Russia is to begin testing a card-payment system that will ends its reliance on Mastercard and Visa as it attempts to lesson the impact of sanctions imposed by western governments.
It will also launch its own alternative to the Society for Worldwide Interbank Financial Telecommunication (Swift) following a proposal by the UK to ban Russian oganisations using the network as a form of sanction.
The National Payments System (NPS) is being developed by banks in Russia and testing will begin on 15 December.
The system will become operational next year. All Visa and Mastercard transactions will be processed through it and later next year the NPS will issue its own cards.
In May 2015, Russia is expected to launch an alternative to Swift.
The UK suggested blocking Russian companies from Swift at an EU meeting. This was suggested as a sanction in reaction to Russia’s role in the current crisis in Ukraine. The European Parliament has since asked the EU member states to consider excluding Russia.
Swift responded to the proposal, claiming its reputation had been damaged as a result of being linked with the crisis in Ukraine.
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"Under fundamental principles of European law, enshrined in the EU Charter of Fundamental Rights, the singling out of Swift in this manner interferes disproportionately with Swift's fundamental right to conduct business and its right to property,” said a statement from Swift.
The Swift network’s strategic importance to global businesses, combined with the globalisation of the financial system, puts it at the centre of global politics. The European Parliament recently passed a resolution calling for the suspension of an EU agreement with the US that allows US authorities to monitor financial transactions on Swift.
Gareth lodge, analyst at Celent, said Swift is an international system and there are question marks over whether it has the right to bar businesses from a certain country. “Also, if Swift did bar Russia, its trade will go underground and become less transparent," said Lodge.