Russia’s Payments System Gets Around Mastercard, Visa Departure

While sanctions against Russia over its invasion of Ukraine have had a devastating effect on the country, it hasn’t stopped Russians from being able to use their Mastercards or Visa cards.

As The Wall Street Journal reported Tuesday (March 29), the decision by the two card companies to stop doing business in Russia may not be as earth-shattering as once thought, as the cards use a homegrown Russian system to process payments.

The National Payment Card System — or NSPK, as it is known in Russian — oversees card transactions in Russia, even if those cards carry Visa or Mastercard logos.

Read more: Mastercard, Visa, PayPal, Amex Suspend Russian Operations

The two credit card giants, along with American Express, PayPal and the Discover network, all suspended operations in Russia in early March.

The NSPK dates back to 2014, when Russia was sanctioned for its earlier invasion of Crimea. At the time, the Journal reported, Visa and Mastercard accounted for almost all of Russia’s card network activity, leaving hundreds of thousands of people with useless cards.

The Russian government saw they had a vulnerability, leading President Vladimir Putin to sign a law in 2015 that created NSPK and essentially forced Mastercard and Visa to turn over processing of the transitions to the new system.

That year, NSPK launched Mir, its own card network, although most Russians stuck with Visa and Mastercard. In 2017, Moscow passed a law requiring banks handling pension payments and public sector worker salaries to make those funds available through Mir cards, causing usage to jump from 2 million to 95 million between 2016 and 2020.

The report noted that the departure of Visa and Mastercard still means that in many cases, Russians can’t use their cards outside of the country, and Mir cards are only accepted in a handful of countries, most of them former Soviet states.

See also: Apple, Google Mobile Payments Systems Stop Supporting Russia’s Mir Card

The news comes just days after reports that Apple and Google had closed a loophole that allowed some Russians to use their mobile payment services in spite of the sanctions.

“Apple has informed NSPK it is suspending support for Mir cards in the Apple Pay payment service,” the National Card Payment System said last week. “Starting from March 24th, users cannot add new Mir cards to the service. Apple will stop all operations of previously added cards over the next few days.”