the dependence of its financial system on U.S. forbearance.

The companies quickly restored services to two of the banks, but the incident woke Russia up to the fact that if Russia's standoff with the west over Ukraine spikes, Visa and MasterCard, which dominate the Russian payment systems market, could be forced by the U.S. government to abandon Russia, leaving banks and customers in the lurch.

Visa and MasterCard blocked the banks after either they or their co-owners appeared on a U.S. sanctions list on March 20, drawn up to punish Russia for annexing Crimea from Ukraine.

In response, the creation of an independent Russian national payment system has become an issue of national security, its advocates say. President Vladimir Putin called for its creation last month, and amendments obliging banks and payment terminal producers to use it have been submitted to parliament.

On Wednesday, a Cabinet meeting chaired by Prime Minister Dmitry Medvedev delegated responsibility for creating the system to the Central Bank. Adding another line of protection, Zadornov said that by the end of May, Russian banks would create an interbank network to defend themselves against the actions of foreign payment systems.

"The payment system is undoubtedly necessary — not only for banks, but for the country. The risk of bank cards failing due to the will of any other state is absolutely unacceptable," said Yury Bozhor, head of the bank cards department at Otkritie Bank.

But the burst of defensive energy may be misplaced, said another banker. The furore is reminiscent of the French obsession with the Maginot Line in the run-up to World War II, said Maxim Osadchy, head of the analytical department at Corporate Finance Bank. The French built massive fortifications along their border with Germany, but in 1940, when the Germans invaded, they simply outflanked the line by going through Belgium.

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ALL ABOUT TOWN

Thursday, Oct. 30


Dental-Expo St. Petersburg 2014 concludes today at Lenexpo. Welcoming specialists from throughout the federation, the forum is an opportunity for dentists to share tricks of the trade and peruse the most recent innovations in technology and equipment, with over 100 companies hocking their wares at the event.



Friday, Oct. 31


Put your grammar and logical thinking to the test in a fun and friendly environment during the British Book Center’s Board Game Evening starting at 5 p.m. today. The event is free and all are welcome to attend.



Saturday, Nov. 1


The men and women who dedicate their lives to fitness get their chance to compete for the title of best body in Russia at today’s Grand Prix Fitness House PRO, the nation’s premier bodybuilding competition. Not only will men and women be competing for thousands of dollars in prizes and a trip to represent their nation at Mr. Olympia but sporting goods and nutritional supplements will also be available for sale. Learn more about the culture of the Indian subcontinent during Diwali, the annual festival of lights that will be celebrated in St. Petersburg this weekend at the Culture Palace on Tambovskaya Ul. For 100 rubles ($2.40), festival-goers listen to Indian music, try on traditional Indian outfits and sample dishes highlighting the culinary diversity of the billion-plus people in the South Asian superpower.



Sunday, Nov. 2


Check out the latest video and interactive games at the Gaming Festival at the Mayakovsky Library ending today. Meet with the developers of the popular and learn more about their work, or learn how to play one of their creations with the opportunity to ask the creators themselves about the exact rules.



Monday, Nov. 3


Non-athletes can get feed their need for competition without breaking a sweat at the Rock-Paper-Scissors tournament this evening at the Cube Bar at Lomonosova 1. Referees will judge the validity of each matchup award points to winners while the city’s elite fight for the chance to be called the best of the best. Those hoping to play must arrange a team beforehand and pay 200 rubles ($4.80) to enter.



Tuesday, Nov. 4


Attend the premiere of Canadian director Xavier Dolan’s latest film “Mommy” at the Avrora theater this evening. The fifth picture from the 25-year-old, it is the story of an unruly teenager but the most alluring (or unappealing) aspect is the way the film was shot: in a 1:1 format that is more reminiscent of Instagram videos than cinematic art. Tickets cost 400 rubles ($9.60) and snacks and drinks will be available.



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