Mir card payment system looks beyond Russia to take on rivals

After Western sanctions gutted Russia’s financial system five years ago, a new bank card began appearing in many people’s wallets.

Now the country is hoping to introduce its cards, known as Mir (“peace”) cards, to foreign markets where Russian nationals live and travel, says Vladimir Komlev, the head of Russia’s National Card Payment System (NSPK).

“In the next three years we want Mir cards to be operational in countries where Russians travel,” he said. “It’s the hardest task in terms of returns on investment.”

Russia created its own card payment system in 2014 because it feared US and EU sanctions against Russian banks and businesses over the annexation of Crimea could block transactions made with USbased Mastercard and Visa.

NSPK said Turkey’s Isbank had started accepting Mir cards as of Thursday. Russians made 5.7 million trips to Turkey last year, according to state statistics agency Rosstat.

Komlev said Mir cards could be used with banks in 12 foreign countries by the end of the year.

NSPK is not subject to Western sanctions, but some foreign companies are wary of doing business with Russian firms in case more are put in place.

Over 56 million Mir cards have been issued, making up 20 percent of Russia’s bank card market.

NSPK, created by the Russian central bank, received a boost following legislation passed obliging civil servants to receive their salaries on Mir cards. It aims for its share of the market to reach 30 percent over the next few years. Starting next year, pension payments, as well as child and unemployment benefits, will only be paid on the cards.

These measures have made Mir a rival to Mastercard and Visa in Russia. But its shortcomings — its incompatibility with many international shopping platforms and its limited use outside Russia — have prompted calls for more support to help take on US competitors.

“At this time, it’s difficult for Mir to compete with Visa and Mastercard,” Valentina Matviyenko, the speaker of the upper house of the Russian parliament, said. “We need to develop its functionality, its social orientation.”

Mastercard, which operates a co-branded card with Mir, said it “supported the development of the payment industry and fair competition.”

Mir has developed its own “Mir Pay” smartphone app and is available on Samsung Pay, but Komlev said NSPK had no agreement with Apple to make Mir cards available on its mobile payment platform.

Komlev said another of NSPK’s priorities was to get major international online booking services for airline tickets and accommodation to accept Mir cards.

“Business and geopolitics have mixed here, so it’s not as easy to implement as we would like,” he said.