Duma trying to outlaw foreign capital payment processing

RUSSIA / FSU POLITICS - In Brief 18 Jun 2019 by Alex Teddy
The Duma (Russian Parliament) is proposing a ban on Russian companies collaborating with payment processing companies that operate with foreign capital. This has caused consternation in the banking sector. The CBR has not commented officially but in private the CBR is known to be opposed. But politicians are adamant. This bill would make it much trickier for SMEs to operate especially in international trade. It would also reduce Russia's options. Transaction costs would increase steeply. There would be less competition in the market and this would lead to excessive profiteering.Foreign companies would find it even more difficult than it is already to invest in Russia if this bill makes it onto the statute book. They value long established relationships with payment processing companies.The US has sanctions on Evrofinance Mosnarbank. Russia is seeking to retaliate. But this riposte will hurt Russia more than the US. It is intended to reduce vulnerability to sanctions. International transfers can be blocked by the US or EU.

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