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Russia to Set Up Own Payment System

By Associated Press - Mar 27, 2014 at 1:34PM

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Russian officials have criticized the reliance on Visa and MasterCard, saying Russian banks are hostage to international corporations.

MOSCOW (AP) -- Russia President Vladimir Putin said Thursday that Russia will set up its own payment system to rival Visa and MasterCard after the companies pulled their services from several banks in the wake of the sanctions imposed on the country.

Putin. AP Photo/Alexander Zemlianichenko, pool

Last week, the United States and the European Union imposed travel bans and asset freezes on two dozen Russians who are believed to be Putin's close allies, following the country's annexation of Crimea.

The banks of some of those individuals reported suspension of card services. Visa and MasterCard suspended services for St. Petersburg-based bank Rossiya, which was specifically targeted by U.S. sanctions, and two of its subsidiary lenders.

In a meeting with Russian lawmakers Putin said the country's central bank is "working hard" to set up Russia's own payment system, citing the recent troubles facing Rossiya and others.

"This is not our decision," he said in televised comments. "We have to protect our interests, and we will do it."

Putin expressed "regret" that the companies halted their services and cited Japan's JCB or China's UnionPay as examples of successful card business which started off as domestic companies but have expanded internationally ever since.

Russian officials have criticized the reliance on Visa and MasterCard, saying Russian banks are hostage to international corporations.

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