Visa, Mastercard may transfer settlements to CBR control - paper
MOSCOW. Nov 18 (Interfax) - International payment systems Visa and Mastercard may transfer control to the Central Bank of Russia not just for processing and clearing, as initially planned, but also for settlements, Kommersant newspaper reported, citing sources familiar with the situation.
One source told the paper that this was envisaged in a trilateral draft agreement, currently under discussion, between the international payment systems, the National Payment Card System, a subsidiary of the Central Bank of Russia (CBR), and CBR. If this agreement is implemented, the international payment systems will act as operators, the NPCS will take care of processing and clearing and the Central Bank will carry out settlements between banks that participate in the system, acting as a settlement bank for the international payment systems, the source said.
A final decision on this has not yet been made, the sources told the paper. But, they said, considering the interest the regulator has in this scenario, which came about amid the new leadership of the regulator's payment block, there is a good likelihood that it will happen. The international payment systems are not officially making any comment on this issue.
Such a configuration, the paper says, would mean that major Russian government banks - Sberbank and VTB , which are currently acting as settlement centers in Russia for Mastercard and Visa, respectively, would be out of the game.
Russian legislation does not regulate the issue of what structures can be settlement centers for international payment systems. Anti-sanction amendments made to the law on the national payment system, only directly regulate the issue of international payment system payment and clearing centers.
The issue involves rather major sums in the form of balances in international payment system ban accounts, which in the described scenario would be taken from Sberbank and VTB. However, considering the scale of the business of these banks, this money will not have an impact on their position and spending liquidity, sources said.
Changing settlement bank is a long and difficult process and each participant bank needs to reset its IT system. In addition, the Central Bank itself would need to learn to implement the new function, write all the regulators, procedures for settling disputes between participants and so on, which may drag out the establishment of a payment system in the new configuration, the sources said.
