Visa Inc. has opted to transfer its card transaction processing in Russia to a local payment system rather than pay a security deposit to do business in the country.
U.S. payments companies have faced several obstacles in Russia since hostilities with Ukraine broke out last year over Russian control, including a regulatory and political environment that's increasingly acrimonious to American companies. Reuters reported that both Visa and Russia's central bank confirmed the agreement Feb. 19.
MasterCard has signed a similar agreement. The card networks are complying with a May 2014 resolution that indicated they would continue to do business within the country's local system and avoid paying a hefty, mandated deposit to continue operating independently.
The relationships between the card networks and the Russian government have been deteriorating for more than a year. The major card brands stopped payment transactions through certain Russian banks facing U.S. sanctions as international tensions rose last year. And near the end of 2014, both Visa and MasterCard halted payments services in Crimea in response to a new round of U.S. sanctions.