Russia’s Sberbank Moves Away from Visa and MasterCard Banking Card Chips

Russia’s largest bank is creating an alternative to foreign banking card chips.

Sberbank tapped Payment Technologies to develop a bank chip for its Universal Electronic Card system.

Following US sanctions on Russian financial institutions, MasterCard and Visa are caught in limbo with servicing the country.

90 percent of Russia’s credit and debit cards run through MasterCard and Visa’s networks.

Russian President Vladimir Putin signed into law the requirement for both companies to pay a deposit to continue operating in the country.

The law was amended to allow Russia to take a 10 percent cut of what foreign card companies’ made daily, down from 25 percent initially when the law was first proposed.

The card companies are also allowed to partner with Russian payment networks as affiliates to carry out transactions.

Since the card networks’ future presence in Russia is uncertain, it makes sense for Russian banks to develop and provide a domestic payment network.

While the chip has passed testing, according to Kommersant, one expert said “At least 1.5 years will be needed to reach a full scale production until all needed infrastructure is established.”

Russia is also developing a national payment network meant to compete with foreign card companies.

RT says that it will be based on either Sberbank’s PRO100 or Zolotaya Korona, and branded with Chinese UnionPay, Japanese JCB, along with Visa and MasterCard.