As escalating political tensions over the Ukraine crisis leave Russia increasingly isolated, the country may have to look internally for a new payment system.

Facing sanctions from the United States and the European Union that would restrict some Russian banks' access to Visa and MasterCard, Russian President Vladimir Putin has already gone on record as saying that he will support plans for a domestic payments system, comparable to systems in Japan and China. "We certainly must do this, and we will do it," Putin told senior Russian lawmakers in late March. Visa and MasterCard last month stopped supporting transaction services for customers of Bank Rossiya and Sobinbank after the United States established sanctions due Russia's activities in Crimea. (The card companies had initially also ceased services for customers of SMP Bank, but then reinstated them.)

The idea of establishing its own payments system is not entirely new for Russia, and the negative fallout from these sanctions could provide the long-needed impetus for Russia to move forward with this project, says Michelle Evans, senior research analyst for Euromonitor in London.

"In the past such initiatives failed due to the superiority of the services provided by these international networks, the global portability of their cards and conflicting interests between leading Russian banks," she says. "If either Visa or MasterCard were to extend the reach of these sanctions, it could potentially have a big impact on the Russian payment landscape."

As of 2012, more than 90% of all card payment transactions in Russia were sent over the Visa and MasterCard networks, according to the latest data from Euromonitor International. The fact that the sanctions are limited in scope reduces the impact on the existing payment system, Evans says.

However, as Putin's Russia presses ahead with its integration of Crimea, sanctions may get harsher. And industry experts believe that Russia may well press ahead with plans for its own payments system. As recently as April 16, Russia's central bank and legislators were reported to be preparing legislation that would allow the country to fine Visa and MasterCard for cutting off Russian cardholders.

Russia's national payment system could materialize within two to six months, and would likely be similar to the plans leaked in 2010 about a potential Russian National Payment Card System, says Gilles Ubaghs, a senior analyst covering financial services technology for Ovum.

"The aim then was to launch something akin to China UnionPay in that they want to create a domestic card scheme, which would process all domestic Russian debit card transactions," says Ubaghs. "MasterCard and Visa's role would be restricted to facilitating only overseas card payments, which would exclude them from the majority of card activity in the market."

The way Ubaghs sees it, "the political will is certainly there, which means that both the legislative framework and financial backing for the necessary infrastructure investment will not be a problem. In practical terms, it also means the banks in the market would get on board quickly, particularly if this is tied into a state-run identity program."

Evans sees Russia's national card scheme as likely following the same model as Elo in Brazil or RuPay in India, which allow the international networks to operate alongside these domestic alternatives.

"Although Visa and MasterCard could lose share, these two networks have such established positions in Russia and too many consumers that have enjoyed the convenience, efficiency and globally portability of their products for either to be entirely displaced by a domestic scheme," she says. "Case studies from other countries have shown that domestic payment schemes often most resonate in pockets of the market often untouched by international schemes – namely unbanked and rural individuals."

While Russia can follow through with its plan to develop its own payments system, the country will face significant hurdles.

"Building a payment network from the ground up is incredibly challenging due to a combination of regulatory barriers, required network infrastructure and the scale that is needed for mass consumer adoption of any payment product or network," says Evans." The fact that long-standing international payment networks, such as Visa and MasterCard, continue to hold dominant positions in so many markets around the globe further illustrates this reality."

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