LONDON (AP) — Russia’s top banks are considering using a Chinese payment rival after Visa and Mastercard suspended operations, while all major global accounting firms said they would pull out of Russia in the latest trade fallout. on the invasion of Ukraine.
Ernst & Young and Deloitte on Monday severed ties with their operations in Russia, both saying they would work to support thousands of colleagues who would be affected. Ernst & Young cited what it called the “shocking and heinous war in Ukraine”, and Deloitte also said it would leave allied Belarus in Moscow.
KPMG and PricewaterhouseCoopers, the other so-called big accounting firms, announced their exit from Russia a day early.
A host of foreign companies have suspended their financial services in Russia – along with major brands from Apple to Shell and Ikea – as part of a broader drive by the West to isolate Russia and cut it off from the global financial system. Visa, Mastercard and American Express withdrew their services over the weekend.
This has left Russian banks scrambling to find new ways to facilitate cross-border payments.
Sberbank and Tinkoff Bank said on Sunday that they are considering the possibility of payment cards powered by China’s UnionPay system. Sberbank, Russia’s largest bank, said it would announce the launch date later.
Sberbank and Tinkoff told users they will be able to use Visa and Mastercard for transactions in Russia, but will stop working for payments outside the country after Wednesday.
The Russian central bank has warned that all cards using the Visa or Mastercard systems will stop working for purchases on foreign websites and transactions abroad.
As Western companies retreat from Russia, China has become a vital link. Beijing reaffirmed its ties on Monday, with the foreign minister describing Russia as China’s “most important strategic partner”.
China refused to criticize Ukraine’s invasion but tried to distance itself by calling for dialogue and respect for national sovereignty.
Chinese payment processor UnionPay is benefiting from its payment monopoly position backed by China’s large population and the world’s second-largest economy, helping it to become a serious rival to Visa and Mastercard.
UnionPay cards are accepted at physical stores in 180 countries and regions and online stores in 200 countries and regions, according to its website.