Russian banks rush to switch to Chinese card system as Visa and Mastercard suspend all operations in Russia

, Russian banks rush to switch to Chinese card system as Visa and Mastercard suspend all operations in Russia

Several Russian banks said on Sunday they would soon start issuing cards using the Chinese UnionPay card operator’s system coupled with Russia’s own Mir network, after Visa and MasterCard said they were suspending operations in Russia.

China’s bank regulator says Beijing will not join the United States and European governments in imposing financial sanctions on Russia.

China is a major buyer of Russian oil and gas and has refrained from criticising Moscow’s attack on Ukraine.

Beijing disapproves of the sanctions, which it believes lack a legal basis and “will not have a good effect,” said Guo Shuqing, the chairman of the China Banking and Insurance Regulatory Commission.

“We will not join such sanctions, and we will keep normal economic, trade and financial exchanges with all the relevant parties,” Guo said at a news conference.

Visa said on Monday it was taking prompt action to ensure compliance with applicable sanctions, adding that it will donate $2 million for humanitarian aid. Mastercard also promised to contribute $2 million.

“We will continue to work with regulators in the days ahead to abide fully by our compliance obligations as they evolve,” Mastercard said in a separate statement late on Monday.

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In 2021, about 4% of Mastercard’s net revenues were derived from business conducted within, into and out of Russia. Meanwhile, business conducted within, into and out of Ukraine accounted for 2% of its net revenues, according to a filing on Tuesday.

The government sanctions require Visa to suspend access to its network for entities listed as Specially Designated Nationals, a source familiar with the matter told Reuters. The United States has added various Russian financial firms to the list, including the country’s central bank and second-largest lender VTB (VTBR.MM).

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On Saturday, the U.S., Britain, Europe and Canada announced new sanctions on Russia – including blocking certain lenders’ access to the SWIFT international payment system.

Russians rushed to ATMs and waited in long queues on Sunday and Monday amid concerns that bank cards may cease to function, or that banks would limit cash withdrawals. read more

Russia calls its actions in Ukraine a “special operation”.

Many Western banks, airlines and more have cut ties with Russia, calling the country’s actions unacceptable. European nations and Canada have shut their airspace to Russian aircraft, according to Reuters.

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