What is going on with payment systems in Russia in 2021?

Publication date: 24 Mar 2021

On March 23, 2021, the deputies of the Russian State Duma introduced a bill that allows the extrajudicial blocking of websites through which funds are transferred in favor of illegal online casinos and lotteries. As the author of the project, Alexander Khinshtein, clarified, this bill was developed to counter illegal activities related to the organization and conduct of gambling on the Internet. He clarified that at the moment the Federal Tax Service can block the very sites with illegal gambling, but “without blocking payment mechanisms – all these are half measures.” The deputy also said that the annual total profit of illegal online casinos from doing business in Russia is 850 billion rubles.

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For implementation, it is planned to create a register of the Federal Tax Service, which will include the organizers of gambling and lotteries, which will be prohibited from money transfers. It will be prohibited to transfer money to them both on behalf of individuals and via foreign payment service providers. “A credit institution, a paying agent, a telecom operator, a postal operator is not entitled to conclude an agreement with a person included in the list of persons in favor of whom money transfers are prohibited,” the document says. The decision to block websites will be made by the Federal Tax Service, which will have the right to send information to the Bank of Russia on detected cases of online transfers by Russian and foreign banks in favor of persons from the register.

So what is going on with payment systems in Russia?

On March 22, Russian Foreign Minister Sergei Lavrov announced the need to reduce the country’s dependence on Western-controlled international payment systems. “We need to reduce sanctions risks by strengthening our technological independence, by switching to settlements in national currencies and in world currencies, alternative to the dollar,” he said.

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On March 22, the Bank of Russia excluded the MoneyGram payment system owned by the American corporation MoneyGram Payment Systems, Inc. from the register. MoneyGram has filed an application with the Central Bank of the Russian Federation to refuse of registration and completely terminate its independent activity in the Russian market. At the same time it became known that MoneyGram had signed a cooperation agreement with the Zolotaya Korona payment system, through which all transfers to the Russian Federation and other countries will be made. From April 1, 2021, the Bank of Russia prohibits cash replenishment of anonymous electronic wallets. In particular, this applies to WebMoney, PayPal and VK Pay. In the future, this can only be done from the linked bank account. From April 27, the Russian payment system Mir will begin rejecting money transfers to foreign e-wallets. The reason for this step is called “minimizing the risk of making doubtful money transfers.” As the head of the board of the National Payments Council Alma Obaeva explained, the system will thus block the replenishment of wallets in online casinos, bookmakers and “other gray market players.”