Competition or unfair rules? What retailers and lawyers think about Visa and Mastercard policies in Russia
2021-09-09 05:21

Competition or unfair rules? What retailers and lawyers think about Visa and Mastercard policies in Russia

The dispute between the leading Russian marketplace Wildberries and the international payment systems Visa and Mastercard has raised serious issues in the financial and business market. Recall that the conflict arose after the online retailer disclosed the amount of commission when paying with Mastercard and Visa cards in order to show customers the real pricing.

A similar scheme, in which the user of the online store sees the amount of the acquirer bank commission and the real cost of the goods separately at the time of purchase, is now used in Europe, said Wildberries. However, the Russian market for foreign fincorporations is an exception, and such actions meet with indignation.

Is the policy of international payment systems fair in the Russian market? What is more important - the "transparency" of pricing for consumers, or the ability for all participants of the payment market to work by their own rules? Today these questions were discussed by the participants of the New Retail Forum. Read the responses of Russian retail and the legal community in an article "Made in Russia.

Acquiring rates set by international payment systems for Russia and foreign countries are quite different. Foreign operators explain this difference by the underdevelopment of the payment market in Russia, said Deputy GR-Director at Wildberries Maria Zhivykh.

"According to our deep conviction, this has not been the case for a long time. Our financial infrastructure is not inferior, and in some points even surpasses the infrastructure of colleagues from Europe and the United States, so this difference has long been unfounded and irrelevant," says Zhivykh.

Artem Sokolov, President of Association of e-Commerce Companies, noted that, according to the Central Bank, in Russia at the end of 2020 there were more than 300 million plastic cards. It indicates that every resident of the country now has at least two bank cards.

Wildberries suggests turning to the experience of their European counterparts. Thus, if in Europe the client of Internet-shop openly sees at the moment of purchase the amount of commission of bank-acquirer separately from the cost of goods, in Russia such scheme cannot be applied, because it goes against the rules of international payment systems, registered in the market.

According to Denis Kosenkov, vice-president of the Russian Association of Retail Market Experts, partner of the law firm Kosenkov and Suvorov, this situation indicates that now the Russian market is regulated not only by the law and legislation of the Russian Federation, but also by the rules of international payment systems that "are not rules of law, but are considered as certain established rules".

"I have looked at the agreements of about 10 banks, among them the largest. All the agreements with businesses, one way or another, say that our business, retail, non-retail, services in general, must comply with the established rules of international payment systems. Let's figure out what those are. We go to the law on national payment systems, we go to the website of Visa and Mastercard in Russia, we see that the rules do not apply to retail and service businesses and apply only to the participants of payment systems, that is, banks and payment systems. There is no provision in the regulation that they are part of international rules. Nevertheless, the banks are apparently bound by some rules of international payment systems, regulated by other jurisdictions," explained Kosenkov.

At that, the current rules are such that it is possible to show the amount of commission for payment when paying for public services, but not when purchasing goods online. And this rule applies only to Russia, the panelists noted.

"When we go to pay a fine or a public service, we always see the commission. <...> The rules of international payment systems are such that when paying for public services the commission can be displayed, but not for everything else. It is clear that this is a clear business goal - it is not beneficial for payment systems to see the commission, so that consumers associate their payment system with this commission", - said Kosenkov.

The negative effect of uncontrolled growth of tariffs, in the end, falls not only on the consumer, said the representative of Wildberries Maria Zhivykh. According to her, as a result the general price level is growing, inflation is accelerating, and it is especially painful for sellers, i.e. small and medium business, for which online retail is the most popular sales channel.

PRICE TRANSPARENCY IS A PRIORITY

The buying power of the Russians "does not indulge in illusions", wage growth does not catch up with cost increases, so every change in the price of goods is noticed by consumers, said CEO of retail network "Twoye" Maria Chernyshova.

"For us, as a Russian market and retailer, an important step is exactly transparent pricing and competitive rates," she said.

Wildberries also agrees with this. With open display of the amount of commission for payment and cost of goods the buyer understands what and how much he pays, so he can choose a convenient way of payment, payment system and save money. They believe that this possibility should be enshrined at the normative, regulatory level.

STATE INTERVENTION IS NECESSARY?

Earlier Visa announced an increase of its fees for supermarkets and cancellation of preferential rates for large stores. This, along with statements threatening fines for Russian banks, is seen by the Association of Retail Market Experts as evidence of coordination. Is this an evidence that foreign companies have a dominant position on the Russian market? And how to solve the conflict, without or with government intervention?

"If we see a situation where there is pressure on retailers through fines, through refusal to provide acquirer services, then, in my opinion, from the point of view of the legal qualification of the law "On Protection of Competition" - this is coordination. And here the question is whether our government has enough will to apply the law "On Protection of Competition" to the situation that is happening in the market, and the second is the will to adjust the market if we have any gaps," said Denis Kosenkov.

He noted that a few years ago the Federal Antimonopoly Service (FAS) did not agree with the fact that the country had a monopoly of foreign payment systems. The head of ACIT, Artem Sokolov, also said that previously the authorities explained their non-interference by the fact that this was a competitive market, where "everyone sets the tariffs, which he sets". In addition, the FAS noted that international payment systems do not dominate in Russia, as their market share changes, while dominance is recognized if the presence in the market is stable and constant.

"It is extremely rare for the state to interfere in such issues, but nevertheless, we see a trend that nowhere Visa and Mastercard have surrendered their positions without a fight, nowhere has it been without state intervention. So I hope that negotiations between market players will take place, but if they fail, then our state will protect our jurisdiction, "- said the vice president of the Russian Association of Retel Market Experts.

Earlier the international payment systems Visa and Mastercard accused Wildberries of adding an additional fee of 2% when paying by their cards. In response, the retailer explained that such a commission has always existed, the marketplace only began to display it to customers, making the payment "transparent". Later, the marketplace decided to introduce a 2% discount for payments by cards of national payment systems. This was received with criticism in Mastercard and Visa, in particular, Visa sent a letter to the retailer's acquiring banks that it was a violation of the rules of the payment system. Wildberries has accused foreign payment systems of threatening Russian banks over fees on the platform.

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Author: Karina Kamalova