Not only does Russia have its own financial interchange system but they have their own credit card network as well. Visa and MasterCard were forced to integrate with them early on in order to get a toe hold in the country. This will do more to hurt MasterCard then Moscow.
Hindsight being perfect, one of the worst blunders the US ever made was turning their backs when the Soviet Union collapsed. That was their one chance to jump in and shape things in their favor, instead they opened Pizza Huts.
It's already clear that Visa/MasterCard will be a key part of US sanctions against Russia so this is partially a pre-emptive strike. I generally doubt it's going to work out though.
My partner is Ukrainian and apparently the Crimeans which were recently annexed and now have to switch are utterly shocked by state of e-banking at their new Russian banks; which doesn't bode well for their efforts...
Putting in place measures to avoid being screwed over by Washington's control of payments infrastructure is not "moving to turn Russia into another China". It's being smart and pragmatic.
Visa and MasterCard have been working in Russia for years, apparently unmolested judging from their joint market share. Now they are being turned into weapons by US politicians .... again. This is a huge, massive trend in US politics: seizing control of power points in the financial system and squeezing them as part of proxy wars against people, countries or classes of businesses they don't like (see Operation Choke Point).
As someone in Europe, I don't see this as Russia becoming communist. I see it as Putin standing up for his country and I wish the EU would do the same, instead of allowing SWIFT to be turned into a tool of the US Treasury.
It's a funny turn of events. I know plenty of companies that were sunk by arbitrary fines from Visa and Mastercard in the past (whole IPSPs tanked because of ridiculous and ill motivated fines).
Sure sucks to be on the receiving side of something like this. The only thing this will do as a result is to slightly increase Visa and Mastercard fees.
One way VISA/MC could strike against this law is by simply cutting off all Russian cc's. That would hurt them as well but they could simply stop doing business there for a week or so. I think that Putin would very quickly recant once it becomes evident how much of the Russian economy is now dependent on such instruments.
The new Russian owned payment system is dead in the water from a non-Russian perspective, the only reason VISA and MC are so popular in Russia is because people do not trust local alternatives, not because they don't have other options.
You're completely missing the point here. Have you read the article?
"The law on a national payment system, which seeks to guarantee uninterrupted service of payments in Russia by foreign payment systems and prevent them from cutting services to Russian clients, as Visa and MasterCard did in response to U.S. sanctions in March."
Visa and MasterCard cut their local intra-Russian services "because of the U.S: sanctions"(!) Note that both these named Visa and MasterCard aren't "American Visa and MasterCard." The ones operating in Russia had to be registered as Russian companies to provide the services at all. So it's Russian companies (they are daughter companies, but legally independent except for brand, initial investments, connecting to the international infrastructure etc) cutting their own services to Russians because of the external political influences.
It's totally reasonable to adjust the laws to make it harder for such Russian companies to do such things in Russia.
I wonder how to square with the fact that continuing to do business in Russia would mean continuing to pay taxes, that would fund a war-waging government.
Maybe they can point Russians to an online store outside Russia's jurisdiction. Sadly for the ordinary Russian, Visa and MasterCard have also disabled the ability to use their cards overseas (within Russia it seems they outsourced the processing to a Russian company, which is still functioning).
Good job, Mastercard (and Visa)! Now all people opposing Putin and trying to gather money for leaflets will have to use state-created MIR instead. Putin will be pleased!
This particular move does not affect people living in Russia, Mastercard will continue to work within Russia as before. It only punishes people who escaped Russia and foreigners in Russia.
The Visa and MasterCard named in the article must be Russian-based Visa and the Russian-based MasterCard. They operate under the Russian laws, pay Russian taxes, otherwise wouldn't be able to operate there. They made themselves unreliable by, per article:
"cutting services to Russian clients (...) in response to U.S. sanctions in March."
So it's the opposite of your claim 1). The answer to your claim 2) is that the given money amounts "equivalent to the value of two days of (their) transactions processed in Russia."
Your claim 3) is confusing. Visa and MasterCard are already de-facto standard: they "together service about 90 percent of payments in Russia."
A little background on why the cards won't stop working in Russia.
After first sanctions due to Crimean & Donbass conflict started rolling out in 2014, Russian gvt saw the writing on the wall and gradually strong-armed Visa & MC to move all the local transaction processing to ???? (National System for Payment Cards).
Here's some more info on this (you can use Google Translate):
I am one of these Russians. Or should I say I was, because just moments ago Visa and Mastercard stopped all operations in Russia, and this essentially left us without any money except the (meagre) cash we could withdraw back in Russia.
It really feels the trap is closing in around me right now.
The same way the USA has been taking control of the rest of the financial system. They say to American VISA/MC executives, "we require any transactions processed by your subsidiary to comply with US sanctions, or else we're going to tell the whole world that you're a bunch of financial terrorists and throw you in jail".
Then the US executives say, OK, then we won't process payments in Russia. And then Russia says ....
Since the war started, and the repressions inside Russia tightened (e.g. news stations being taken off air for calling this war a "war"), a lot of us Russians including myself have been fleeing the country, fearing for our safety. Now Visa/Mastercard have left us all without access to money.
If I were more of a conspiracy type, I'd say they and Putin are on the same side now.
> Russia for its survival will have to find one way or other to survive the visa mc shutdown
the “shutdown” is only for payments outside of Russia using Russian cards and internal payments using foreign card. local Russian Visa and Mastercard still work inside of Russia as all their payments go through a local organisation and thus are not impacted. many countries did this in order to protect their payment systems.
This is ridiculous action from visa and mastercard. Goverment make taking more than 10k $ cash abroad illegal and another strike come from payment systems.
Whats the plan, do they want to trap most talented and qualified specialists from Russia here? And cut off any oppotunity for us to make world better in tech companies across the world? This make relocation extremely hard!
Corporations’ actions are very questionable. No one inside Russia will notice the effect, only those who relocates.
This already provoked mass cash withdrawal by people in Georgia and Armenia. No one benefit from this
Hindsight being perfect, one of the worst blunders the US ever made was turning their backs when the Soviet Union collapsed. That was their one chance to jump in and shape things in their favor, instead they opened Pizza Huts.
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