Visa and MasterCard may leave Russian market
Analysts at U.S. bank Morgan Stanley said that it would be a lot cheaper for Visa and MasterCard to leave the Russian market than to try to adapt to the new rules that the Russian government is going to introduce.
According to the Kommersant, the proceeds of Visa in Russia amount to about 350-470 million dollars a year, whereas the revenues of MasterCard - about $160 million a year. The expenses of the two international payment systems in accordance with amendments to the Russian law "About the national payment system," will make up 1.9 and 1 billion dollars respectively. One should also take account of the possible construction of processing centers in Russia and possible penalties, should international payment systems single-handedly refuse to provide services to clients.
Total revenues of the two payment systems in Russia make up approximately 3-4 percent for Visa and 2 percent for Master Card. The experts concluded in their report that the payment systems would be able to cope with the negative consequences in terms of profits only if they decided to leave the Russian market.
An unnamed representative of Visa or MasterCard told the Kommersant that the U.S. experts were putting the horse before the cart with their conclusions, which, as the source said, were not quite correct.
In March it was reported that due to the economic sanctions imposed on Russia for the move to reunite with the Crimea, Visa and Master Card ceased to serve several Russian banks. Foreign Minister Sergei Lavrov said later that Russia would find a way to replace the two payment systems, should they decide to leave Russia.
It is quite possible that the parties can reach a compromise, and the systems will not have to leave Russia.
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