MOSCOW, May 5 (RIA Novosti) – Laws likely to be passed in Russia to curb the fallout from US sanctions would have but a small financial impact this year on US payment giant MasterCard, the company’s CEO Ajay Banga said in a phone conference.
In the first quarter of 2014, Russia accounted for 2 percent, or $2.2 billion, of MasterCard’s revenues. Following the April sanctions, Moscow has moved to set up its own card payment system to shore up the home market against US sanctions like those targeting the Rossiya and SMP Banks .
A bill on the matter was passed last week by the upper house of the Russian parliament and is expected to be signed soon by President Vladimir Putin.
It will contain provisions requiring business to be done onshore, such as the obligation for operators of payment systems to make quarterly contributions to a special account with the Bank of Russia in the amount of 25 percent of the average daily turnover, starting July 1.
Banga said there were provisions in the new legislation that could hamper the operator’s work in Russia, but added the overall impact on its 2014 profits would likely be minimal. He noted, however, the situation was too fluid to make far-reaching estimates for next year and beyond.
Unlike MasterCard, Visa has voiced a less optimistic assessment, saying the US sanctions have backlashed, reducing its transaction volume and could potentially impact its revenues. It also said the required deposits exceeded Visa’s annual returns in Russia by several times.
According to the Russian Central Bank estimates, the creation of infrastructure for the launch of a national payment system may take up to six months, but the distribution of these cards to the public could take up to two years.
The country’s banks welcome plans to establish a national card payment processing system as recent Ukraine-related sanctions saw several Russian banks denied service by Visa and MasterCard, troubling the general public and raising concern over the security of the country’s financial system.
