Saturday, July 5, 2014

Russia mulls restrictions on PayPal

Russia mulls restrictions on PayPal

The Russian lawmakers are mulling restrictions on foreign payment systems offering money transfer and transaction services on the Internet, the Moscow-based Izvestia newspaper reports.

The proposed restrictions may concern the US PayPal and London-based Webmoney payment systems.

PayPal received a license from Russia’s Central Bank last May.

A bill on changes to the existing legislation regulating the activity of online payment systems is currently being prepared by the State Duma Committee on Budget and Taxes.

United Russia deputy Yevgeny Fyodorov, one of the authors of the bill, sees it as a “safety cushion” for Russian online payers as it will protect their money against possible foreign sanctions that might block access to their digital wallets.

He pinpointed the need to make foreign payment systems more transparent to rule out the possibility anonymous online payments being used to finance terrorism or other criminal activities. That’s precisely the aim of a ban on Internet money transfers from anonymous accounts, which came into force in Russia in the middle of May.

If passed, the bill will oblige online money transfer systems to pay security fees to the Central Bank similar to those introduced for VISA and MasterCard.

Under the recent amendments to the law “On the National Payment System”, VISA and MasterCard are to deposit 25% of their average daily transfer profit to the Central Bank every quarter of the year.

PayPal has protested that as long as it has a Central Bank license it considers itself to be a Russian juridical person.

Problems with online payments will affect online traders.

For example, PayPal is a key payment tool at Ebay.


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