More than a year after Russia decided to create its own payment network to counter Visa and MasterCard; the country’s central bank has announced that has begun issuing payment cards to seven of the prominent banks in the country with further issuance to thirty-five banks in total expected in the near future. Thus far, issuance has focused on testing basic functions of the new “Mir” cards like cash withdrawals and payment transactions.
The move to launch its own payment network came after Visa were forced to suspend service with some Russian banks in order to comply with Western sanctions placed on Russia after its annexation of Crimea. Commenting on the milestone, Olga Skorobogatova, deputy chair of the Bank of Russia,
“In a year and a half we have been able to create not only a national payment system, but also to solve two strategic objectives. First, we transmitted the processing of major international payment systems to the NPCS operation clearinghouse. The second objective is the issuing of our own national card.”
The Mir cards will work domestically and will be cobranded with MasterCard, JCB and American Express to enable international use by consumers in a deal similar to India’s RuPay agreement with Discover. While it is not clear whether Russian authorities will push the new network to the same degree as China UnionPay (CUP) and become an additional global network, what is clear is that by creating this network, the Russian payments landscape will rely far less on existing payments infrastructure provided by Visa and others.
Overview by Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service at Mercator Advisory Group
Read the full story here
