Faced with threat of sanctions against its banks, Russia to create own payment system
{{#rendered}} {{/rendered}}Russian President Vladimir Putin smiles as he listens to the CEO of Siemens AG Joe Kaeser during their meeting in the Novo-Ogaryovo residence outside Moscow, Russia, Wednesday, March 26, 2014. Kaeser told President Vladimir Putin on Wednesday the German industrial giant plans long-term investment in Russia, in a key sign of confidence in Russia's economy despite the outcry over its intervention in Crimea. (AP Photo/Alexander Zemlianichenko, Pool) (The Associated Press)
Russia's 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.
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.
{{#rendered}} {{/rendered}}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.
{{#rendered}} {{/rendered}}Russian officials have criticized the reliance on Visa and MasterCard, saying Russian banks are hostage to international corporations.