Visa, the international payment provider, has circulated a letter to Russian banks warning that it will no longer guarantee the processing of domestic transactions from Oct.1, the Kommersant newspaper reported Monday, citing market sources.
Under legislation passed after Visa and MasterCard stopped servicing sanctioned Russian banks last year, from Oct. 1, all local transactions must be processed through a state-run National Payment Card System designed by the Central Bank. The new system aims to cut the country's reliance on foreign payment providers.
But the transition to the new national service has been rocky, and Visa is still receiving some transaction requests from banks, according to Kommersant.
Unidentified sources told the paper the situation had prompted the company to warn that if it receives requests from banks to approve Russian transactions from Oct. 1, it will not guarantee their processing.
Visa confirmed sending the letter to all Russian banks, according to Kommersant. The company also said Monday that the move would not affect ordinary cardholders.
The number of transaction requests from banks was small and there was no threat of disruption from failed payments, the newspaper reported, citing unidentified representatives of Visa and the National Payment Card System.
Analysts agreed: Visa cares about its reputation and relationship with banks, and is unlikely therefore to stop processing transactions even if it receives them by mistake, Maria Mikhailova, executive director of the National Payments Council lobby group, told the newspaper.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
