Report: Chinese credit card processor refuses to work with Russian banks

BEIJING (AP) — The Chinese credit card processor has refused to work with banks in Russia for fear of sanctions for its war on Ukraine, cutting off a possible alternative after Visa and Mastercard stopped trading. serve them, according to Russian media outlet RBC.

UnionPay decision affects Sberbank RU:SBER,
Russia’s largest commercial bank and smaller institutions, RBC reported on Wednesday. He cited five unidentified sources at major Russian banks.

Mastercard MA,
+0.39%
and Visa V,
+0.97%
suspended operations in Russia after the United States and other governments imposed trade and financial sanctions on President Vladimir Putin’s government for its attack on Ukraine.

Sberbank and another institution, Tinkoff Bank, have announced plans to switch to UnionPay, which is operated by Chinese state-owned banks. UnionPay is one of the world’s largest payment processors, but does almost all of its business in China.

US officials have warned that governments or companies that try to undermine sanctions will suffer the consequences. RBC said UnionPay wanted to avoid such “secondary sanctions”.

Chinese President Xi Jinping’s government has called Russia “the most important strategic partner” and criticized sanctions against Moscow. But Chinese companies and banks appear to be respecting trade and financial restrictions.

Other banks cited by RBC include Alfa Bank, VTB, Otkrytie and Promsvyazbank.

Maria D. Ervin