Several Russian Banks would soon start issuing banking cards using the system of Chinese operator ‘UnionPay’ along with Russia’s own Mir network.
This came soon after American companies including Visa and Mastercard suspended their operations in Russia on March 5, as part of sanctions imposed by US govt over the invasion of Ukraine by Russia.
The Russian banks need to use an alternate payment network as major American networks Visa and Mastercard will no longer work in the country, inconveniencing millions of ordinary Russians who have nothing to do with Putin’s decision to invade Ukraine. American Express and Paypal also have announced that they are suspending their operations in the country.
On Saturday, U.S. payment companies namely Visa.Inc, MasterCard.Inc and Pay Pal suspended their operations in Russia saying they would work with clients and partners to cease all transactions there. This would terminate all the transactions happening using MasterCard and Visa cards in the country. After the Western sanctions imposed on Russia which have frozen the country’s central bank’s assets worth $640 billion, the pulling out of payments firms is touted to be an increased worry for Russians who are bracing unprecedented inflation, economic hardships and shortage of essential imported goods
According to an UnionPay note issued in 2017, more than 85% ATMs accepted UnionPay cards for withdrawing Russian roubles. The company had said that about 600,000 POS terminals and 100,000 ATMs accepted UnionPay cards, and the numbers must have gone up in the last four years. Therefore, the transition from American companies to UnionPay should be smooth.