The Visa international payment system's criticism of the law on the functioning of payment systems in Ukraine passed by the Ukrainian parliament is not in line with the behavior of the company on the U.S. market, according to Director of the Ukrainian Interbank Payment Systems Member Association EMA, Oleksandr Karpov.
“The position [of Visa] is not in line with their behavior on the
U.S. market, where they observe the tougher and all-embracing
requirements of the FRS, which were passed in a law on financial
stability in 2010,” he told Interfax-Ukraine on September 28, 2012.
Karpov said that Ukraine needs the realization of the law on the
functioning of payment systems, and the flaws in the law can be
corrected in future.
“It’s better [for the president] to sign the law and continue improving the payment laws in the future,” he said.
As reported, Visa has expressed deep disappointment at the adoption
of a law on the functioning of payment systems (No. 10656) and has asked
Ukrainian President Viktor Yanukovych to veto the law.
Visa said the adoption of the law would hinder the development of
electronic payment industry in Ukraine due to the establishment of
monopoly on the Ukrainian payment market.
Visa also said that Ukrainian consumers would not be able to use
their payment cards in stores and restaurants or get cash from ATMs
inside the country.
The director of the Ukrainian Interbank Association of members of
payment systems said that there was fierce competition on the global
market among payment systems.
“Monopolists should not frighten us with their departure. Others will come – Amex, Diners Club, JCB, UnionPay,” Karpov said.
He said that the position of Visa was not in line with the facts
stipulated in annual reports of the company to the U.S. Securitiesand
ExchangeCommission: Visa does not participate in routing transactions on
the territory of over 50% of countries where the system operates –
special-purpose companies do this, including those belonging to local
banks and governments.
As reported, the law on the functioning of payment systems passed on
September 18, 2012 by parliament gives the right to the NBU to define
the procedure for clearing and making cross payments between payment
systems participating in transactions in Ukraine using payment cards
issued by Ukrainian banks.
EMA believes that the law should be revised. According to a letter of
the association to the deputy governor of the National Bank of Ukraine
(NBU), the realization of the law is leading to an increase in the cost
of services for clients by 1.2 times due to the foreseen transfer to
tariffs in hryvnias in Ukraine. The requirement is leading to the fact
that value added tax (VAT) will be added to expenses of banks in paying
for services of payment systems.
The association said that payments of banks for services of
МasterСard and Visa in 2012-2015 (taking into account the coefficient of
transactions growth, but not taking into consideration the changes in
the national currency exchange rate) would reach $360 million (VAT not
included). VAT on the said payment will come to UAH 583 million, which
is five times up on the banks’ investment in 120,000 payment terminals
installed in Ukraine over the past 17 years.
The association was also alarmed at the fact that during the
endorsement of draft law No. 10656, amendments to the Criminal Code and
Administrative Infringement Code were not taken into account, which
hampers the joint efforts of the Ukrainian Interior Ministry and the
banking system in fighting cyber crime.
As reported, NBU said that the central bank would continue its dialog
with the Visa and MasterCard international payment systems on the
prospects for the Ukrainian national payment card transactions routing
and clearing system.
