Risk of US secondary sanctions forces banks in Kyrgyzstan and Kazakhstan to suspend financial ties and stop honoring Mir transfers
The use of the Mir payment card, which operates through a Russian payments system, will no longer be possible in Kyrgyzstan and in most Kazakh banks, as the former Soviet republics face the risk of Ukraine-related sanctions.
The Russian Mir payment card will stop working in Kyrgyzstan from Friday, April 5, the country’s local payments operator announced on Tuesday, saying that the nation’s payment infrastructure is exposed to the risk of secondary sanctions. Regulators in Kazakhstan haven’t issued any statement so far.
Last month, the Union of Armenian Banks said that that country’s lenders would stop honoring Mir cards from March 30, attributing its decision to the same reason. Belarus and Tajikistan may also stop accepting Mir cards, according to an unnamed source cited by Kommersant.
Russia’s National Card Payment System (NSPK), which operates Mir, previously said that it had received a warning from Elkart, the Kyrgyz national payment system, that Mir would stop working in the Central Asian nation later this week.
According to the Interbank Processing Centre (IPC), users of Mir cards will no longer be able to make non-cash payments at point-of-sale terminals, to withdraw cash from ATMs, to transfer from card to card, or to make internet payments.
The Mir payment card system, which soared in popularity after Ukraine-related sanctions, has made it almost impossible for Russia to make cross-border transactions using Western money and payment systems such as SWIFT. In February, the US Treasury updated its backlist of Russian individuals and entities, adding the operator of Russia’s Mir payment card system to it.
The first deputy chairman of the Bank of Russia, Olga Skorobogatova, said that the regulator was working on solving the problem with foreign banks’ refusal to accept the Mir card. The Central Bank is studying the possibilities of expanding the ATM networks of Russian banks’ subsidiaries and using the Faster Payments System (SBP) in other countries.
