PETROPAVLOVSK KAMCHATSKY, April 05. /ITAR-TASS/. Russia’s major banks have begun consultations on the creation of a national payment system in the country.

VTB President Andrei Kostin said “this would mean consolidating the existing settlement systems to create such a system within a month or two …using the terminals of all leading Russian banks without crossing the border”.

“This can be done inside the country and this will cover about 90 percent of payments our citizens make annually. This can be done within a month or two…without issuing new cards. The existing ones will work … and consumers simply won’t notice anything. They will use the same ATMs… All ATMs of all banks will work within one system,” Kostin said.

“The second stage is to create a national payment system proper using a new independent settlement centre as the basis. This is a somewhat more long-term task, but I think we can do it within six months or so and this system will work inside the country too,” the banker said.

“Recognition abroad is another issue. There are different points of view. We can try to join efforts with the Chinese Union Pay system, which has been operating for a long time. But the question is on the agenda and it’s a question of protecting the interests of our people,” Kostin said.

Speaking about Visa and MasterCard problems, he said, “We should not embark on a path of self-isolation and we should certainly preserve the relations we have”.

Kostin said earlier this week that the universal electronic card project had to be dropped if Russia wanted to create a national payment system.

“The national payment system should be created within the shortest time possible and take over most of the payments inside the country. It will also be necessary to drop the unrealistic idea of launching a universal card that would combine the functions of a social card, a driver’s license and other roles. There must be as simple and inexpensive a payment system as possible and it must be created within the shortest time possible,” Kostin said.

Sberbank CEO German Gref advocates the creation of a national payment system and insists that it be based on the universal electronic card, a project launched by Sberbank some time ago. In his opinion, a national payment system can be created within two months after the relevant draft law has been prepared.

“There has lately been an upsurge of interest in this topic. Our PRO100 system [Russian payment system] based on the universal electronic card is fully ready. I think we can speak about its implementation within six months or so,” Gref said.

He believes that the payment system can be launched within two months after the relevant draft law was prepared.

Several years ago, the Russian authorities started introducing the electronic card system intended for providing a wide range of services to the population in electronic form across the country, including public and municipal services, such as social welfare, transport, health care, financial and commercial ones.

The universal electronic card is also a tool for confirming its holder’s right to receive such services and can be used for remote transactions as provided for in Russian laws.

Kostin said that the creation of the national payment system would not solve the problem of payments in all countries at once but cooperation with other payment systems would in the medium term.

President Vladimir Putin said in March that Russia would create its own payment system. “These systems work successfully in such countries as Japan and China. They started off as national systems for domestic needs only but are now becoming increasingly popular,” he said.

The Japanese system now operates in 200 countries. “Why shouldn’t we do the same? We should and we will,” Putin said at a meeting with the leadership of the Federation Council, the upper house of parliament.

The Central Bank of Russia is already making plans for creating a national payment system in the country.

“We should create a system that will ensure uninterrupted domestic payments that make up about 90 percent of the total. We are preparing measures that should be realistic, unburdensome and gradual. At the initial stage we should ensure technological compatibility between processing and operating centres of major banks so that they could switch over quickly,” Central Bank Chair Elvira Nabiullina said.

A draft law ensuring uninterrupted money transfers within Russia will go to the State Duma, lower house of parliament, shortly. It bans all participants from terminating transfers unilaterally. Clearing centres will not be allowed to provide information abvout money transfers outside the country or make such information accessible from other countries.

In 2011, several MPs called for creating a domestic processing centre. The relevant law was adopted but processing operations were not transferred to Russia despite the risk of losing access to international payment systems for Russian banks. This is precisely what happened on March 21, 2014 when Visa and MasterCard, both headquartered in the United States, suspended operations for several Russian banks.

The blocking of access to the SWIFT inter-bank payment system makes online payments in any currency, except the national one, impossible.

Presidential adviser Sergei Glazyev suggests creating a single processing centre for payments within the Commonwealth of Independent States and the Customs Union created by Belarus, Kazakhstan and Russia.