One reason Visa and MasterCard cut off wikileaks?

I dunno.  Doesn't seem surprising that a country would lobby on behalf
of its businesses.

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http://www.guardian.co.uk/world/us-embassy-cables-documents/246424

US embassy cables: Revealed: US secret operation to help Visa and Mastercard

Summary: The cable from February 2010 reveals how the US tried to
lobby the Russians on behalf of Visa and Mastercard. Washington wanted
to amend a draft law that would have damaged firms' commercial
interests. Key passages highlighted in yellow


C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 000228
SIPDIS
STATE FOR EUR/RUS, EEB
TREASURY FOR TORGERSON/WRIGHT
NSC FOR MCFAUL
WHITE HOUSE FOR USTR EHAFNER
EO 12958 DECL: 01/28/2020
TAGS EINV, ETRD, RS">RS
SUBJECT: RUSSIAN DRAFT BILL WOULD REQUIRE ON-SHORE CREDIT
CARD PROCESSING
REF: MOSCOW 00079
Classified By: ECONMINCOUNS Matthias Mitman for Reasons 1.4(b) and (d)


Read related article
1.(C) SUMMARY: The latest version of the Russian draft law "On the
National Payment System" contains several provisions that would
disadvantage U.S. businesses. The draft law would set up a National
Payment Card System (NPCS) including its own payment card that banks
and payment card companies could join voluntarily. Most likely to be a
consortium of state-owned banks, the NPCS operator would process the
domestic payments for all members and collect processing fees
estimated at $4 billion per year. The draft also forbids sending
abroad any payment data for domestic transactions. Should
international payment card companies such as Visa and MasterCard chose
not to join the NPCS they would have to set up the infrastructure to
do their Russian payment processing domestically. END SUMMARY.

2.(C) On January 27, the Russian newspaper Kommersant reported that it
had received a copy of the "final" version of the draft legislation
"On the National Payment System." Visa's Public Relations Head Dmitriy
Vishnyakov, who along with MasterCard representatives met Ministry of
Finance officials on January 22, told us that MinFin is still seeking
consent from the various ministries and agencies involved in the
legislation. Vishnyakov reported that Deputy Finance Minister
Svyatugin leads MinFin's effort on this legislation, including
shepherding the bill through the GOR interagency process. Vishnyakov
passed a copy of the latest draft law to econoff.

To Join or Not To Join

-----------------------

3.(C) According to Visa's Vishnyakov, the latest version follows the
"China model" of payment card systems. The law would set up a National
Payment Card System (NPCS), which Vishnyakov reported would likely be
run by a consortium of state banks as either a non-profit entity or a
joint stock, profit-making company. Banks and credit card companies
would have the option of joining the NPCS. If they joined, banks in
Russia would issue cards under the NPCS brand, with its own logo.
Payment processing for these cards would be done on-shore by the NPCS
entity. According to the Kommersant article, the fees for these
services are estimated at Rb 120 billion ($4 billion) annually. As
Vishnyakov pointed out, the vast majority of Visa's business in Russia
is done with cards issued and used in Russia; with earnings from
processing going to NPCS, Visa would no longer profit from these
transactions.

4.(C) While joining the NPCS would be optional for both banks and
international payment card companies, membership has its privileges.
If Visa and MasterCard choose to join the NPCS, they would not have
any role in domestic transaction processing, but the bank-issued NPCS
cards could be "co-branded" with Visa or MasterCard. When the
cardholder used his card abroad, the transaction theoretically would
go through the normal Visa or MasterCard processing that takes place
outside of Russia. While Vishnyakov said such a deal is a possibility,
it would require negotiations to specify this approach in the draft
law.

ON-SHORE PAYMENT PROCESSING REQUIRED

------------------------------------

5.(C) In the proposed draft of the law, if international payment card
companies choose not to join the NPCS, they will have to set up
on-shore processing centers. But neither Visa nor MasterCard
representatives, which together have 85% of the Russian payment card
market, are willing to say whether they would be willing to do so.
MasterCard's Head in Russia, Ilya Riaby, said MasterCard would have to
"build and assess the business model of setting up on-shore
processing" before it could reach a decision. The draft law stipulates
that international payment card companies will have one year to
establish processing centers inside of Russia. (Note: Currently no
international companies have processing centers in Russia.) A ban on
sending abroad payment data for purely domestic transactions will
become effective two years after the law enters into force.

6.(C) According to Vishnyakov, MinFin understands that this

MOSCOW 00000228 002 OF 002

would entail so much expense and difficulty for Visa and MasterCard
that the two companies might quit the Russian domestic market.
Vishnyakov believes that, at least at the Deputy Minister level,
MinFin's hands are tied. Implying that Russian security services were
behind this decision, Vishnyakov said, "There is some se-cret
(government) order that no one has seen, but everyone has to abide by
it." As described reftel, credit card company and bank representatives
have told us that GOR officials apparently assume that US payment
systems routinely share data associated with payment transactions by
Russian cardholders with intelligence services in the US and
elsewhere.

STATE EMPLOYEES ALL GET NPCS CARDS

----------------------------------

7.(C) The current draft of the law would require all stated-owned
enterprises and all state employees to be issued NPCS cards and to
receive their salaries via electronic deposit into NPCS member-banks.
(Note: Eighty percent of payment card holders have what are called
"salary cards," a type of debit card negotiated between the employer
and a bank. Historically, employees have used their salary cards
almost exclusively to withdraw their salaries at the beginning of each
month, though they can also use them as debit cards.) One positive
aspect of the latest version of the law is that vendors are not
required to accept NPCS cards, as was required in earlier versions.

COMMENT

-------

8.(C) This draft law continues to disadvantage U.S. payment card
market leaders Visa and MasterCard, whether they join the National
Payment Card System or not. If they join, the NPCS operator will
collect the fees, leaving them to collect processing fees only when
card-holders travel abroad -- a tiny section of the market. If they do
not join but choose to compete with NPCS cards, they will have to set
up payment processing centers in Russia, a very large investment in
itself, and compete against a system likely backed by the largest
Russian state banks. While the draft legislation has yet to be
submitted to the Duma and can still be amended, post will continue to
raise our concerns with senior GOR officials. We recommend that senior
USG officials also take advantage of meetings with their Russian
counterparts, including through the Bilateral Presidential Commission,
to press the GOR to change the draft text to ensure U.S. payment
companies are not adversely affected. END COMMENT.

Beyrle

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