Russia Prepares to Ditch Visa & Mastercard Ahead of 'Tougher' US Sanctions
The countries lenders have been warned by the Russian central bank
Russia is facing unrelenting sanctions coming next year as the US Congress is set to consider a new package of anti-Russian penalties.
The countries lenders have been warned by the Russian central bank over the potential risk from the sanctions.
The regulator has advised that Russian financial institutions prepare in case their partner-banks are ordered to stop implementing a connection to services by the two most used payment systems across the globe, Visa and Mastercard.
The list of Russia’s banking majors that operate as an intermediary includes Credit Union “Payment Center,” Rosbank that works as a Russian subsidiary of the international financial group Societe Generale, Russia’s second-biggest bank VTB and privately owned Promsvyazbank.
VTB and Promsvyazbank have been included in the Countering America’s Adversaries Through Sanctions Act (CAATSA), passed by US Congress last summer.
The legislation gives Washington the ability to carry penalties s against enterprises and individuals that are deemed hostile towards the US.
RT reports: The Central Bank of Russia suggests that Russian banks should look for an alternative sponsor that will be able to substitute a current provider of Visa and MasterCard services, seal a maintenance service contract and test an opening of integrating.
In response to sanctions, Russia has acquired its national payment system.
The Mir payment system was launched in 2015 after clients of several Russian banks were briefly unable to use Visa and Mastercard due to US sanctions.
Customers discovered bank-issued credit cards linked to Visa and Mastercard systems no longer worked.
The country issued 37 million Mir cards as of June 2018.
Earlier this month, Sberbank CEO German Gref said one or two of the Russian lenders are exposed to potential US sanctions.
However, Gref emphasized that none of the banking majors would be sanctioned.