Russian Banks Switch To China's UnionPay After Mastercard And Visa Suspend Operations

Russian banks suspended from operating on Mastercard’s MA and Visa’s V card payments networks are switching their business to the rival Chinese system UnionPay.

What Happened: UnionPay was launched in 2002 as the Chinese equivalent of Mastercard and Visa. It operates under the approval of the People's Bank of China, the nation’s central bank, and it is the only interbank network linking all automatic teller machines within China.

UnionPay cards are used in 180 countries, including the U.S. and Taiwan.

The Russian financial news site VC.ru reported that three Russian banks – Sberbank SBRCY, Tinkoff Bank and ICD – are exploring the possibility of issuing a co-badged card between UnionPay and Mir, a Russian-based card operating system, while Alfa Bank is working on the rollout of UnionPay-branded cards.

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Why It Happened: On Saturday, Mastercard and Visa suspended their Russian-based operations in protest of the nation’s invasion of Ukraine. As a result, their respective branded cards issued by Russian banks will not be supported by their networks, either within Russia or in other countries.

Mastercard announced its decision in a statement that said, “We don’t take this decision lightly. 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. When it is appropriate, and if it is permissible under the law, we will use their passion and creativity to work to restore operations.”

Visa issued a statement declaring they “regret the impact this will have on our valued colleagues, and on the clients, partners, merchants and cardholders we serve in Russia. This war and the ongoing threat to peace and stability demand we respond in line with our values.”

Photo: UnionPay