Several Russian banks on Sunday announced plans to start issuing cards using the Chinese UnionPay card operator system, in a move to soften the effect of withdrawal of Visa and MasterCard held by Russian citizens.
Mastercard and Visa have pledged to cease operations in Russia and disconnect all the country’s banks from their payment systems in days due to the latest western sanctions related to Moscow’s ongoing war in Ukraine.
However, the banks’ new move will enable the holders of UnionPay to use them for paying and withdrawing cash abroad.
The Russian banks include Sberbank, Russia’s biggest lender, as well as Alfa Bank and Tinkoff issued announcements regarding the switch to UnionPay due to the latest developments.
The drastic step makes the use of cards issued in Russia outside the country implausible. Likewise, cards that were issued outside of Russia will stop working in Russia.
Visa and Mastercard are the latest international brands that are taking harsh moves towards Russia over the Ukrainian conflict.
Earlier, companies such as PayPal, Netflix, Intel, Inditex, Airbnb and Rolls Royce announced they were leaving the country’s market.
Some of Russia’s banks, like Pochta Bank, Gazprombank, Promsvyazbank, Sovcombank and several other minor banks had been previously working with the UnionPay card operator’s system.
UnionPay is an international payment system founded in 2002 and received international status in 2005.
Headquartered in Shanghai, the company reportedly operates in more than 180 countries across the globe, including Switzerland, Greece, Italy, Spain, Germany, Mexico, Cyprus, Thailand, India, Israel, Portugal, Croatia, Poland, Serbia, Hungary and Austria.
By EconomicConfidential
