Chinas UnionPay system refused to cooperate with Russias biggest lender Sberbank and suspended talks with other banks for fear of secondary sanctions, the RBC news website reported Wednesday.Russian banks planned to issue cards using UnionPay after Visa and Mastercard suspended operations last month in compliance with sanctions imposed over Moscows invasion of Ukraine.
The Russian lenders, including Sberbank, are under United States , U.K.
and EU sanctions.The project [to issue UnionPay cards] is temporarily on hold, RBC quoted one of several unnamed banking sources as saying.They dont officially confirm that its tied to sanctions, saying its on pause until further instructions.UnionPay also suspended negotiations with other sanctioned banks, including Russias largest private lender Alfa Bank, VTB and Otkrytie.UnionPay accounted for 1% of Russian bank cards in 2020, according to Retail Banking Research.
Demand for UnionPay cards grew tenfold following unprecedented western sanctions over Russias war in Ukraine.Russian UnionPay holders have reported difficulties with using the system to make payments in the United States, Israel, Europe, Asia and the Middle East.Russias Central Bank reassured Visa and Mastercard holders that the systems will continue to work within Russia until the cards expire.Russia and China have proclaimed a no-limits friendship on the eve of Moscows invasion of Ukraine.However, subsequent reports have suggested Chinas reluctance to run afoul of unprecedented western sanctions.