Russia is turning to microchip manufacturers in China to circumvent sanctions that have boosted demand for bank cards linked to the Mir payment system, an executive with the domestic payment system said.
Sanctions imposed on Russia over its invasion of Ukraine have cut Moscow off the global financial system and from nearly half of its $640 billion in gold and foreign exchange reserves.
Oleg Tishakov, a board member with the National Card Payment System (NSPK), said Russia is facing a shortage of microchips as Asian manufacturers suspend production amid a coronavirus pandemic and European suppliers have halted supply.
“We are looking for new microchip suppliers and [have] found a couple in China, with certification process ongoing,” Tishakov told a conference on Tuesday, without giving further details.
Some of Russia‘s biggest banks no longer have access to the SWIFT global banking messaging system, and Visa and Mastercard have stopped servicing Russian accounts abroad. Mir’s connection to Apple Pay was removed last month.
NSPK issued over 2 million Mir cards between the end of 2021 and March, according to Reuters calculations based on the system’s data, with total cards outstanding now at 116 million.
All major Russian banks have reported an increased demand for the domestic card, which some now issue in a co-brand with China’s UnionPay, an alternative payment system to Visa and Mastercard for purchases by Russians abroad.
Mir cards are also accepted by some banks in Turkey, Vietnam, Armenia, Uzbekistan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and Russian-occupied breakaway regions in Georgia.
• Reuters with additional editing by Jim Pollard
ALSO on AF:
Russian Banks Seek Tie-Up With China’s UnionPay After Card Ban
Russian Firms Opening China Bank Accounts to Evade Sanctions
China Can’t Take Place of SWIFT System, Analysts Say
Chinese Payment Stocks Soar Amid SWIFT Curbs Against Russia
Asia Markets Brace For Turmoil As Russia Faces SWIFT Cut-Off