Mir card payment system looks beyond Russia
By Tatiana Voronova and Gabrielle Tétrault-Farber
MOSCOW, April 19 (Reuters) - After Western sanctions gutted
Russia's financial system five years ago, a new bank card began
appearing in the wallets of many Russians.
Now the country is hoping to introduce its cards, known as
Mir cards, to foreign markets where Russian nationals live and
travel, Vladimir Komlev, the head of Russia's National Card
Payment System (NSPK), told Reuters in an interview.
"In the next three years we want Mir cards to be operational
in countries where Russians are used to travelling," Komlev
said. "It's the hardest task in terms of returns on investment."
Russia created its own card payment system in 2014 because
it feared U.S. and European sanctions against some Russian banks
and businesspeople over the annexation of Crimea could block
transactions made with U.S.-based Mastercard and Visa
NSPK said Turkey's Isbank had started accepting Mir cards as
of Thursday. Russians made 5.7 million trips to Turkey last
year, according to state statistics agency Rosstat.
Komlev projected Mir cards would be operational at some
banks in 12 foreign countries by the end of the year. He would
not, however, disclose which countries those might be.
NSPK is not subject to Western sanctions, but some foreign
companies are wary of doing business with Russian firms in case
further restrictions are put in place.
EXPANDING AT HOME
More than 56 million Mir cards have been issued and they
currently make up more than 20 percent of Russia's bank card
market, Komlev said.
Mir means "World" or "Peace" in Russian.
NSPK, which was created by the central bank, has received a
boost from legislation obliging civil servants to receive their
salaries on Mir cards. It aims for Mir cards' share of the
market to reach 30 percent over the next couple of years.
Starting next year, pension payments, as well as child and
unemployment benefits, will only be paid on the cards.
These measures have made Mir a rival to Mastercard and Visa
in Russia. But its shortcomings - its incompatibility with many
international shopping platforms and its limited use outside
Russia - have prompted Russian officials to call for more
support to help it to take on U.S. competitors.
"At this time, it's difficult for Mir to compete with Visa
and Mastercard," Valentina Matviyenko, the speaker of the upper
house of the Russian parliament, said this month. "We need to
develop its functionality, its social orientation."
Mastercard, which operates a co-branded card with Mir, said
it "supported the development of the payment industry and fair
competition." Visa did not reply to a request for comment.
Mir has develop its own "Mir Pay" smartphone application and
is available on Samsung Pay. Komlev said NSPK had not reached an
agreement with Apple to make Mir cards available on its mobile
Komlev said another of NSPK's priorities was to get major
international online booking services for airline tickets and
accommodation to accept Mir cards.
"Business and geopolitics have mixed here, so it's not as
easy to implement as we would like," he said.
(Reporting by Tatiana Voronova and Gabrielle Tétrault-Farber;
Additional reporting by Andrey Ostroukh; Editing by Mark Potter)
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