NSPK — Questions and Answers
Frequently asked questionsWhen was the National System of Payment Cards established?
Joint Stock Company National System of Payment Cards (NSPK) was established on July 23, 2014. NSPK started its operations on August 4, 2014.What are the tasks of the National System of Payment Cards?A developed national payment system is an imperative indicator of an appropriate development level of the country’s economic and financial system as well as the guarantee of uninterrupted transactions processing.
The National System of Payment Cards (NSPK) faces the following key tasks:
- establishment of the Transaction Settlement and Clearing Center to process domestic transactions made with the international payment cards within RussiaDue to establishment of the national independent transaction processing platform, any transactions made with the international payment cards within Russia is processed locally, and not abroad as used to be.
- issuing and promotion of Mir National Payment CardHaving its own national payment card guarantees the growth of the national payment services. It will enable the Russian citizens to receive any services on their cards within our country regardless of any external factors.What legislation governs the operations of the National System of Payment Cards?
The operations of JSC NSPK are performed in full compliance with the requirements of the Russian legislation, and particularly by Federal Law No.
161-FZOn the National Payment System, Federal Law No. 86-FZOn the Central Bank of the Russian Federation (the Bank of Russia), Federal Law No. 112-FZOn Amendments to the Federal Law On the National Payment System and Other Legislative Acts of the Russian Federation, Federal Law No. 319 On Amendments to Other Legislative Acts of the Russian Federation, the Order of the Bank of Russia No. 3493-UOn Arrangement of Transaction Services and Payment Clearing Services for Funds Transfer Made by the International Payment Cards dated December 16, 2014.
The project was implemented according to National Payment System Development Strategy and The National System of Payment Cards Creation Concept approved by the Supervisory Board of JSC NSPK.Why has the Bank of Russia decided to create the National Payment System on its own platform rather than on the basis of other existing platforms?In anticipation of the NSPK creation, launch of the National System of Payment Cards as quickly as possible was considered on the basis of already implemented technologies of payment systems Universal Electronic Card (PRO100) and Golden Crown. It was assumed that this solution would help minimize costs. However, during the NSPK Technology Platform Selection Committee the representatives from the banking community and other experts assessed the capabilities and limitations of the existing payment systems and indicated that the national payment system should be effective, productive and developed based on the desired outcomes.
The main arguments of the Committee in favor of the NSPK creation on its own platform were:- the existing platforms do not have a number of critically important functional capabilities;- they contain excess functionality, not specifically needed for a national system;- assessment of labor intensity and complexity of improvements to the existing platforms are compatible with the labor costs of building a new platform; using the platforms of the existing operating payment systems to build the National System of Payment Cards may lead to the construction of an inefficient architecture.Is it possible to create a payment system in such a record time?Timewise the launch of the National System of Payment Cards as an Transaction Settlement and Clearing Center and the base of Mir Payment System is a unique project.The international payment systems have been evolving over the years, and, according to experts’ opinion, building the National Payment System from scratch requires at least 3 years.Nevertheless, the NSPK team has proven the ability to create a solid infrastructure for in-country transaction processing of domestic payments on the international payment cards within 5 months.The first results of the NSPK workAt the NSPK Council Board meeting the Supervisory Board of JSC NSPK reviewed and approved the National System of Payment Cards Development Strategy, which included three stages:- routing traffic of domestic transactions of the international payment systems (IPS) within the Russian Federation through NSPK Transaction Settlement and Clearing Center (NSPK TSCC) (by the end of Q1 2015);- issuing the Mir National Payment Card (Q4 2015);- Mir Payment System (Mir PS) expansion beyond the Russian Federation and enhancement of the product line (2016-2018).
° The transaction processing platform, on which NSPK TSCC is based, has been created, tested and implemented.
° All the Russian banks-participants of the international payment systems MasterCard and Visa collaborate through the NSPK for processing and clearing.
° The NSPK Tariff Policy has been reviewed and approved by the NSPK Council Board, and was approved by the Supervisory Board of JSC NSPK.
° The active implementation of interbank standardized protocols is currently in progress. They will be used for both processing and payment clearing of Mir Payment System cards and transactions of other international payment system participants.
° Starting February 2015 the NSPK Customer Support Service Desk has been operating to support banks and their processing centers. The service is available 24/7 and allows quick issues resolution, which arise during connection and technical cooperation with the NSPK regarding the transactions made with the international payment systems MasterCard and Visa cards. Incoming claims are processed on a designated portal https://support.nspk.ru, and by e-mail: email@example.com and by phone 8-800-500-00-05.
° To ensure the banks had the opportunity to start processing Mir Payment System cards in December 2015, several activities were performed concurrently:1) Our own payment application of a microprocessor card based on the international EMV standards has been developed and currently undergoes certification. This allows using the entire existing payment infrastructure for servicing Mir cards both in Russia and in the near future abroad.2) Specifications for processing and clearing cooperation within the framework of the Mir payment system are being transferred to the banks and suppliers of processing solutions.3) The preparation plans for the acquiring network to accept Mir Payment System cards are currently being defined and agreed upon.4) In December 2015, seven banks issued the first Mir Payment System cards.How will NSPK ensure and guarantee uninterrupted and secure transactions processing?NSPK solutions to ensure uninterrupted transactions processing:1) NSPK TSCC redundancy is ensured based on the diversified infrastructure (there is no single failure point both at the infrastructure and applications level).2) Ability to increase the computing power without interrupting the main production process.3) All elements of the technical and communications infrastructure are free from sanctions. NSPK uses the Russian security systems, its software and source codes, as well as our own dedicated development teams. It is also planned to use our own payment application for a microprocessor card that is compatible with the international standards and formats.
NSPK solutions to ensure security:4) Financial security is ensured by settlements occurring through the Central Bank of Russia. The impact of any external factors that may affect expansion of Mir Payment System within the Russian Federation, including the Crimea and Sevastopol, is excluded.5) In the near future the monitoring systems to control suspicious transactions will be incorporated to prevent fraud.6) The operational risk management is performed by the team of highly skilled professionals who are well-known to the banking community. Monitoring and control of computing systems, which provide uninterrupted payment clearing services, are performed around the clock by responsible personnel.7) Payment application ensures a high level of security for transaction performance.8) Secure information exchange occurs between Mir Payment System participants and NSPK TSCC.9) Use of the most advanced and secure key management procedures are used.What has changed for customers with the IPS transition to NSPK processing?The main task NSPK faced was the smooth transition of transaction processing to the National System of Payment Cards with no difference to the cardholders. The cardholders’ access to all services of the international payment systems should have been preserved in full and without service quality decline.All domestic transactions made with the cards of the international payment systems Visa and MasterCard are now processed within Russia. Prior to NSPK creation, the information of all the transactions made with the IPS cards of the Russian Federation citizens was processed abroad at the processing centers. Today, the international payment systems have no mechanism of suspending card transactions within Russia.Does the NSPK Transaction Settlement and Clearing Center comply with the international standards?The program code of the NSPK TSCC is an exclusive Russian development and unique product which was created specifically and especially for the National System of Payment Cards and its Transaction Settlement and Clearing Center.While establishing the Transaction Settlement and Clearing Center all the standards applicable to the international payment systems were followed. They include the security standards, formats and data transmission protocols. Currently our own interbank connection standardized protocol is being developed. It will allow having an independent Russian payment card system, but at the same time it will ensure compatibility with all the international standards and formats both at the level of the card’s payment applications and the level of processing and clearing the transactions.Are there any national systems of payment cards in the world which are similar to NSPK?
Today, national payment systems have been established and are operating successfully in many countries of the world.
One of the largest systems is JCB International, a Japanese national payment system established in 1961. JCB has rapidly become a top one in the world market of credit cards. Today, there are about 59 mln JCB users, and the cards of the Japanese national payment system are accepted for payment throughout the world.
UnionPay Chinese company is another example of successful launch of the national payment system. UnionPay has been established with support of the Central Bank of the People’s Republic of China; over 200 financial institutions are among its shareholders. The Chinese payment system is an absolute leader in the world market in terms of the number of issued cards ― about 4 bln. They are accepted for payment in many countries of the world, including Russia.
In 2008, RuPay national payment system was established in India. The strategic task of its establishing was to ensure competition with Visa and Master Сard international payment systems in the Indian market. In 2013, only 5 years later, RuPay system became an international one and is currently becoming more and more popular.
Interac Association was established in Canada in
mid-1980sto ensure safe electronic transactions. Only a year later the number of such transactions was 6.2 mln. An agreement on cooperation with NYCE (an American company) made it possible for Interac system to enter the international market.
Payment systems have their own peculiarities. The Canadian payment system mainly uses the
non-cashpayment mechanism, while in Girocard (a German network of debit cards) transactions are possible only via terminals and ATMs. Within Girocard system co-brandedcards with MasterCard and Visa logos are issued.
Carte Bleue payment card is accepted in France. Its creation with participation of six major French banks allowed the French citizens to carry out transactions within their country without the bank request for the card holder authorization. Its creation with participation of six major French banks allowed the French citizens to carry out transactions within their country without the bank request for the card holder authorization.
Bancomat Italian consortium (established to coordinate entrepreneurial activities) controls the system of payment cards and enjoys the opportunity to track the flow of funds in the electronic field and other transaction channels. Bancomat system is supported by all Italian banks, and the number of transactions reaches 1.65 bln a year.
In Belorussia and Armenia (neighbors of Russia) BELKART and ArCa national payment systems are operating.How will the Mir Payment System cards work with the commonly used payment systems?
Our aim is to ensure maximum possible acceptance coverage for theMir Payment Card within the country, as well as large market-wide issuing. In the medium term, we should ensure use of Mir Payment Card outside Russia, and later ― its ability to compete successfully with other payment systems.
Besides, we are planning to ensure seamless acceptance of the cards abroad due to
co-badgingprograms implemented jointly with the international payment systems. Agreements on issuance of co-badgedcards under the brands of Mir-Maestro, Mir-JCBand Mir-AmExhave already been signed.
Despite some preferences provided by the legislation to the National Payment System, it will be developing in conditions of healthy competition with other payment systems.When will the first card be issued?In December 2015, the first 7 banks have issued the first Mir Payment System cards.When will Mir cardholders be able to use it abroad
First of all, Mir Payment System intends to promote the national payment cards abroad in cooperation with the national payment systems of the Eurasian Economic Union countries ― BELKART in Belorussia and Armenian Card (ArCa) in Armenia.
Acceptance of Mir Payment System cards abroad through
co-badgingprograms is being implemented jointly with a number of international payment systems. In particular, the agreement of issuing co-badgedcards under Mir and Maestro brands was executed in June 2015. In July 2015, the engagement agreements on issuing co-badgedcards were signed with JCB and American Express international payment systems.
Transactions on such cards outside of Russia will be serviced the same way as before, according to the rules and standards of international payment systems, and within Russia Mir Payment System.
Mir Payment System will be operating directly with payment systems and major acquiring banks of the countries where the flow of Russian tourists is traditionally intense. These are Turkey, Egypt, the countries of the Mediterranean Sea and
Besides, in the long term, it will be beneficial for Mir Payment System if international banks issue Mir Payment System cards to their customers who visit Russia.Will 3D Secure technology be available?
JSC NSPK is developing its own services to ensure security of electronic payments such as 3D Secure technology.