Russia turns to Chinese payment system UnionPay after Visa and Mastercard suspend their operations in Russia

Russia turns to Chinese payment system UnionPay after Visa and Mastercard suspend their operations in Russia
New sanctions are being imposed on Russia every day and more companies are leaving Russia over the invasion of Ukraine, but Russia has found an alternative.

The list of Western financial companies withdrawing their operations in Russia continues to grow, and Visa and Mastercard are among the key payment systems that announced the suspension of their operations on 5 March. The Central Bank of Russia has approached China’s UnionPay system as an alternative. 

UnionPay is the world’s largest payment card network, allowing payments in more than 180 countries. In 2015, it overtook Visa and Mastercard in the total value of payments made by customers, but only 0.5% of that volume was made outside China.

Bloomberg reported that Russia’s largest bank Sberbank has announced that it is considering issuing cards using UnionPay in partnership with Russia’s internal Mir payment system. AlfaBank has already started issuing UnionPay cards and TinkoffBank says it will start doing so as soon as possible.

On 6 March, the Central Bank of Russia announced that Russian banks using Visa and Mastercard would no longer operate from 9 March. However, Mastecard and Visa cards that have been issued in Russia will still be able to be used until their expiry date.

Despite outrage from virtually the entire western world over Putin’s actions, China is holding back on its criticism of Russia and says sanctions are the kind of punishment that never works. China is Russia’s largest trading partner, in terms of imports as well as exports. Entering into a partnership with UnionPay will allow Russia access to a global payment system, bypassing Visa and Mastercard.

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09/03/2022 Mr.Advice TEAM

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