Publication date: 25 Mar 2022
Attention! The latest news! In May 2023, 3SNET decided to check how the situation with online payments and money transfers had changed. What payment systems work in Russia?
The data was updated on 14 April 2022!
Current blacklists have begun to appear in various chats of webmasters: lists of betting shops and affiliate programs which have blocked affiliate accounts without payouts. It should be recalled that in the current situation many companies have announced their withdrawal from the Russian market. Some have left altogether, while others have already managed to return under a new name.
On 13 April, information emerged that foreign online shops were refusing to accept payments by UnionPay cards issued in Russia. This is due to the fact that many companies do not want to look into whether a particular bank has come under sanctions and have “simply decided not to serve Russians”.
The Sberbank mobile app has been removed from Google Play and the App Store. Already installed apps work as usual. However, the bank advised to use the web version of Sberbank Online and not to update the app.
PayPal became available for residents of Ukraine. It is possible to attach a card of any bank to the service. Special conditions were introduced for Ukrainians: the possibility of P2P-payments between friends and family, as well as PayPal waived its own commission.
As of 7 April, the US imposed blocking sanctions against Sberbank and Alfa Bank. It is possible that bank apps will soon become unavailable on the App Store and GooglePlay.
A domestic app shop for Android devices, NashStore, is set to be launched in Russia in the summer of 2022. This was announced by the Chairman of the Government of the Russian Federation, Mikhail Mishustin.
Russia and India have completed development of an analogue of SWIFT international money transfer system for settlements between the countries. The Russian State Development Bank VEB and the Reserve Bank of India (RBI) were involved in the elaboration. The new system will enable Russia and India to ” smoothly transfer import or export documents for transactions in rupees and roubles”.
On 1 April, Russia will launch a replacement for Apple Pay and Google Pay – the SBPay app based on the Bank of Russia’s Faster Payments System. Instead of cards, customers’ bank accounts will be linked to SBPay.
Among the banks set to launch the service are Moscow Credit Bank, Post Bank, Rosbank, St Petersburg Bank, MTS Bank, Dom.RF Bank, Absolut Bank and Promsvyazbank, Russian Standard Bank and Expobank.
A new currency might appear in Russia. Experts of the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASTF) and the Institute of Economic Forecasting of the Russian Academy of Sciences proposed creating a new payment currency in Russia for trading with friendly countries. The EEU countries, China, India, Iran, Turkey and others may be interested in the non-dollar system.
How do payments via bank with plastic cards work?
In March 2022, the European Union and the United States announced that some Russian banks have been disconnected from the SWIFT interbank payment system. Almost simultaneously, Mastercard and Visa payment systems announced that they had banned several banks from Russia: VTB, Otkritie, Sovcombank (now Sinara Bank), Promsvyazbank and Novikombank.
- What is the SWIFT system? It is a system that controls the exchange of data between banks. For example, if a user wants to withdraw money from a terminal of another bank, SWIFT requests account information and, after confirmation, instantly releases funds. If one of the banks is disconnected from the system, such a money transfer becomes impossible. Since 2014, Russia has had its own SWIFT counterpart, System for Transfer of Financial Messages (SPFS). More than 330 financial institutions are currently connected to it, including those from Turkey and some CIS countries. In addition to SWIFT, there is also SEPA, the Single Euro Payments Zone. Previously, Russian banks did not work with this system, but now anything is possible.
The Japanese payment system JCB is also suspending operations in Russia. The cards already issued in Russia will not be available abroad from 14 March.
How to pay with cards in Russia now?
- It is possible to use plastic cards within Russia and transfer funds.
- It is not possible to use Apple Pay, Google Pay or Samsung Pay.
- Russians will still have the Mir payment system, which operates in Russia, the CIS countries like Vietnam, Cyprus and Turkey.
There are offers from tour operators: trips to Uzbekistan for issuing Visa and MasterCard. You can fly to Tashkent (from 2 nights), apply for a local bank card and come back. These bank cards are accepted at any bank and allow free cashless payment abroad for goods and services.
The decision by Visa and Mastercard to restrict work with Russian customers has prompted demand for cards from China’s UnionPay payment system. UnionPay is now the only way for Russian plastic cardholders to access the rest of the world, and is accepted in about 180 countries. Plans to issue cards of this system have been announced by Sberbank, Alfa and Tinkoff, VTB, Home Credit, Expobank and MKB. Post Bank has issued a virtual UnionPay card (available in the app), with a plastic version coming later.
On 15 March, Gazprombank raised the price for issuing bank cards of the UnionPay international payment system. Now, issuing or re-issuing Union Pay cards on physical media, including additional cards, costs 15,000 roubles (instead of 5,000 roubles).
Gazprombank has launched its own payment service, GazpromPay. But it is not a contactless payment system (not analogous to Apple Pay or Google Pay). GazpromPay allows payments to be made in online shops. To connect it, simply link your card to any bank on the payment page.
The Samsung Pay service will continue to operate in Russia, but phone payments from Mastercard and Visa cards may not be available. Payments by Mir cards work without restrictions.
Which payment systems are blocked in Russia?
On 24 March, Apple banned the addition of cards from the national payment system Mir to its Apple Pay payment service. Recall that Apple on 15 March 2022 allowed adding bank cards with the Mir payment system as a possible way to pay for the ecosystem’s services. But some users have been unable to link their cards to their Apple ID. The company explained that the problems were due to banks’ fault, adding that it had not imposed any bans on the use of Mir cards.
The Western Union payment system has stopped conducting money transfers in Russia since 24 March. A remittance sender in Russia who has decided to receive a refund, can do so at Russian Post offices.
The transfer service for individuals from their Sberbank accounts to the wallets of Chinese Alipay has been closed. It ceased operations due to the termination of Western Union in Russia.
- Italian bank UniCredit is considering leaving Russia. The company is now conducting an “urgent” review of its business in the country.
- Swedish bank Skandinaviska Enskilda Banken is ceasing operations in Russia.
- Deutsche Bank announced the closure of its business in Russia.
- French banking group BNP Paribas suspends operations in Russia.
Sberbank banned transfers in US dollars and sterling on 18 March.
The electronic payment system PayPal has been blocking electronic wallets of Russian users since March 18. It is necessary to withdraw funds from the accounts before that date!
TransferWise / Wise from 11 March 2022 closes the possibility for Russian citizens to deposit funds in EUR; from 7 May 2022 all accounts will be blocked.
Paxum payment system has disabled external card withdrawals to Russia since 10 March. There is no possibility for Russian residents to withdraw their money inside Russia. Paxum’s Russian clients can continue to use Paxum P2P transfer system to send and receive payments to other Paxum account holders worldwide as usual.
As of 9 March 2021, Skrill and Neteller prohibited deposits and withdrawals for Russian citizens. Also, ecoPayz accounts are not available to Russian residents at this time.
The payment company PayPal Holdings Inc (PayPal payment system) decided to stop operating in Russia. Since March 2, registration of new users from Russia has been stopped and a “certain period of time” has been given for withdrawals.
For several days Piastrix wallet could not be deposited by card or qiwi wallet, registration of new customers from Russia was prohibited. On 10 March, cards were returned, and deposits from cards and qiwi wallets were made.
The use of cryptocurrency is also hampered. Crypto exchanges CEX IO, BTC-Alpha, KUNA, Upbit, Coinlist, Qmall and Binance have more or less restricted service to users from Russia and Belarus. At the same time, according to experts, Russians have dramatically increased their investments in cryptocurrency. According to ENCRY Foundation, the growth of transactions grew by 3 to 5 times and the first demand is for Stablecoin (pegged to the dollar exchange rate), in particular Tether (USDT).
On 14 March, Japanese authorities also obliged local crypto exchanges not to process transactions from Russia. More than 30 crypto exchanges have done so. Conducting unauthorised payments can be punished with prison (up to 3 years) or a fine of 1 million yen ($8,500).
Lithuanian company Paysera has stopped transfers to and from Russia: transactions in roubles are no longer serviced, accounts of Russian clients will be closed and transfers to and from Russian banks will be restricted.
- Previously, at the beginning of February 2022, WebMoney Wallet lost its bank and stopped servicing Russian wallets. The license of JSC Conservative Commercial Bank was revoked at the request of the Central Bank and was linked to “an increased risk of involvement” in cooperation with illegal gambling and illicit players in the financial market. After customer accounts were unfrozen, the rouble funds were converted into dollars and transferred to WMZ wallets.
Share it with your friends via favorite social media