What is the Russian MIR card and how does the Kremlin payment system work?
With Russians excluded from global banking, alternative payment systems have a new importance in the stricken economy.
Mir, meaning 'peace' or 'world' in Russian, is a payment system in the Russian Federation. Mostly, it is used for bank transfers and initially all welfare and pension payments go through the Mir system.
The Mir programme was started back in 2014 when Russia faced what were then the first wave of sanctions. At the time, Russia had occupied the Crimea from Ukraine, territory it still administers today. There were worries, like what has happened now, that Russia would be cut off from international payment systems.
According to the NPCS, in the summer of 2021, more than 50 percent of Russians had at least one Mir card. By September 2021, payments on these cards accounted for 25.2 percent of payments in the country, with a total of 112 million cards issued. According to the company itself, 2020 saw 75 percent more uses of the cards compared to 2019. It's pretty popular.
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Russia has been keen to bring other countries with them in their Mir venture. So far, eleven other nations accept the payments, although two of these are not fully internationally recognised: Abkhazia and South Ossetia. The others are: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Turkey, the United Arab Emirates, Uzbekistan, Vietnam.
It's not just Russian businesses that use the system, since 2016 American businesses have been involved with Mir payments. However, Mir has come to the forefront in the last month as the Russian war in Ukraine has boosted its profile.
Why are Mir payments so important now?
Russia has been hit by a multitude of sanctions that ranging from import bans to the closing of fast food stores. But one of the most impactful on Russians has been the blocking of access to global banking systems like Visa and Mastercard on March 10. Therefore, the country has had to turn inwards with their own systems to help people pay for things.
Ukraine has encouraged the other countries using Mir to cease using it.