Russian Banks Flock For Refuge In Chinese Payment Systems

As western companies continue to make decisions whether to suspend operations or withdraw from Russia due to its invasion of Ukraine, China has become a possible Plan B.

Russian banks that include Sberbank, the country’s largest bank by assets, and Alfa Bank said that they are exploring the possibility of issuing co-badged cards powered by payment systems like Chinese state-owned UnionPay and Russia’s Mir for international payments.

Sberbank said it will soon reveal a launch date for such cards, while Alfa bank said it is already at work on launching cards based on UnionPay. Russian lender Tinkoff Bank also has similar plans.

The banks’ announcement came in the aftermath of suspensions by Visa, Mastercard, and American Express of their operations in Russia.

Those suspensions have been put under sweeping financial sanctions from countries such as the United States and UK. Within Russia, cards issued by Visa, Mastercard, and American Express can still be used until they expire, but the same cards will no longer work for payments outside the country. Nor will credit cards issued outside of Russia be usable at the country’s stores or ATMs.