Visa, MasterCard may not pay Russia collateral if local partners found
July 1 (Reuters) - Card companies Visa Inc and MasterCard Inc may be able to avoid paying heavy security deposits to operate in Russia if they can find local processing partners by the end of October, Russian media outlets reported.
Visa's shares rose 2 percent to a two-month high of $215.34 in afternoon trading on the New York Stock Exchange, while MasterCard's stock rose 3.1 percent to $75.74.
"The companies have been offered to transfer processing of internal Russian transactions to any nationally important payment system by Oct. 31," Central Bank of Russia Chairwoman Elvira Nabiullina was quoted as saying by Russian news agency ITAR-TASS.
"If they succeed in doing it by Oct. 31, then the pledges will be minimized to zero."
New rules following Western sanctions over Ukraine required foreign card companies to deposit with the central bank an amount equal to two days of their average processing volume in Russia.
Analysts had estimated that Visa and MasterCard could end up paying up to $2.9 billion to operate in the country.
Visa and MasterCard had considered quitting Russia after President Vladimir Putin signed the rules into law in early May, but the companies said they would stay after officials showed willingness to relax the requirements.
A law that came into effect on Tuesday prohibits foreign companies from blocking transactions of Russian banks. The law is part of a new legislation aimed at setting up a domestic payment system to reduce the country's dependency on foreign companies. (Reporting by Tanya Agrawal in Bangalore; Editing by Kirti Pandey)
Trending On Reuters
We are living longer but not creating financial plans to keep pace. Advisers give tips on how to make sure you don’t outlive your money. Video