China’s Visa Alternative, Mastercard Moves Away From Russia – Reports

China’s UnionPay system has refused to cooperate with Russia’s biggest lender, Sberbank, and suspended talks with other banks for fear of secondary sanctions, the RBC news site reported on Wednesday.

Russian banks planned to issue cards using UnionPay after Visa and Mastercard suspended operations last month under sanctions imposed following Moscow’s invasion of Ukraine. Russian lenders, including Sberbank, are under US, UK and European sanctions.

“The project [to issue UnionPay cards] is temporarily suspended,” RBC said citing one of several unnamed banking sources.

“They don’t officially confirm it’s related to sanctions, saying it’s on hold until further instructions.”

UnionPay has also suspended negotiations with other sanctioned banks, including Russia’s largest private lender Alfa Bank, VTB and Otkrytie.

UnionPay accounted for 1% of Russian bank cards in 2020, according to Retail Banking Research. Demand for UnionPay cards has increased tenfold following unprecedented Western sanctions over Russia’s war in Ukraine.

Russian UnionPay cardholders have reported difficulties using the system to make payments in the United States, Israel, Europe, Asia and the Middle East.

The Central Bank of Russia has reassured Visa and Mastercard cardholders that the systems will continue to operate in Russia until the cards expire.

Russia and China proclaimed a “boundless” friendship on the eve of Moscow’s invasion of Ukraine.

However, later reports suggested China’s reluctance to breach unprecedented Western sanctions.

Russia news

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