Russia’s national payments card system moves ahead

BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/01

Under amendments to the payments system act in spring 2014, all card payments made in Russia need to be settled through a national payments clearing system. As a result of the change, Visa and MasterCard, which dominate the Russian credit and debit card markets, have moved to settling payments made in Russia using the national settlement system, which is owned by the Central Bank of Russia. The driver of the change has been the desire of Russian officials to bolster the country’s economic independence and support financial institutions that have been targeted with sanctions by Western countries. The national payments card system will also feature Russia’s own Mir payment card.

On December 15, Bank Rossii, which was targeted with Western sanctions in summer 2014, became the first bank to issue a Mir payments card. At the same time, six other banks were announced to issue their own Mir cards. Among the 35 Russian banks currently participating in the Mir system are giant state bank Sberbank and VTB24. Officials expect national use of Mir cards to ramp up during this year. Use of the Mir card in international payments, on the other hand, may remain limited.

Show weekly Review 2016/02