After Visa and Mastercard-Aus
Russia relies on Chinese credit cards
03/06/2022, 6:10 p.m
The Russians feel little of the war that the Kremlin is waging against Ukraine. The banking sector is an exception: after Mastercard and Visa stopped operating, long lines formed in front of the ATMs in Moscow. The central bank hopes to be replaced by the Chinese Unionpay system.
According to the Russian central bank, after Mastercard and Visa suspended their business in Russia, many domestic institutions are considering using the Chinese credit card system Unionpay. Numerous financial institutions, including Sberbank, wanted to issue corresponding cards, the central bank said. Several institutes are already using Unionpay, which is established in 180 countries. Credit cards issued in Russia that are based on the Mastercard or Visa system will no longer work abroad as of Wednesday, the central bank warned. Within Russia, the cards would be accepted until their expiry date.
Russia’s largest bank — not yet sanctioned Sberbank — pledged this morning that Russian Visa and Mastercard customers will be able to use their cards to pay and withdraw money within the country, even after the shutdown, in shops, online commerce or when making transfers. The banking transactions could be done independently of the international systems, it said.
But those who live abroad should now quickly withdraw money with the cards or pay for larger expenses before the systems stop working, the bank said. Although the appeal was only aimed at people living abroad with Russian Visa and Mastercard cards, long queues formed at ATMs in Moscow in the morning. According to Sberbank, the money cards with the Mir logo should continue to work in Turkey, Cyprus and some other countries. Mir is a payment system of the Central Bank of Russia.
Russian cards no longer work abroad
Visa announced that it would work with customers and partners in Russia “to halt all Visa transactions in the coming days.” After that, cards issued in Russia would no longer work abroad. Credit cards issued by financial institutions outside the country could no longer be used in Russia.
Mastercard announced identical steps. Visa CEO Al Kelly said he regretted the impact the measure will have on employees, customers, partners, merchants and cardholders in Russia. “This war and the continuing threats to peace and stability require that we respond in accordance with our values.” Mastercard said the decision was not easy to make. “Mastercard has been operating in Russia for more than 25 years.” The almost 200 employees will continue to be paid their wages. If it is “reasonable and legally permissible”, they want to resume operations.
The Wall Street Journal recently reported that in 2020, of the debit and credit cards issued in Russia, Visa and Mastercard cards accounted for around 74 percent of the country’s payment transactions.