Unipolar “Mir” – Newspaper Kommersant No. 217 (7418) dated 11/23/2022

The Bank of Russia has officially given the National Payment Card System (NSPK) the right to regulate the work of banks with cards of international payment systems (IPS), including dispute resolution and tariff setting. According to Kommersant’s sources, NSPK itself does not plan to change tariffs for MPS cards, although it is interested in promoting Mir cards. However, experts believe that the expected decision of the Central Bank, having removed the legal conflict, killed competition in the payment market and will lead to the displacement of MPS cards from it.

Central Bank published solution, which gave NSPK the right to regulate the activities of banks related to the use of cards of international payment systems in Russia. The board of directors of the regulator received the corresponding powers after the adoption of amendments to the legislation this summer (see “Kommersant” of June 20).

Now the NSPK has received the functions of adopting rules governing the interaction between banks, between credit institutions and the system, ensuring the acquiring of MPS cards, including the assignment of MCC codes to trade and service enterprises (TSPs). NSPK will also be able to change the amount of interbank fees (interchange), the procedure for their collection and pre-trial settlement of disputes between participants in settlements using cards of international payment systems. The NSPK noted that the decision of the Central Bank “is aimed at maintaining the stability of the payment market.” They stressed that “immediate changes in the procedure for the functioning of the payment market participants are not expected,” but the changes will allow “quickly responding to changes in the situation and market demands.”

As a market source explained to Kommersant, now NSPK does not plan to change tariffs for MPS cards, focusing on the development of the Mir payment system.

This is also indicated by the reform of the approach to determining the interbank commission when paying with these cards (see “Kommersant” dated November 21). Until now, not a single tariff has been changed for MPS cards, but only a fine has been introduced for miscoding – the substitution of MCC codes for merchants (see “Kommersant” dated November 15). However, the interlocutor of Kommersant is sure, “if there is a request from market participants that seems reasonable to the NSPK,” the system can adjust the tariffs for MPS cards.

The head of the National Payment Council, Alma Obayeva, notes that since March, the acceptance of MPS cards “has been in a state of legal inconsistency with what is written in the law and what is happening in practice.” She adds that there are about 250 million MPS cards in Russia and “it would be logical to see a movement towards their curtailment.” According to the head of NSPK Vladimir Komlev, given at SPIEF, in June the share of Mir cards on the Russian market was 35%, in the turnover of funds – 27%.

“We should talk about supporting the functioning of MPS cards, taking into account the fact that their validity periods have been significantly extended, but not about development,” emphasizes Alma Obayeva. According to Roman Prokhorov, the head of the board of the Financial Innovations Association, the regulator’s task will be to unify the conditions for card products, which will ensure the issuance of only Mir cards, and the cards of the former MPS will be withdrawn from circulation. “As a result, in addition to the task of balancing tariffs for Russian cards and SBPs for their uniform development and elimination of mutual cannibalization, the regulator has added tariff work on the cards of the former Ministry of Railways,” the expert believes.

Meanwhile, Dmitry Vishnyakov, an independent expert in the payment card market, draws attention to the fact that the expected decision of the Central Bank actually “ends the competition” in the payment card market within Russia. “If after 2014 all internal transactions gradually began to be processed by the NSPK, that is, a monopoly on network processing was formed, now a monopoly is being established on what MPS competed with each other — the rules of payment systems, including interbank tariffs,” the expert explains.

Previously, according to Mr. Vishnyakov, banks could choose which products to offer to customers based on the tariff policy, marketing agreements, technical solutions of different payment systems, but now “the regulation trend forms uniform or monopoly conditions formed by one operator – NSPK”. With new powers, the expert explains, NSPK “may equalize tariffs, including interchange on international cards, or make them unattractive for banks.”

Maxim Buylov