China UnionPay Expands In Russia To Fill Visa/Mastercard Void

August 3, 2022
Two more of Russia’s largest banks are preparing to issue China UnionPay cards, continuing a trend that has gathered momentum since the invasion of Ukraine.

Two more of Russia’s largest banks are preparing to issue China UnionPay cards, continuing a trend that has gathered momentum since the invasion of Ukraine.

According to a report by Russian news site Izvestia, Moscow Credit Bank (MKB) and DOM.RF are planning to launch UnionPay cards in early 2023.

The DOM.RF cards are also expected to be co-badged with Mir, the Bank of Russia’s own card payment network, allowing cardholders to take advantage of UnionPay international acceptance.

Russia has become an important target market for UnionPay taking advantage of the withdrawal from the market by Visa and Mastercaard.

Currently, 11 Russian banks already issue UnionPay cards, including Gazprombank, Russian Standard and Post Bank.

A further nine Russian banks have made indications that they will issue UnionPay cards, including the country’s largest bank Sberbank, as well as Alfa-Bank and Raiffeisenbank.

UnionPay finds receptive market for bank issuers

For much of its 20-year history, UnionPay has focused on securing overseas acceptance of its cards for the benefit of Chinese travellers.

At present, UnionPay’s acceptance network extends to 180 countries and regions, and in Southeast Asia UnionPay’s acceptance coverage is more than 80 percent.

Having built worldwide acceptance, UnionPay is now increasingly offering itself up as an alternative to international card schemes, such as Visa and Mastercard.

More than 180m UnionPay cards have so far been issued outside the Chinese mainland. Although this number is significantly lower than 4.7bn Visa and Mastercard cards issued outside the US, it is growing.

Southeast Asia, in particular, has been a key focus for UnionPay’s global expansion. In Thailand, for example, the company claims there are 15m UnionPay cards issued by banks.

In Europe, UnionPay’s first non-Chinese bank-issued credit card was launched in 2018 by Millenium bcp, Portugal’s largest private bank.

One year later, in 2019, UnionPay launched its first credit card in Russia through a partnership with Orient Express Bank.

In a statement, UnionPay said the Orient Express card would assist Russians who travel abroad and those who live in the country’s Far East region, where cross-border trades are more frequent. Russia’s far east shares a land border with Mongolia, China and North Korea.

More recently in January this year, UnionPay announced a partnership with Serbia’s domestic card scheme DinaCard to support co-badging.

Co-badging, such as the partnership with Serbia’s DinaCard, has been a particular strategic growth engine for the Chinese card scheme as it aims to sell its international acceptance to prospective bank customers and tap into lucrative cross-border flows.

According to UnionPay, the company has developed a co-badging agreement with local card switching networks in nearly ten countries, including Thailand, Mongolia and Uzbekistan

International lifeline for Russians

For Russians who wish to continue making overseas payments, UnionPay cards offer something of a lifeline.

After Visa and Mastercard “suspended” their services in Russia on March 6, and it was confirmed on March 10 that Visa and Mastercard cards issued in Russia will no longer work outside the country, Russians have been on the lookout for an alternative.

Since 2015, all domestic card payments in Russia have been processed by Mir, so the exit of Visa and Mastercard only affects those who wish to pay for Western products and services, such as Netflix, Spotify, Amazon, etc., who can no longer do business with Russian banks.

This is why, for the time being, Russia’s National Payment Card System (NSPK) has recommended that Russians take advantage of co-badged Mir-UnionPay cards, given UnionPay’s extensive acceptance abroad.

However, there are drawbacks for Russian consumers going with UnionPay, such as high issuance costs and high maintenance fees.

According to, a Russian price comparison site, Gazprombank’s plastic UnionPay card is the most expensive of all, charging customers 15,000 roubles ($250) per card.

Clearly, international acceptance is a benefit Russian banks think they can charge for, and there is a market there for the taking.

Alexey Voylukov, vice president of the Association of Banks of Russia, told Izvestia that UnionPay could take a 5 to 8 percent share of the Russian card market if Visa and Mastercard do not return.

So far this year, UnionPay said it has issued more than 85,000 cards in Russia, including co-badged Mir-UnionPay cards, according to Izvestia.

Post Bank has issued about 10,000 UnionPay cards per month in 2022, and said that more than 90 percent of the total spend on these cards took place abroad, typically on e-money apps and buying flight tickets, clothes and business services.

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