On the back of Mastercard and Visa's intentions of cutting their services in Russia amid the ongoing military invasion of Ukraine, leading Russian banks are seeking to issue cards that function on a Chinese payment system.
Tinkoff Bank and Sberbank stated that they are exploring the possibility of payment cards that are powered by China's UnionPay system. The Sberbank, the largest bank in Russia, has also stated that it will announce the launch date in the coming days.
Both Tinkoff and Sberbank informed their users that they could use Mastercard and Visa for transactions within Russia; however, they soon will stop working for payments outside of Russia, reported India Today.
Furthermore, the Russian central bank also dished out a warning to all cards users of the Mastercard or Visa systems that it will stop working for both purchases on foreign websites and transactions abroad.
Visa, Mastercard Exit Russia
On the back of the larger move by the West to isolate Russia and cut itself from the global financial system, Russian banks are scrambling to find fresh modes to facilitate cross-border payments after numerous foreign companies have suspended financial services in the country. Along with Mastercard and Visa, American Express has also withdrawn its services amid the Ukraine crisis over the weekend.
They also followed significant brands from Apple to Shell and Ikea in pulling out of the Russian market. However, China has reaffirmed its relations, with the foreign minister on March 7 calling Russia Beijing's "most important strategic partner."
Xi Jinping-led China has also refused to publicly criticize Russia's invasion of Ukraine but distanced itself by calling for dialogue and respect of national sovereignty.
What Is China's UnionPay?
The Chinese payment processor UnionPay profits from its role as a payment monopoly strengthened by the massive Chinese population and the world's second-largest economy. This is also helping it grow into a serious competitor to Mastercard and Visa.
Its website accepts UnionPay cards at physical stores in 180 countries and regions and online stores in 200 countries and territories.
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