London Daily

Focus on the big picture.
Monday, Jun 30, 2025

Russia Built Parallel Payments System That Escaped Western Sanctions

Russia Built Parallel Payments System That Escaped Western Sanctions

Crimea sanctions spurred Russia to build its own Mir payments network, taking the sting out of Visa, Mastercard exits
Western sanctions have disrupted nearly every part of Russia’s financial system, but there is one big exception.

The domestic-payments system continued to work smoothly after Visa Inc. and Mastercard Inc. pulled out earlier this month. While the card giants’ exit from Russia was viewed as a significant move by many in the West, the reality on the ground was anything but. Most Russian consumers never lost the ability to use their Mastercard- and Visa-branded cards to pay for things within the country.

There were roughly 197 million Mastercard or Visa cards in Russia at the end of 2020, according to the Nilson Report, a trade publication. But behind the scenes, the cards don’t rely on the U.S. networks’ systems to process payments in Russia. For years, they have used a homegrown system overseen by Russia’s central bank.

The National Payment Card System – known by the Russian initials NSPK – runs the financial plumbing that supports card transactions in Russia, even for cards with the Visa and Mastercard logos.

The system was part of Moscow’s eight-year effort to insulate the Russian economy from Western financial pressures. The Kremlin has also aggressively bolstered a private Russian card company, Mir, which is built on NSPK’s infrastructure. More than 100 million Mir cards have been issued since its launch in 2015, according to the Mir website.

The effects of harsh economic sanctions against Russia are already beginning to be felt around the world. Greg Ebb of the Wall Street Journal joins other experts to explain the significance of what has happened so far and how the conflict can transform the global economy. Photo illustration: Alexander Hotz
The resilience of Russia’s payments system is a rare victory for President Vladimir Putin in his financial war with the West. Russia failed to break its dependence on Western imports, and the country was left in dire need of key parts for industrialization. Before the war, Russia had amassed $630 billion in reserves to ensure it could protect the ruble, but that effort was undermined when the United States and the European Union froze the assets of the Russian Central Bank.

“We have provided our national security in the field of payments,” said Alma Obaieva, head of the National Payments Council, a Russian trade association.

The decline of Visa and Mastercard had significant consequences for the Russians: in many cases, their cards now do not work outside the country. The Mir network extends to a few countries besides Russia, most of which are former Soviet republics. Russian officials have held talks in recent days to expand it to Venezuela and Iran, according to reports from state news agency TASS. Some Russian banks have said they are exploring partnerships with China’s UnionPay to issue cards that their customers can use more widely.

However, the inability of Russians to use their cards to withdraw money or make purchases abroad is in line with the Kremlin’s goal of holding assets in the country. Some Russians who fled said cutting Visa and MasterCard played Putin’s favour.

On a call in February to discuss possible Russia sanctions, executives from Visa, Mastercard and other payments companies told Treasury officials that blocking US networks from handling Russian banking transactions wouldn’t be particularly painful, according to people familiar with the matter. They said the sanctions would simply push more transactions to Mir.
Newsletter

Related Articles

0:00
0:00
Close
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
Russian Shadow Payments via Cryptocurrency Reach $9 Billion
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
×