China’s UnionPay Reportedly Suspends Cooperation With Russian Banks Over Fear of Western Sanctions

UnionPay cards displayed on March 7, 2022. Florence Lo/Reuters

China’s largest credit card brand UnionPay has reportedly suspended its negotiations with Russian banks on issuing new bank cards for their customers over fear of Western sanctions.

According to The Moscow Times, the Chinese credit processor has recently halted talks with some major Russian lenders, including Sberbank, Russia’s largest bank by assets, due to concerns about being implicated in “secondary sanctions.”

Secondary sanctions are intended to prevent third parties from trading with sanctioned countries by threatening to cut off the third party’s access to the country that issued the sanctions.

Amid the ongoing war in Ukraine, payment giants Visa, Mastercard, and American Express have joined Western firms in suspending operations in Russia, leaving Russian banks with limited alternatives, such as China’s homegrown UnionPay.

As Western nations condemn Russia’s invasion of Ukraine, Beijing has refrained from calling out Moscow’s actions and continued to allow Chinese companies such as UnionPay to conduct business with Russian partners.

The report cited Russia’s business newspaper RBC Daily, which quoted several unnamed Russian banking sources, adding that UnionPay also suspended negotiations with other sanctioned banks, including some of Russia’s largest private lenders, Alfa-Bank, VTB, and Otkrytie.

“The project [to issue UnionPay cards] is temporarily on hold,” one of the unnamed sources reportedly told RBC. “They don’t officially confirm that it’s tied to sanctions, saying it’s on pause until further instructions.”

The Epoch Times reached out to UnionPay through its online service to verify this claim. The company said it had not received any relevant notification or information regarding the situation.

In March, amid U.S., UK, and EU sanctions, Russia’s three largest lenders—Sberbank, Alfa-Bank, and Tinkoff—announced plans to issue credit cards powered by China’s UnionPay system. At a press conference on March 3, the China Banking and Insurance Regulatory Commission (CBIRC) also pledged “to continue business and financial operations” with no sanctions on Russia.

UnionPay claims to be one of the largest global payments processors, but almost all of its business takes place within China.

Aided by the Chinese Communist Party, UnionPay is the provider of most card payments in China. Its cards are now accepted in 180 countries and regions, according to its website. Numerous Russian banks, including Rosselkhozbank, Pochta Bank, and Gazprombank, offer services with UnionPay.

A Russian state media report on April 13 claimed that there were about 500,000 UnionPay credit cards currently in Russia. Following Visa and MasterCard’s exit, many in the country turned to UnionPay cards.