Sanctions
In March 2022, as a result of international sanctions during the 2022 Russian invasion of Ukraine, Apple digital wallet services Apple Pay and Google Pay stopped supporting Mir cards.[16] In March 2024 Samsung announced that Samsung Pay would no longer support Mir cards.[17]
The 2022 exit of Visa and Mastercard from the Russian market resulted in significantly increased use of the Russian Mir payment system in Russia[18] and beyond at a time when their combined penetration accounted for less than 70% of the Russian consumer credit card market.[19] Their ceasing of operations in Russia represented a US$1.5 billion annual revenue loss to the two financial services giants.[20] The result was a sharp increase in the number of Mir cards issued. As of April 1, 2022, the number of Mir-compliant cards in circulation exceeded 125 million, an increase of 10.3% from the previous quarter.[21] That sudden and sharp increase in demand created a temporary shortage of chips for Mir cards.[22] It is estimated that banks' demand for card chips is six times higher than the production capacity of their only domestic manufacturer Mikron Group.[23]
In September 2022, the US Treasury Department threatened foreign banks with secondary sanctions for servicing Mir cards. The department said in a statement: “non-U.S. financial institutions that enter into new or expanded agreements with NSPK risk supporting Russia's efforts to evade U.S. sanctions through the expanded use of the MIR National Payment System outside the territory of Russia”.[24][25] In the following weeks, large banks in a number of countries began to refuse to service Russian cards. Among them were Turkish DenizBank and İşbank, Vietnamese BIDV, Kazakh Halyk Bank, Tajik Dushanbe City. In Uzbekistan, the acceptance of Mir cards was stopped "for technical reasons".<[26]
The most serious problem for Russian citizens was the restrictions on servicing the Mir card in Turkey, one of their most popular tourist destinations. The governments of both countries are looking for a replacement for Mir. The Turkish authorities propose to use the Troy national payment system as an alternative.<[27]
According to information released by the Bank of Russia, more than 287 million Mir cards were issued by the end of Q4 2023. They account for 56% of all domestic card transactions in Russia and 55% of debit and credit card issuance.<r[28] The number of Mir cards used in Russia is expected to increase further over the coming months and years as Mastercard and Visa branded cards are slowly phased out of circulation.<r[28]
The introduction of the Mir payment card and SPFS (Russia's own financial plumbing) has shown that Russia no longer needs Visa or Mastercard to process domestic card payments. Mir has processed most domestic card payments in Russia since 2015, while the main role of foreign operators such as Visa and Mastercard was to run international transactions.<r[29] Russian banks have considered issuing debit and credit cards with China's UnionPay on them to replace Visa and Mastercard in the processing of international transactions, UnionPay has a wider reach compared to Mir and is accepted in more than 180 countries worldwide. The result would be that Mir would continue to process domestic card payments and UnionPay would replace Visa and MasterCard in the processing of international transactions.<r[30]
It remains to be seen whether Visa and Mastercard will be allowed to return to the Russian market once the conflict ends. As Ola Oyetayo, the chief executive of payments platform Verto, said "Russian banks that have found themselves scrabbling may not give the US networks another chance: In the long term, they may say once bitten, twice shy – they may not switch back even if they become an option again".<r[31]
On February 23, 2024, the United States Department of the Treasury imposed sanctions against the Mir card operator – NSPK. This decision has no consequences on the territory of Russia, but could potentially create problems with the use of cards in other countries.<r[32]
