Following the blockade by Visa, Mastercard, and American Express on purchases in Russia, new solutions have been found. For example, the Mir card system is quickly gaining traction. Interestingly, that solution is co-developed with China’s UnionPay and enables users to make payments through Mastercard and Visa-issued vehicles.
Mir Is The New King In Russia
The Mir payment system is not new, as it has been active across Russia for some time now. However, it never gained significant traction as there was no need for users to go beyond traditional payment rails. That situation has changed since Russian officials decided to wage war in Ukraine, forcing payment service providers to cut ties with the Eastern European nation.
Through Mir, holders of a Visa or Mastercard can access funds, complete domestic transfers, and make withdrawals. However, that will only work until their bank cards expire. Neither Visa nor Mastercard will issue new cards to anyone in Russia. On the other hand, Mir is 100% central bank-owned. Additionally, the solution was brought to life since Russia annexed Crimea in 2014.
While one must commend the decision by Visa and Mastercard, the impact will be minimal. Instead, foreign payments will become a bigger issue when Russians travel abroad or shop online. Moreover, foreigners cannot make payments to Russian firms or withdraw cash in the country. Unfortunately, Mir will not offer a solution to that problem [yet].
Interestingly, these developments are likely to fuel broader Mir adoption. Its payment cards are accepted in various countries like Vietnam, Belarus, and Turkey. Whether it will have long-term success is something else, as other countries are unlikely to welcome this alternative payment solution with open arms. Instead, Russians may find themselves more isolated moving forward.