Wednesday, October 5, 2022

Russian Banks to Migrate to UnionPay After Mastercard and Visa Suspension

As the number of companies pulling the plugs on their operations in Russia continues to rise, banks across Russia have been left with no choice but to embrace a credit card issuance partnership with Chinese-owned UnionPay as their financial services provider. This was after Visa and Mastercard announced their decision to suspend operations in Russia.

This decision by both global payment giants has made the Russian Central Bank advise Russians with cards issued under the Visa or Mastercard payment system to make withdrawals on such cards before the March 10th deadline.

To ensure that Russians can remain connected to global money transfers and payments, Russian banks are making the switch to UnionPay which began operations in the year 2002 and has its operational feet in about 180 countries across the globe.

This is no doubt another below-the-belt blow for Russia’s economy which in the past couple of weeks has seen many major reputable companies halt their service offering to its citizens.

On its part, MasterCard made it known that its decision was made after careful and extensive deliberation with its partners and customers.

Visa Chairman and CEO Al Kelly said that the company has to take this action following the sour events that have trailed Russia’s attack on Ukraine. Kelly, however, said that this decision to halt operations in Russia is in accordance with the company’s Values.

The Mass Switch to UnionPay by Russian Banks

Although quite a number of small banks in Russia currently make use of UnionPay, the coming service suspension by Visa and MasterCard would no doubt lead to increased adoption by more mainstream financial institutions.

Without much dilly dally, a report already has it that Russia’s largest private bank Alfa-Bank is already exploring UnionPay cards. Sberbank, another heavyweight in Russia’s banking sector, is said to be working on cards dubbed with both its local payments system known as Mir and UnionPay.

Also, cryptocurrencies are still available to Russians to meet their financial obligations. Coinbase and other cryptocurrency exchanges announced that they are not placing a ban on crypto until there is a law that says so.

Victoria Nye
A Blockchain columnist who is enthusiastic about developing a network interface between the real world and the cryptosphere.

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