17 Nov 2022 09:41

ARB seeks access to Visa, MasterCard acquiring for banks that were not previously participants

MOSCOW. Nov 17 (Interfax) - The Central Bank of Russia (CBR) and the National Payment Card System (NPCS) are working out conditions for banks that are participants in the NPCS's Mir system who were not previously participants in international payment systems (IPS) that have left Russia to be able to provide acquiring services for the cards of IPS such as Visa and MasterCard.

This was requested by Association of Russian Banks (ARB) president Garegin Tosunyan, who said in a letter to the CBR governor that the departure of IPS operators has deprived banks of the possibility of joining the systems and creating and servicing new products for Russian issuers, including acquiring. However, the substantial reserves of IPS plastic cards and measures taken by banks to extend the duration of previously issued cards indicate that a substantial share of valid IPS cards will remain on the Russian market in the medium term.

At the moment, the NPCS services the IPS cards of Russian banks in its network, supporting processes in line with the IPS rules that were in effect at the time of their exit.

"Considering that the departure of IPS from Russia has made it impossible for new banks who are participants in the payments market to join IPS or obtain new IPS licenses, credit institutions who are members of the ARB are asking [...] to consider the possibility of granting the NPCS the authority to assign technical identifiers for banks who are participants in the Mir payment system that would enable such banks to provide acquiring services for the IPS cards of Russian issuers," Tosunyan said in the letter.

CBR first deputy governor Olga Skorobogatova responded in a letter that this possibility is being explored, but that this would require the NPCS to carry out such inspections of banks that were previously only done by IPS operators.

"It should be noted that in order to ensure the provision of acquiring services on IPS cards by new banks, in addition to the assignment of technical identifiers specified in the Association of Russian Banks letter, JSC NPCS needs to compile and verify complete profiles of banks containing a significant number of parameters, which was previously done exclusively by IPS operators automatically within specialized systems," the CBR's letter said.

Visa and MasterCard simultaneously announced the suspension of operations on the Russian market on March 6 due to Russia's military operation in Ukraine. American Express and Japan's JCB later also suspended operations in Russia. The cards of these payment systems issued by Russian banks are no longer accepted for payment abroad and at foreign online retailers, and cards issued by foreign banks have stopped working in Russia.

However, the cards of these systems issued by all Russian banks continue to work as usual within Russia, since transactions on them have been processed by the NPCS since 2015.