Infotech

Three things to know about UnionPay, the alternative to Visa and Mastercard chosen by Russians



He is one of the big winners of the war in Ukraine. Russian banks announced on Sunday March 6 that they were working on issuing bank cards from the Chinese UnionPay network, in response to the decision by the giants Visa, Mastercard and American Express to suspend their operations with Russia after the military intervention in Ukraine.

If UnionPay is relatively unknown in Europe, it is the leader on its playground and its 1.4 billion inhabitants. Beijing only had to stretch out its arms to recover this market. Here are three things to know about this alternative popular with Russians.

1. Some 180 countries already use UnionPay

Also known as CUP (China UnionPay), the card issuer brings together 175 Chinese banks or financial institutions, and is present in almost as many countries and regions.

Founded in 2002, the group extends its tentacles internationally ten years later – in parallel with the rise of the Chinese economy and mass tourism. In France, these payment cards are accepted where Chinese tourists tend to draw: in airports, hotels and in department stores.

2. This network will complement that of Mir

Russia had already started, after the annexation of Crimea in 2014, worked on “a plan B”. The Visa and MasterCard networks having then already withdrawn from Russia, Moscow had launched a Russian system of payment cards, Mir. According to the company, more than 100 million Mir cards have been issued in the past seven years. Whole sections of the population are already required to have them: retirees, for example, are obliged to do so in order to receive their pensions, as are employees of state budgetary bodies. But with a size limit: Mir has only spread to a handful of countries. Apart from Russia, Turkey, Vietnam, Armenia and a few others, no salvation.

And UnionPay is precisely trying to connect to Mir following these events. “Sberbank is working on the possibility of issuing co-branded Mir-UnionPay cards. We will inform you later about the issuance schedule, ”explained the number 1 of the Russian banking sector Sberbank. “We are already working on issuing UnionPay cards, China’s national payment system,” Alfa Bank also said on its Telegram account. According to Russian news agencies, Rosbank, Tinkoff-Bank, Raiffeisen and MKB have all indicated that they are also working on this file.

3. The Russians had no choice

This is in any case what asserts Sebastian Paris Horvitz, director of research at La Banque Postale Asset Management. “The Russians must team up with UnionPay, already operational in this gigantic market that is China, to continue to be able to use credit or debit cards, on their territory or abroad. »

Changing supplier, deploying a new infrastructure, assigning new cards and payment terminals… “Russia is isolated and has no choice if it wants to allow its citizens to continue to do something as natural as using its Carte Bleue”, explains Sebastian Paris Horvitz. For UnionPay, it’s “win-win”: “if it works, not sure that the Russians will backtrack when we get out of the crisis, and the Chinese will have won a strategic partner. »

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