Desperate for Bank Card Microchips, Russia Looks to China
Russia is facing a shortage of microchips used in its domestic bank cards, but it looks as though China may come to the rescue.
Western sanctions against Russia mean access to Visa, Mastercard, and American Express, SWIFT, and global financial systems have all been cut off. In response, the local Mir payment system took up the slack, but a huge surge in demand for millions of new cards has resulted in a shortage of the microchips they rely on to work.
As Reuters reports, European supplies are no longer viable, and the problem is being exacerbated by Asian manufacturers suspending production due to the pandemic, so Russia is instead looking to China for new suppliers.
According to Oleg Tishakov, a board member of Russia's National Card Payment System (NSPK), two microchip suppliers have already been found in China. A certification process is underway, and if successful, it would ease pressure on Mir and continue to allow Russians to switch to the domestic payment system.
Links with China already seem to be strengthening as some major Russian banks are co-branding their cards with China's card services provider UnionPay. That's good news for the Chinese economy, but could limit the effectiveness of Western sanctions in Russia.
As the South China Morning Post reports, China refuses to condemn Russia over the war in Ukraine; analysts believe there will be minimal impact on its trade across Asia for doing so. China is instead attempting to remain neutral, which could become increasingly hard to maintain if more Chinese companies help Russia get around sanctions by signing new supply deals.
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