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Federation Council Passes Act to Postpone Guarantee Payments for International Payment Systems Until 2Q 2015

15.10.2014 13:09 / Interfax

On Wednesday, the Federation Council signed off an Act aimed at postponing guarantee payments for international payment systems until 2Q 2015.

A reported earlier, in Spring 2014, Visa and MasterCard terminated services for a number of Russian bank due to US sanctions, and Russia passed law to make international payment systems pay guarantees to facilitate continuity of service. Refusal to provide services will be punishable by a fee deducted from guarantee.

Visa and MasterCard will transfer guarantee amounts (the total sum of all Russia-based cash transfers for two days) to Central Bank accounts.

According to Government decree, these guarantees had to be deposited by 31 October 2014. Also, the decree allowed no guarantee for payment systems processing their entire operations through NSPK. This part of the Government decree remains intact.

Earlier, Central Bank Deputy Chairman Olga Skorobogatova said that leading IPSs agreed to switch their processing of Russian domestic transactions to the national payment card system.

“MasterCard, JCB, AmEx, Visa have confirmed that they are willing and ready to work this way”, she said.

Olga Skorobogatova confirmed that the processing center for Russian domestic transactions made via international payment cards may become operational in 1Q 2015. Central Bank Chairman Elvira Nabiullina has also stated this earlier.

The Act also introduces other amendments to the national payment system concept statutory norms.

25% of national payment system software must be produced by Russian companies, according to Central Bank regulation, published in the Bank of Russia Newsletter on Tuesday.

Printing or assembly of payment cards must be based in Russia, says the regulation. The chip must comply with at least two foreign payment systems’ security standards and/or certified by the national security authority.

The Central Bank regulation also sets out technical requirements to licensing agreements, magnetic strip specifications and other parameters – they all must comply with Russian law.

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