Visa and MasterCard back in Crimea, Russian payment system breaks down

By bne IntelliNews April 30, 2015

Clients of global payment systems Visa and MasterCard can use their cards in Crimea again after the National Payment Card System (NPCS) was launched in Russia. According to TASS, cardholders can withdraw cash via 678 ATMs of Russian National Commercial Bank (RNCB), the largest bank in the region.

Meanwhile, the NPCS let down its other Russian clients on the night of April 29 when the system collapsed for several hours. As a result, no Visa or MasterCard transactions could be processed in Russia between 2.15am and 7.10am. The head of NPCS, Vladimir Komlev, said that the cause of the glitch in the system was unclear.

"I can only say that it isn't a system failure. The crash wasn't caused by hardware or software related problems," Interfax quoted Komlev as saying.

Visa and MasterCard halted the servicing of their cards in Crimea in December 2014 after the US government banned transactions in the peninsula over Moscow's role in the Ukraine crisis. In response, Russian authorities ordered Visa and MasterCard to transfer the processing of Russian operations to a national payment system by April 1 or pay a security deposit. Both companies endured additional costs of about $3bn under the new legislation.

Komlev said in March that the situation with the payment systems for Crimean clients will be resolved by April. 

The NPCS started to work on April 1. Under the law on national payment systems, all transactions made in Russia will now be processed exclusively by NPCS. MasterCard managed to transfer its clients to the NPCS clearing centre before the deadline. Visa will finalise the transfer only in the third quarter of 2015.

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