UZCARD of Uzbekistan has suspended the processing of payments via Mir cards issued by the national card payment system of the Bank of Russia due to the necessary technical procedures.
Although the general director of the Bank of Russia’s national card payment system has been targeted by US sanctions, the head of public relations at UZCARD says that the suspension of payment processing had nothing to do with it . Shortly after the sanctions took effect, Turkish banks Denizbank and Isbank suspended the use of Mir.
UZCARD officials quoted by Reuters.com said that these technical maintenance procedures involved the suspension of payment processing, as requested by the Uzbek partner bank that makes the payments.
The Russian car payment system Mir is operated by the Russian National Card Payment System, a 100% subsidiary of the Central Bank of Russia. Although Mir does not actually issue cards, it provides financial institutions with Mir-branded payment products which they then use to offer credit, debit or other programs to their customers.
In the context of recent EU and US sanctions against Russia, Mir has been promoted as an alternative to Visa and Mastercard, which shut down their Russian networks in February 2022.
Isbank and Denizbank suspended Mir
In September 2022, Turkey-based lenders Isbank and Denizbank suspended the use of Russia’s Mir payment system to banks, following US sanctions. Isbank officials revealed they had halted payments from Mir and were assessing new sanctions imposed by the US Treasury. They also mentioned that they were keen to comply with national and international laws, regulations and business principles.
As mentioned by the Washington Post, Russia has demanded that several Turkish state-owned banks allow correspondent accounts for the largest Russian banks and that Russian industrial producers be allowed to operate from free economic zones in Turkey.
In August 2022, the US Treasury sent a letter to major Turkish companies warning that they risked sanctions if they maintained business ties with sanctioned Russians.
Which countries aspire to use the Mir payment system?
In September 2022, the Central Bank of Egypt began negotiations to join the Russian Mir card payment system with the aim of improving Russian tourism in Egypt as well as trade relations between the two countries.
According to al-monitor.com, an anonymous source revealed that the Central Bank of Egypt is working with the Egyptian Ministry of Finance to allow Egyptian banks to access the Russian Mir payment card system by the end of September 2022. In addition, the Russian ruble will be included in the list of currencies used by these banks and by tourist companies and hotels in order to improve regional tourism.
In the same month, the Central Bank of Iran took the first steps to join Russia’s Mir card payment system to improve regional trade and circumvent US sanctions.
Officials from the Iranian Central Bank quoted by russia-briefing.com revealed that their collaboration with Russia would allow financial transactions between the two countries via Mir. Based on this, Iran could transfer money with other member countries through this system in the future.