Passed in the first reading on Sept. 18, Ukraine’s payment bill proposes to create a national monopoly that takes over essential elements of the electronic payment system – routing, switching and clearing. The idea is to increase national oversight and move operations into Ukraine, thus reducing the costs for banks and consumers.Authorities are also looking to introduce obligatory electronic payments for purchases above Hr 8,500 (roughly $1,050). Critics see this as a way to force consumers to cough up more per transaction while allowing authorities to better control currency flows.
Visa currently earns less than $10 million yearly from its share in the Ukrainian processing market, said Parker, but has spent hundreds of millions of dollars to set up infrastructure on which the nation depends. Visa’s Europe processing center, for instance, cost $500 million. The company also spent millions, together with other market participants and central authorities trying to set up Topaz, a failed earlier project to create a national system.
“For a single body to start building something completely new – which will cost hundreds of millions – Where will that money come from? The banks or other people will be taxed, but in the end it will go back to consumers,” Parker said.