MOSCOW, April 16 (RIA Novosti) – Russian banks will set up special interconnections by June to ensure the uninterrupted use of bank cards within Russia, even in the case of further sanctions, the head of Russia’s VTB24 Bank told RIA Novosti Wednesday.
“We are now at the first stage of organizing inter-host connections between all the banks in the country, to be finished by the end of May,” Mikhail Zadornov said, following a meeting on the creation of a national payment system with Prime Minister Dmitry Medvedev.
Zadornov added that the system would “guarantee cash transactions to all citizens on their existing cards at any ATM in the country, even if the international payment systems suspend the operations of a bank, as well as operations at POS-terminals that belong to the bank.”
The Central Bank, in charge of a future national payment system, has not yet settled on the final configuration for the system, with discussion centering on an independent clearinghouse operating under either a commercial or non-profit overseer.
In the first approach, the country’s banks and payment platforms would co-found a non-profit partnership responsible for the regulatory framework, and a clearinghouse would be based on Rossiya Bank’s operations.
The alternative scenario, backed by the country’s largest retail bank Sberbank, is a commercial operator. Supporters argue the profit-driven nature of the banking system necessitates the payment operator should be a business as well.
The final decision on the national payment system will be made this week, as the amendments for the draft law on the system must be submitted to parliament by Saturday.
The country’s banks have welcomed the plans to establish a national card payment processing system, as recent Ukraine-related sanctions saw several Russian banks denied service by Visa and MasterCard, raising concerns about the security of the country’s financial system.