Russia’s biggest online retailer Wildberries became embroiled last week in a public fight with international payment giants Visa and Mastercard after an announcement that customers will escape commission fees if they use Russian payment services. Visa and Mastercard believe Wildberries’ decision is a violation of consumer rights.

• Wildberries announced changes to its payment terms earlier this month, instigating a 0-percent commission scheme to encourage customers to use Mir (a payment system created by Russia’s Central Bank), SberPay (run by state-owned banking giant Sberbank) or other local options. When using Visa or Mastercard, customers now have to pay a commission of 2-percent of the cost of the goods they are ordering.To justify their decision, Wildberries said that international payment systems offer far lower commission rates in other countries and claimed this was “obvious discrimination against Russian businesses”.
• Purchase commissions for international payment systems in Russia are between 1.2 percent and 2 percent, while Mir offers 0.8 percent. The difference in price is mostly because Visa and Mastercard have to pay Russia’s National Payment Card System to process transactions (the result of a 2014 Russian law that was passed after Visa and Mastercard stopped servicing cards issued by banks that had their shareholders sanctioned by the U.S. government).
• Visa and Mastercard believe that Wildberries’ new approach is in violation of consumer rights — and the companies have reportedly threatened to fine banks processing payments with the Wildberries 2-percent commission.
• It’s not yet entirely clear why a player as big as Wildberries has decided to take on Visa and Mastercard. Wildberries’s Russian competitors (Ozon, AliExpress, Yandex) have made no official comment on the situation, but sources close to these companies told Forbes they were surprised by Wildberries’ behavior. “International systems don’t twist anyone’s arm. Everyone continues to work with them. Nobody in their right mind wants to quarrel with Visa and Mastercard,” one source told the newspaper. Some suspect that Wildberries’ decision might be a marketing ploy or a bid to get better terms from the payment services.
• A massive internet marketplace, Wildberries is unofficially known as the ‘Russian Amazon’, and has underwritten its growth by catering to low-income consumers via offline collection points, free delivery, and rolling discounts. Wildberries founder Tatyana Bakalchuk is ranked by Forbes as Russia’s richest woman with a fortune estimated at $14 billion.

Why the world should care: A few years ago, no Russian e-commerce operation would have dared quarrel with Visa and Masterard. But now Wildberries — with an annual turnover of $6 billion — can clearly afford such a step as it searches for commercial and political advantage.