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Data for today’s episode is provided by Mercator Advisory Group’s Viewpoint: Russian Credit Cards Will Lose Relevance as Their Economy Tumbles
How the Russian National Payment Card System Clears and Settles Payments Post-Sanctions:
- The Russian National Payment Card System (NSPK) clears and settles payments between consumers, merchants, and banks.
- 1) The cardholder tenders their card to the merchant.
- 2) The merchant sends transaction information to the acquirer.
- 3) The acquirer sends the information to NSPK, the Russian national payment switch.
- 4) NSPK clears and settles to the bank.
- 5) The disposition flows back in reverse order.
Russia was primarily a cash economy until 2012, when payment cards began to displace cash. Recent global events indicate that domestic card usage will continue, with growth in debit transactions, but credit card volumes will languish.
Russia’s domestic payment scheme will keep transactions flowing within the country. Still, it faces challenges in global acceptance and will not be capable of supporting a robust credit card function as the economy weakens as a result of the international sanctions.