With the Russian occupation of Ukraine, many companies ceased their services from the Soviet Union MasterCardA Visa And the American Express. Following the departure of US providers, Russia announced that China, the world’s largest card issuer, would turn to UnionPay to distribute the country’s payment and settlement activities.
Three U.S. payment companies announced the suspension of their services in Russia between March 5 and 6 – a move that further isolates the Russian economy. According to payment providers, cards issued outside the Soviet Union will no longer work at ATMs or home businesses.
However, according to the Central Bank of Russia, MasterCard and Visa cards issued in the country can still be accepted until the expiration date.
Following the departure of the providers, Sberbank, Russia’s largest bank, announced that the company was considering the possibility of issuing cards using the Chinese system Union Pay, in conjunction with the Russian domestic payment system Miru, according to Bloomberg.
Meanwhile, Alpha Bank and Tinkoff Bank talked to UnionPay and studied the possibility of issuing cards through the Chinese payment system.
The company itself says that if UnionPay is widely accepted by Russian banks, citizens will be able to make payments at physical stores in more than 180 countries around the world and make international transactions online in more than 200 locations abroad.
In the absence of Visa, MasterCard and Amex in the country, the Central Bank of Russia advised its citizens to adopt as a form of payment abroad. Mir’s domestic network cards can be used in Turkey, Vietnam, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, South Ossetia and Abkhazia.
The adoption of the Union Pay system will lead to Russia’s increasing dependence on China due to isolation from Europe and the United States, and it is not known how much risk the world’s second largest economy poses for the Soviet Union. To help Russia after it was hit by sanctions around the world.
In addition, if most Russian banks adopt the Chinese payment system, the company will be able to gain more advantage and become a strong competitor to Visa and MasterCard. UnionPay currently has over 7 billion cards in circulation – most of which are in China.
Prior to the announcement of the departure of Visa, MasterCard and Amex, several Russian banks had already issued UnionPay cards – Rosalkhosbank, Pocha Bank, Gazprombank and Bank St. According to the Russian news agency Tass, Petersburg is home to some companies.
Source: Canaltech
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