Russia’s long and uneasy separation from Western finance entered another phase this week as officials from the country’s central bank openly backed the removal of Visa and Mastercard from the domestic payments market. What once looked like a temporary workaround following sanctions imposed after the invasion of Ukraine is now turning into a more deliberate effort to cut reliance on foreign financial networks altogether.
Speaking at a press conference in Moscow, Alla Bakina, who heads the Bank of Russia’s payment system department, said the country no longer sees a reason for the two American card companies to remain inside the Russian market. Her comments were blunt. Visa and Mastercard cards, she argued, no longer provide the services they once did, while Russia’s own payment system still carries the burden of maintaining them.
The remarks reflected more than frustration with Western sanctions. They also revealed how Russia’s financial system has changed since 2022, when Visa and Mastercard suspended operations in the country after Moscow launched its full-scale invasion of Ukraine. At the time, the move appeared dramatic because the two companies controlled most card payments inside Russia. Yet four years later, their influence has shrunk sharply as Russian authorities push consumers and banks toward domestic alternatives.
According to figures shared by the central bank, Visa and Mastercard now account for less than 17 per cent of the Russian card market. Before the war in Ukraine, the picture looked very different. Foreign payment systems dominated Russian banking, while the domestic Mir card system was still growing into a national alternative. Today, Russian officials describe Mir not as a backup system but as the foundation of the country’s payments network.
The change has happened partly through sanctions pressure and partly through state planning. After Visa and Mastercard suspended foreign operations in Russia, cards already issued by Russian banks continued functioning for domestic purchases because transaction processing had already been transferred to Russia’s National Payment Card System, known as NSPK. That move protected internal banking activity from immediate collapse and allowed millions of Russians to keep using their cards inside the country.
Still, the arrangement left Russia in an awkward middle ground. Consumers could continue making payments at home, but the international functionality tied to Visa and Mastercard largely disappeared. Russian travellers faced growing difficulty using bank cards abroad, while foreign online services became harder to access. From the Kremlin’s point of view, maintaining support for foreign-branded cards without receiving full service from those companies increasingly looked unnecessary.
Russia pushes harder toward domestic payment control
Bakina’s remarks suggested that the Russian authorities now want to complete the separation rather than simply manage it. She said the National Payment Card System continues paying the cost of maintaining Visa and Mastercard support even though those systems no longer provide their previous services. Russian officials are now using pricing changes and tariff adjustments to encourage banks and consumers to abandon the cards entirely.
One part of that effort involves tax policy. Since January this year, payment processing services have become subject to value-added tax under Russian law. The National Payment Card System adjusted its fees after the change, lowering costs for services linked to Mir cards while keeping other fees in place. Russian officials describe these measures as economic incentives rather than direct bans, though the practical effect may still push banks toward phasing out foreign-branded cards.
The language matters because Russia has spent the past several years trying to build financial independence without openly describing every step as isolation. Officials often frame the process as economic adaptation rather than retreat. Yet the direction is increasingly clear. Moscow wants payment systems, online services, internet infrastructure and banking activity to rely less on Western companies and more on domestic networks controlled inside Russia.
This policy stretches far beyond card payments. Since the start of the war, Russian authorities have tightened control over technology, telecommunications and financial data. Foreign social media companies have faced restrictions or outright bans. Domestic replacements have received state backing. Internet filtering has become more common. The financial system has followed the same pattern.
There are practical reasons for that approach. Western sanctions exposed how dependent Russia once was on outside financial services. Restrictions on banking access, international transfers and payment processing created immediate pressure on businesses and consumers. By building local systems, Moscow hopes to reduce exposure to future sanctions or political disputes.
Yet this effort also comes with trade-offs. Domestic payment systems work well inside Russia, but international use remains limited. Mir cards are accepted in only a small number of countries, many of which face political pressure themselves over ties with Moscow. Russian consumers travelling abroad still face difficulties accessing money or paying for services in many parts of Europe and North America.
There are also questions about competition and consumer choice. Visa and Mastercard once competed heavily for Russian customers through banks, cashback programmes and payment partnerships. With those firms pushed aside, Russian consumers have fewer alternatives available. State-backed systems may offer stability, though they also place more financial activity under domestic political control.
Cash usage and distrust reveal deeper financial anxieties
At the same time, another trend has started appearing inside Russia’s economy. While officials continue promoting cashless payments, reports suggest many Russians are returning to cash for at least part of their daily spending. Analysts link this partly to recurring mobile internet outages and partly to wider concerns about banking reliability during periods of political and economic uncertainty.
Bakina insisted this week that Russia’s payment market remains stable and resilient. She said the share of cashless payments continues to stay high despite sanctions and outside pressure. Official figures do show Russians still rely heavily on electronic banking for ordinary purchases. Mobile payments, card transactions and online transfers remain common in major cities.
Yet confidence in financial systems can change quietly over time. Repeated disruptions to internet access in some regions have reminded consumers how dependent electronic payments are on functioning communications networks. Cybersecurity fears and sanctions pressure have also added uncertainty around cross-border transactions and banking access.
Some Russians now appear to treat cash as a form of insurance rather than a primary payment method. Economists who study sanctions economies often point out that people living under prolonged uncertainty tend to spread financial risk across different forms of payment. That does not necessarily mean electronic banking collapses, but it can weaken trust in the idea that banking systems will always function normally.
The shrinking role of Visa and Mastercard also carries symbolic weight because the two brands once represented Russia’s post-Soviet financial opening to the outside world. For years, foreign payment cards signalled integration with international commerce and consumer culture. Their gradual disappearance now reflects how much Russia’s economy has separated from Western systems since the war began.
The process remains incomplete. Millions of Visa and Mastercard cards are still active inside Russia, even if their share of the market has fallen sharply. Russian banks continue supporting them for domestic transactions because consumers still hold them. Removing those cards entirely will take time, particularly for older customers reluctant to switch systems.
Still, the direction from Moscow is becoming more explicit. Russian officials are no longer speaking about temporary wartime arrangements or emergency adjustments. They are discussing a financial structure built to function with fewer Western connections for the long term.
