The international acceptance of MIR, Russia’s answer to Visa and Mastercard, shrunk dramatically last week as major banks from Armenia, Kazakhstan, Tajikistan, Turkey, Uzbekistan and Vietnam announced the suspension of such transactions.
These announcements came soon after the US authorities warned banks outside the US that supporting MIR transactions could expose them to the risk of secondary sanctions.
Even though Russia’s National Payment Card System (NSPK) — the organization that supports the Mir system — “is not a blocked entity under the [sanctions regulations],” the US Treasury stated, “NSPK and the MIR National Payment System process transactions for designated Russian banks and may be used to process transactions involving other sanctioned persons or activity under [these regulations].”
Thus, “non-U.S. financial institutions that enter into new or expanded agreements with NSPK risk supporting Russia’s efforts to evade US sanctions through the expanded use of [MIR] outside the territory of the Russian Federation.”
Last week also saw MIR and NSPK exposed to serious DDoS attacks. These were launched by Ukrainian hacktivists, reported Russian business daily Kommersant, citing industry sources.
The decision of Visa and MasterCard in early March 2022 — followed by Chinese UnionCard — to back away from Russia has affected dozens of millions of card holders from this country, even though Russia managed to keep their cards active for domestic transactions.
Russia’s answer has been to accelerate the adoption of the MIR cards.
In spite of these efforts, MIR cards could never be used in more than in a handful of countries. Unit recently, these included including Armenia, Belarus, Kazakhstan, Kyrgyzstan, South Korea, Tajikistan, Turkey, Uzbekistan and Vietnam, as well as Abkhazia and South Ossetia, two territories which have been controlled by Russia since the Russo-Georgian war in 2008.
According to media reports, financial organizations from Cuba, Egypt, Iran, Malaysia, Nicaragua, Nigeria and Thailand also consider, or considered recently, adopting the MIR card.
As of March 1, 2022, MIR claimed 116 million cards in Russia — which accounted for 25.7% of bank card operations in Russia and 32.5% of new card issuance, according to Russia’s central bank.
Source : East-West Digital News