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ReadersSpeak

China UnionPay filling void
left by Visa, Mastercard

ews recently broke that
Russia's biggest banks,
Sberbank and Alfa
N Bank, are in the pro-
cess of switching to China's UnionPay's card system
after Visa and Mastercard suspended operations in
Russia as part of worldwide efforts to isolate Moscow
from Western financial structures due to its invasion of
Ukraine. We wish to thank Ola Oyetayo, CEO and co-
founder of Verto, www.vertofx.com, a cross-border pay-
ments infrastructure built for fast-growing startups and
enterprises, for sending us the following commentary
in response to this news:

"International sanctions against Russia are effective
because they are essentially preventing transactions,
domestic and international, from taking place in
Russia," Oyetayo wrote. "This is placing immense
pressure on the Russian economy, which is why we
expect UnionPay to become very popular among the
Russian people.

"UnionPay is an established card payments network,
despite mainly being used by cardholders in China.
It is the largest card payments network in the world
in volume and second-largest, behind Visa, in the
number of transactions. In terms of capabilities, it's
almost identical—UnionPay cards are also contactless,
supported by mobile payments like Apple and Samsung
Pay. Acceptance is also growing as more partnerships
between UnionPay and other payment networks are
being signed.

"It's important to note that Chinese-issued cards limit
cash withdrawals due to China's capital controls,
but this shouldn't matter for cards issued by Russian
institutions.

"Another alternative to Visa, Mastercard and SWIFT
is, of course, cryptocurrencies, and it's expected that
Russians might have already started using crypto to
work around the bans. Given the decentralized nature
of cryptocurrencies, they would be quite difficult
to sanction, but the private companies who are the
middlemen (exchanges, for example) can place limits on
Russian users."
Sanctions and global business

Sanctions are intended to cause disruption and pain
to bring about a desired result—in this case Russia's
withdrawal from Ukraine. The pain is felt deeply by
ordinary people and businesses. Have the sanctions
caused disruption to your business in our interconnected
world? If so, how are you handling the issues that arise?
Let us know at greeensheet@greensheet.com.

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