VISA & MASTERCARD blocked Russians from accessing their money

[niothor]

So , this will actually not hurt their profits

Yes, in case of absence of sanctions. It seems like this deposits are will be used as something like insurance fund.

Let's for a moment suppose that visa and mastercard go nuts.
They block all the card and money transfers.

What would be the short term consequences?
A bank run? A drop in e-commerce? enormous use of webmoney ? Bitcoin usage?

[Nemo1024]

So , this will actually not hurt their profits

Yes, in case of absence of sanctions. It seems like this deposits are will be used as something like insurance fund.

Let's for a moment suppose that visa and mastercard go nuts.
They block all the card and money transfers.

What would be the short term consequences?
A bank run? A drop in e-commerce? enormous use of webmoney ? Bitcoin usage?

If I discover that Visa stops its operations, I would look for alternatives, and Bitcoin would be an obvious choice. I would be asking international merchants to accept BTC in the absence of Visa payments.
Bank run? No.

[Balthazar]

Let's for a moment suppose that visa and mastercard go nuts.
They block all the card and money transfers.

What would be the short term consequences?

Lost money will be returned from insurance fund, then something interesting would happen.

A bank run?

Maybe, if significant part of deposits money was invested into the foreign assets.

A drop in e-commerce? enormous use of webmoney ?

This event will have a shocking effect to e-commerce, and some transitional period will be required before new PoS equipment will be established by sellers.

The only problem is international banking. National system will be incompatible with VISA or MC, so customers of sanctioned bank will be unable to work with foreign VISA/MC clients directly. But this shouldn't create any irresistible problem, because local banks are able to work with any payment system using the foreign pass-through, if it would be necessary.

enormous use of webmoney ?

I'd like to see that. But actually, webmoney is just another bank, it could be sanctioned as well as any others.

Bitcoin usage?

Unfortunately, bitcoin network wouldn't be able to process such amount of transactions.

[niothor]

Let's for a moment suppose that visa and mastercard go nuts.
They block all the card and money transfers.

What would be the short term consequences?

Lost money will be returned from insurance fund, then something interesting would happen.

A bank run?

Maybe, if significant part of deposits money was invested into the foreign assets.

A drop in e-commerce? enormous use of webmoney ?

This event will have a shocking effect to e-commerce, and some transitional period will be required before new PoS equipment will be established by sellers.

The only problem is international banking. National system will be incompatible with VISA or MC, so customers of sanctioned bank will be unable to work with foreign VISA/MC clients directly. But this shouldn't create any irresistible problem, because local banks are able to work with any payment system using the foreign pass-through, if it would be necessary.

enormous use of webmoney ?

I'd like to see that. But actually, webmoney is just another bank, it could be sanctioned as well as any others.

Bitcoin usage?

Unfortunately, bitcoin network wouldn't be able to process such amount of transactions.

Thanks for the detailed answer.
I just realized that a bank run shouldn't be triggered.

The money you have on your visa card are money owned by the bank in my case for example ING.
So it's just you card that got disabled  , it's not your account that is at risk .. so I guess no bank run.


As for webmoney...didn't know they are actually a bank , not a service.
It's a pain in the ass sometimes to use but I had no problems with it in the last 4 years so people would consider it first  , before bitcoin unfortunately.

[bryant.coleman]

What's happened? They don't want to be responsible for some of their recent actions?

Right now, VISA / Master is caught between the devil and deep sea. On one side they face the wrath of Obama and his cronies if they don't comply with their order to block the Russian transfers. On the other side, they risk losing their rapidly growing business in Russia and its allies. 

[Sithara007]

Is the Russian national card payment system active now? Or are they yet to officially start the payment system? Can these cards be used for payments outside Russia?

[Nemo1024]

Is the Russian national card payment system active now? Or are they yet to officially start the payment system? Can these cards be used for payments outside Russia?

Still in the planning stages:
http://ru.wikipedia.org/wiki/%D0%9D%D0%B0%D1%86%D0%B8%D0%BE%D0%BD%D0%B0%D0%BB%D1%8C%D0%BD%D0%B0%D1%8F_%D1%81%D0%B8%D1%81%D1%82%D0%B5%D0%BC%D0%B0_%D0%BF%D0%BB%D0%B0%D1%82%D1%91%D0%B6%D0%BD%D1%8B%D1%85_%D0%BA%D0%B0%D1%80%D1%82#2014_.D0.B3.D0.BE.D0.B4

Interestingly, Belarus already has its own national, domestically developed system, Belkart.

I remember not so distant past, when visiting Germany, you had to be prepared to take cash in ATMs and pay with cash in the shops, as almost none accepted VISA, while accepting national EC card.

[ejinte]

Visa and mastercard are devils with way to much power in their hand. It's time for a change I think.

[bryant.coleman]

Interestingly, Belarus already has its own national, domestically developed system, Belkart.

In that case it would have been a good idea to jointly develop a combined card payment system for both Russia and Belarus. The infrastructure and the technology is already there.

[RomeoCharlie]

I do not believe it can help coins somehow.
Coins are enemies for a classic cof any country - especially like USA.

Ftfy.

US has incredible strict control of foreign accounts usage, with almost zero level of tolerance. This system is extremely close to dictatorship, much closer than its counterparts in USSR or Russian Federation ever were.

Just one example, in USA I can get 3-5 years of prison if I forgot to declare some foreign incomings. In Russia or Germany for the same action I'll get only a moderate fine.

That's funny to change my post, yeah.
So how does it breaks my position?

[Nemo1024]

Visa announces readiness to pull from the Russian market:
http://rbcdaily.ru/finance/562949991518906

[majakn]

now russia block VISA&MASTER

bye bye USD, BTC is future

[Nemo1024]

I don't know. Seems like Russian Duma backpedals, promising to soften the deposit demands...
http://ria.ru/economy/20140521/1008678543.html

[stompix]

I don't know. Seems like Russian Duma backpedals, promising to soften the deposit demands...
http://ria.ru/economy/20140521/1008678543.html

The google translation makes no sense for me unfortunately.
Is there a deadline on June 1st for this issue?

If they don't make the deposit they will have to force shut-down?

[Nemo1024]

I don't know. Seems like Russian Duma backpedals, promising to soften the deposit demands...
http://ria.ru/economy/20140521/1008678543.html

The google translation makes no sense for me unfortunately.
Is there a deadline on June 1st for this issue?

If they don't make the deposit they will have to force shut-down?

No, what it says is that the lawmakers can reduce the required level of deposit by the 1st of July, which is the deadline for Visa and MasterCard to Make the deposits.
Visa and MC are asking for the size of the deposit to be reduced and this is being discussed at the moment. The new law comes into power on the 1st of July, and the lawmakers say they will reach a compromise by then, and they refuse to comment any further.

[Balthazar]

New law will apply since June 1st, so all issues should be resolved before this date. Article says that representatives of visa & mc are currently negotoating with Central Bank of Russia in order to find suitable value for insurance deposit.

[stompix]

I don't know. Seems like Russian Duma backpedals, promising to soften the deposit demands...
http://ria.ru/economy/20140521/1008678543.html

The google translation makes no sense for me unfortunately.
Is there a deadline on June 1st for this issue?

If they don't make the deposit they will have to force shut-down?

No, what it says is that the lawmakers can reduce the required level of deposit by the 1st of July, which is the deadline for Visa and MasterCard to Make the deposits.
Visa and MC are asking for the size of the deposit to be reduced and this is being discussed at the moment. The new law comes into power on the 1st of July, and the lawmakers say they will reach a compromise by then, and they refuse to comment any further.

Thanks for the explanation.
But it makes no sense for them to declare that. How can they be so sure.

It can only mean that they have already settled for a smaller amount or even made deal behind the back , requiring them to actual deposit that sum but giving them some privileges in return so both sides will be happy.The politicians acting like patriots and the visa/mastercard team happy about the payouts.Probably they encountered a lot of problems while developing a national system or they didn't had the time.

now russia block VISA&MASTER

bye bye USD, BTC is future

^This will have to wait.

[bryant.coleman]

New law will apply since June 1st, so all issues should be resolved before this date. Article says that representatives of visa & mc are currently negotoating with Central Bank of Russia in order to find suitable value for insurance deposit.

I think that it will be much lower than the $3 billion, which was demanded by the Russian authorities. Probably will be in the range of several hundred million US Dollars.

[Hazir]

Russia won't accept bitcoin, ever. If their leaders can't steal something from it then it is no use for them to allow it. And after this situation with Visa & Mastercard they will probably develop their own banking&paying procedures, just like China and Belarus. It is only loss for Western Banking companies and for the russian people really.

[bryant.coleman]

Russia won't accept bitcoin, ever.

Too early to say that. In the early stages of Bitcoin (especially in 2011 and 2012), Russians constituted for a large part of the Bitcoiners (IMO, they constituted close to 25% of the Bitcoiners at that time). The Russian government is not pro-Bitcoin, as of now. But they have not yet banned Bitcoin, as China and Thailand has done.