As A Result Of Sanctions, Russia Turns To China For Safe And Regular Supply Of Chips
JAKARTA – The Russian government has turned to suppliers of microchip manufacturers in China. This was done to avoid western sanctions. The sanctions have also boosted demand for bank cards linked to the Mir payment system.
According to an executive with a domestic payment system in Russia, recently, Western sanctions imposed on Russia for its invasion of Ukraine cut Moscow out of the global financial system and nearly half of its $640 billion gold and foreign exchange reserves (IDR 1 quadrillion).
Oleg Tishakov, board member of the National Card Payment System (NSPK), said Russia was facing a shortage of microchips as Asian manufacturers had suspended production amid the coronavirus pandemic. Meanwhile, suppliers from Europe have stopped cooperating with Moscow following the sanctions.
"We are looking for a new microchip supplier and have found a partner in China, with a certification process underway," Tishakov said at a press conference on Tuesday, March 5. But Tishakov would not give further details about their deal.
Some of Russia's largest banks currently no longer have access to the SWIFT global messaging banking system, and international payment cards Visa and MasterCard have stopped serving Russian accounts abroad. Mir's connection to Apple Pay was also removed last month.
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The NSPK issued more than 2 million Mir cards between late 2021 and March, according to Reuters calculations based on system data, with the total cards in circulation now standing at 116 million.
All major Russian banks have reported increased demand for domestic cards, some of which are now issued in co-brand with China's UnionPay, an alternative payment system to Visa and MasterCard for purchases by Russians abroad.
However, currently, Mir Card is still accepted by several banks in Turkey, Vietnam, Armenia, Uzbekistan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, and Georgia in South Ossetia and Abkhazia.