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Ukrainian Central Bank Wants Card Transactions to Replace Cash

Ukraine’s central bank is seeking to boost electronic-card transactions as it backs restrictions on foreign card issuers’ operations in the former Soviet republic.

“Card payments are more convenient and benefit the country more,” Natalya Synyavska, director of the bank’s information technology and payment systems department, told reporters today in the capital, Kiev. “Money on a card is in the banking system and works for the economy.”

The regulator may move to limit the size of cash transactions, Synyavska said.

The central bank has submitted a draft law under which electronic payment transactions are only permitted through a newly created Ukrainian network. The bill, which parliament approved July 4 in a first reading, threatens Visa Inc. (V) and MasterCard Inc. (MA), which the regulator estimates control 93 percent of Ukraine’s market.

Visa wants to set up a parliamentary working group to discuss the legislation, Jean-Marc Tonti, the company’s business development general manager for southeast Europe and the Commonwealth of Independent States, said in a July 10 interview.

-- Editors: Andrew Langley, Nasreen Seria

To contact the reporter on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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