Russia Turns to Chinese Banks for Help as Visa, Mastercard Leave Country

The Russian Central Bank announced on Sunday that some of the country's banks plan to issue cards using UnionPay, a Chinese card operating system with Russia's Mir payment system, after Visa and Mastercard suspended its operations in the country over its invasion of Ukraine.

Credit cards issued by Russian banks using Visa and Mastercard payment systems will also stop functioning overseas after March 9, according to Reuters.

UnionPay is a Chinese system that is enabled in 180 countries and specializes in providing cross-border payment services. In using UnionPay as an alternative, Russia's Mir Network, a payment system for electronic fund transfers and is sponsored by the Russian government, will partner with the Chinese system to issue co-badged cards.

Sberbank, Russia's largest lender, said that it is "studying the possibility of issuing co-badged cards [called] Mir-UnionPay" and that they will announce the launch date of those cards "at a later time," Russian news agency TASS reported.

Cards that combine Mir network and the UnionPay system will allow users to make payments and cash withdrawals abroad, according to TASS. Alfa Bank, a private bank in Russia, is also considering adopting this option.

Alfa Bank said that they are "already at work to launch cards based on UnionPay," with Tinkoff Bank also considering this step, TASS and Reuters reported. However, some Russian banks are already using the Chinese payment system including the Russian Regional Development Bank (VBRR), Pochta Bank, Gazprombank, Rosselkhozbank, Bank St. Petersburg, and Promsvyazbank.

Visa and Mastercard on Saturday joined the growing list of companies suspending its operations in Russia over the invasion. Visa's CEO, Al Kelly, denounced the Russian invasion in a statement and called it an "ongoing threat to peace and stability" that requires a response "in line with our values."

"We are compelled to act following Russia's unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed," he added. "We regret the impact this will have on our valued colleagues, and on the clients, partners, merchants and cardholders we serve in Russia."

Visa will work with its clients and partners in Russia to halt all transactions within the coming days. This means Visa cards issued outside of Russia will no longer function inside the country, according to the company's statement.

Mastercard made a similar move, announcing that they will also suspend operations in Russia, which means cards issued by Russian banks will not be supported by Mastercard. Also, cards issued abroad will not work inside Russia.

"We don't take this decision lightly," the company's statement read. "Mastercard has operated in Russia for more than 25 years. We have nearly 200 colleagues there who make this company so critical to many stakeholders. As we take these steps, we will continue to focus on their safety and well-being, including continuing to provide pay and benefits."

The decision by Visa and Mastercard came shortly after Ukrainian President Volodymyr Zelensky called for the companies to end services in Russia during a call with U.S. lawmakers, according to the Associated Press.

Similarly, fashion businesses Zara and Puma said on Saturday it will halt operations in Russia while PayPal also shut down its services in the country.

Newsweek contacted UnionPay for comments and will update this story when a response is received.

Russia Turns to Chinese Banks for Help
Cards that are combining Mir network and the UnionPay system will allow users to make payments and cash withdrawals abroad. Above, an illustration of the Visa logo. Photo by Matt Cardy/Getty Images