Medvedev signs a law about National Payment System
Russia is setting up its own national payment system, with Russians still being able to use Visa and Mastercard.
The law on Russia`s national payment system was signed by President Medevdev on Monday, dispelling fears of a possible ban on the use of the major international payment systems, Master Card and Visa, by Russians, outlining use of new categories including electronic cash payments and mobile payments.
"The law regulates all types of e-payments using new technologies, including mobile phones," Medvedev said at a meeting of the commission on economic modernisation on Monday, June 27. "I hope it will be useful in real life," he added.
Ben Aris, Chief Editor of Business New Europe Magazine, was upbeat commenting the move to Business RT and said such a system would trigger technological development in all connected areas, as well as become an example for peer countries.
"Russia has this advantage and so much as most of this system they are putting in place - they are doing from scratch. Soviets never had this stuff, credit cards never existed. And so they go straight to the state of the art, which means the best software, the best hardware and most of the system being built in the west are being incremental, with progressively adding new functionality - new software, new hardware, as new services become available. And in that sense they have an opportunity to build a really classy system that you could then naturally export to other members of the CIS and to further abroad to other emerging markets who are coming to this question at the same time."
Among the major concerns about the draft law were limitations on the usage of international payment systems, Visa and Mastercard, which had seen criticism from experts for both inconsistency with plans to make Russia more financially developed and attractive to foreigners, and huge costs for ordinary people.
In the end the adopted law allows Visa and MasterCard to use international processing centres for operations inside Russia, with the regular nature of services being the major requirement, regardless of the "nationality" of a provider.
"As for the affair with international payment systems and demands for a ban on the transmission of information on internal Russian operations, the Finance Ministry objected against this position, and we agreed with it," the chairman of the Duma Committee on the Financial Market, Vladislav Reznik of United Russia, said earlier already on Monday, May 30.
"But I can say we have absolutely equal competitive conditions between all payment systems, and international payment systems and national ones will have to get their rules and changes to them approved by the regulator - the Central Bank," he said.
E-cash transfers will become a new form of non-cash settlement, that will be carried out only by lending institutions if so instructed by their customers, Reznik explained.
In addition, the draft law lays down the main principles of regulating so-called "mobile payments" that were not in the draft law during the first reading.
According to the amendments, "an operator of electronic money can make an agreement with a telecom operator licensed to provide cellular mobile services, under which the e-cash operator will be allowed to increase the e-currency balance of an individual who is subscribed to the services of such telecom operator using his money paid to the telecom operator in advance. In other words, this creates conditions for the use of mobile phones for making various payments," Reznik said. "I think the adoption of this law is the first step towards a situation where plastic credit cards will most likely disappear in a number - not very many - years."