LONDON (AP) — Leading Russian banks are looking into using a Chinese payment rival after Visa and Mastercard suspended operations, while all the big global accounting firms said they would pull out of Russia in the latest corporate fallout over the invasion of Ukraine.
Ernst & Young and Deloitte cut ties Monday with their operations in Russia, both saying they would work to support thousands of colleagues who will be affected. Ernst & Young cited what it called the “shocking and abhorrent war in Ukraine,” and Deloitte also said it would exit Moscow-allied Belarus.
KPMG and PricewaterhouseCoopers, the other so-called Big Four accounting firms, announced their exits from Russia a day earlier.
A host of foreign companies have suspended financial services in Russia — as well as major brands from Apple to Shell and Ikea — as part of a larger move by the West to isolate Russia and cut it off from the global financial system. American Express, Visa and Mastercard pulled their services this weekend.
Russian banks have been scrambling to come up with new solutions to cross-border payments.
Sberbank and Tinkoff Bank said Sunday that they are considering the possibility of payment cards powered by China’s UnionPay system. Sberbank, Russia’s largest bank, said it would announce the launch date later.
Tinkoff, Sberbank, and Tinkoff informed customers that Visa and Mastercard will still be available for Russian transactions but will cease to work for international payments after Wednesday.
Russian central bank warned that any cards with the Visa/Mastercard system will not work on purchases made abroad and for international transactions.
China is a crucial link as Western corporations leave Russia. Beijing reaffirmed its ties Monday, with the foreign minister describing Russia as China’s “most important strategic partner.”
China did not criticize Ukraine’s invasion, but it tried to distance herself by calling for dialogue as well as respect for its national sovereignty.
The Chinese payment processor UnionPay benefits from its position as a payment monopoly bolstered by the large Chinese population and the world’s second-largest economy, helping it to grow into a serious rival to Visa and Mastercard.
UnionPay cards will be accepted by physical stores across 180 countries and territories as well online shops within 200 countries.