The law requiring international payment systems to move processing to Russia in order to avoid paying a substantial security deposit will cost Visa $50 million in revenue, the management of the U.S. company said in a conference call on its quarterly report.
Management said Visa is continuing to work with the Russian authorities and banks on a commercial solution that will enable the company to continue serving clients in Russia.
The company expects that a commercial solution that will be introduced in 2015 could result in the loss of about $50 million in revenue on the internal market of Russian transactions, CFO Byron Pollitt said.
The restrictive provisions of the law will be introduced in October and the company is working on a solution in order to make the deadline, Visa head Charles Scharf said, adding that the company expects losses on the domestic payment processing market next year.
He said the recent new round of sanctions against Russia had not affected the company's work with Russian clients.
After the United States imposed sanctions against certain Russian banks, Visa and MasterCard stopped serving them. Russia responded by passing a law to create a national payment card system that obligated Visa and MasterCard to make security deposits with the Central Bank that exceeded their revenues in Russia several-fold.
After heated debates, the Russian authorities made concessions, allowing the companies to avoid the deposits if they completely move all processing of domestic payments to Russia by October 31 and obtain the status of nationally significant players.
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