Visa and Mastercard have decided to keep their services active in Russia after addressing concerns that they might have to abandon the country. Earlier this week, both card providers were planning exit strategies as Russian officials passed strict regulations that would impose on their business, resulting in millions of dollars in fees.
On Friday, Russia has indicated that they will relax the new laws that were a direct response to recent U.S. sanctions, which caused both card providers to temporarily halt Russian transactions. The main point of contention was a massive security deposit Russia was demanding from the card providers, which would be drawn from in the event future transactions were declined.
After Visa indicated they wouldn't be willing to stay in country under those demands, Russian officials changed their tune. The Russian Financial Ministry has now described the laws as "excessive" and is working to negotiate a more reasonable deal.
Today's successful negotiations between officials and executives led both Visa and Mastercard to promise they will remain in Russia, "We are willing to work in Russia and after this meeting we hope that a compromise solution will be found," said Andrew Torre, director of Visa in Russia.
Andrei Belousov, a top economic aide in Russia, confirmed that amendments to the laws will begin next week, as the government is still looking into its options.
As part of the negotiations, both Visa and Mastercard have proposed to create Russian-based payment systems. The development time is set at one-to-two years, and in the meantime, the card providers will work within Russia's existing payment systems. By creating a Russian-based system, Visa and Mastercard "would significantly strengthen the government's initiative to create the national payment system," said Mikhail Kuzmin, an analyst at Investcafe in Moscow.
Of course, all of these negotiations and their results remain subject to U.S. sanctions.
This article is from the archive of our partner The Wire.