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Russia is turning to Chinese microchip manufacturers to fill the growing demand for bank cards linked to the Mir payment system amid sanctions, reported Reuters citing an executive with the domestic payment system.
The sanctions, announced by the US and its allies following the country’s military attack on Ukraine, seek to alienate Moscow’s financial system.
Russia’s National Card Payment System (NSPK) board member Oleg Tishakov said that country is dealing with a shortage of microchips after Asian manufactures halted production because of the coronavirus pandemic and European suppliers cut their ties with Moscow to comply with sanctions.
Tishakov said: “We are looking for new microchip suppliers and found a couple in China, with certification process ongoing.”
He did not divulge further details on the development.
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As part of the sanction, Russian lenders were cut off from the international payment system SWIFT. Several payments and card companies, including Mastercard, Visa and JCB, suspended their operations in the country and stopped their services to Russian expatriates.
Technology giants Apple and Google also stopped offering their digital wallet services to Russians in response to the Ukraine crisis.
The Russian banks are said to be facing increased demand for MIR cards after the suspension of services by international payment firms in the country.
Last month, a report by Reuters said that the Russian banks are looking to tap China’s UnionPay to issue MIR cards and circumvent sanctions.
MIR, operated by NSPK, is also accepted by some lenders in banks in Turkey, Vietnam, Armenia, Tajikistan, Belarus, Kazakhstan, Kyrgyzstan, Uzbekistan, South Ossetia, and Abkhazia.
Last month, Ukraine’s central bank called upon apex banks of these countries to stop servicing MIR cards in their ATM and POS networks.