According to a report by Bloomberg, Sberbank PJSC said it’s weighing the option of issuing cards using Russian payments system Mir and China’s UnionPay following Visa Inc.’s and Mastercard Inc.’s decision to close operations in Russia. The credit card companies pursued such actions after Russia invaded Ukraine.
This move could give Russians the ability to make several payments overseas due to UnionPay working in 180 countries and regions.
Visa and Mastercard announced that any transactions that are initiated with their cards issued in Russia will no longer work outside of Russia starting on March 10.
However, as the Bloomberg report observed, cards issued by Russian banks will still work in Russia using its payment system.
Sberbank, Russia’s largest bank, revealed that it would roll out timescales later on.
Visa and MasterCard are among the most prominent multinational companies that have suspended operations in Russia as a response to Russia’s invasion of Ukraine. This is part of non-governmental efforts to isolate Russia’s economy from the collective West’s economic network.
The credit companies also stated that cards issued outside of Russia won’t work at ATMs or inside of Russia.
On March 6, American Express also announced its suspension of operations in both Russia and Belarus. These decisions are “in addition to the previous steps we have taken, which include halting our relationships with banks in Russia impacted by the U.S. and international government sanctions,” American Express states.
Alfa-Bank JSC, Russia’s largest non-state lender, is working to offer cards with UnionPay.
UnionPay, a Chinese state-owned financial services corporation, is the largest card payment processing organization in China.
For now, Tinkoff Bank said it isn’t issuing such cards in the present. However, it has plans of doing so as soon as possible.
As Russia becomes increasingly isolated, it will likely turn to China for economic aid. A new Eurarsian geoeconomic axis is emerging thanks to the global bifurcation that’s taking place. New alliances and strategic partnerships will be formed as the previous neoliberal order withers away.