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Visa (NYSE:V) and Mastercard (NYSE:MA), two of the world’s leading payment networks, are reportedly considering a return to the Russian market. Anatoly Aksakov, head of the State Duma Committee on Financial Markets, suggested that the companies are looking to re-enter Russia due to the significant market they have lost.
This development comes after both payment giants suspended their operations in Russia in March 2022, in response to the country’s military actions in Ukraine.
The suspension was a part of wider Western sanctions aimed at cutting off Russia from the global financial system. Consequently, cards issued by Russian banks ceased to function for international transactions, prompting a rapid shift to alternative payment systems within the country.
To address the void left by Visa and Mastercard, Russia accelerated the adoption of its own payment system, Mir, and explored partnerships with China’s Unionpay and various cryptocurrency payment methods.
Despite these developments, Aksakov pointed out that for international transactions, especially those with Europe and the U.S., Visa and Mastercard’s global networks are still necessary. He acknowledged that these companies’ services are essential for cross-border payments.
Nonetheless, Aksakov highlighted that their potential return to the Russian market would not be without challenges, as the country has adapted to its national payment system and would not easily transition back.
Since their exit, Russia has been working on strengthening its financial infrastructure to become more self-reliant. Any attempt by Visa and Mastercard to re-establish their presence in Russia would likely encounter regulatory obstacles and stiff competition from the already established and emerging payment alternatives that have filled the gap during their absence.
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