Visa and Mastercard have about six weeks to decide if they will continue operating in Russia. A new Russian law will go into effect that requires the card providers to pay hundreds of millions just to continue doing business there. As it stands, Visa does not believe they will continue operation within Russia.
The legislation was a reaction to U.S. sanctions against Russia that halted processing of payments to Russian banks by Visa and Mastercard. The new law creates a national payment system and imposes new rules on foreign firms, including fines for denying services. It also requires a security deposit from the firms by July 1st. The security deposit has to be made to the Russian Central Bank, and will automatically be drawn from in the event more transactions are blocked.
The combined revenue of Visa and Mastercard in Russia is about $638 million a year, which is just a small fraction of their overall global revenue.
Charlie Scharf, CEO of Visa, said Russia's proposed fees and demands "just go beyond what we'd be willing to do." He hopes Russia would be willing to negotiate on their demands, saying “I would hope that we get to a different conclusion than to get to July 1 and just say we’re not willing to participate.”