Russia looks to China for assistance with domestic microchip bank cards

By Nikita Chaurasia  | Date: 2022-04-07

Russia looks to China for assistance with domestic microchip bank cards

Russia is reportedly seeking out Chinese microchip manufacturers to bypass the sanctions imposed by Western countries, which has caused an uptick in demand for bank cards linked to Mir payment systems.

For the unaware, Mir payment systems are payment systems established by the Central Bank of Russia to facilitate electronic fund transfers. As a direct consequence of its invasion of Ukraine. Russia has been clipped off from the global financial system, resulting in the withdrawal of half of its forex and gold reserves amounting to USD 640 billion.

According to Oleg Tishakov, a top executive with the National Card Payment System (NSPK), Moscow is facing a significant scarcity of microchips and Asian manufacturers have suspended production due to the pandemic, and now European suppliers have ceased complying due to the sanctions levied on Russia.

He further said that they are seeking fresh suppliers, some of them from China and that the certification process is currently underway.

It is worth noting that some of Russia's largest banks have forfeited access to the SWIFT banking messaging system. Furthermore, international payment cards Visa and Mastercard have halted their servicing for Russian accounts found abroad. Mir's connection to Apple Pay was also rejected last month.

Notably, NSPK released nearly 2 million Mir cards between the end of last year and March 2022, for a combined amount outstanding on the cards of USD 116 million, according to system data.

As of now, all predominant Russian banks have called for domestic cards that are also co-branded with China's Union Pay, as an alternative to Visa and Mastercard for Russians living overseas.

Nonetheless, banks in some countries, including Vietnam, Uzbekistan, Armenia, Turkey, and Belarus, continue to accept Mir cards, which is a beacon of hope for Russian foreign nationals.

Source credit:

https://money.usnews.com/investing/news/articles/2022-04-05/russia-turns-to-china-for-microchips-for-in-demand-domestic-bank-cards

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Nikita Chaurasia     aeresearch.net

Nikita Chaurasia

An accomplished professional in the field of content development, playing with words comes naturally to Nikita Chaurasia. After completing her post-graduate MBA degree in Advertising and PR, Nikita worked across numerous content-driven verticals, undertaking diverse r...

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