Financial sanctions including throwing some Russians banks off SWIFT, and Visa and MasterCards, may not be as effective as the media in the West would like to claim, opined by financial futurist,Chris Skinner, in his recent blog post. There are alternatives, including cryptocurrencies and China’s UnionPay system.
Over the last seven years, Russian banks have built a very effective internal payments network called Mir. Cards from Russian banks now cover all of the adult population – 100 million users – and allows card payments domestically. So, the action of Visa and MasterCard only affects Russians who travel overseas which, in current climate, is most likely to be wealthy Russians who have foreign bank accounts anyway. Therefore, imho, this announcement will have minimal impact.
A second point was that Russian banks were thrown off SWIFT. Well, they haven’t been. It’s actually just the large domestic Russian banks but not those that deal with the EU for oil and gas.
Sberbank, Russia’s largest lender, and Gazprombank were not included because they are the main channels for payments for Russian oil and gas, which EU countries are still buying despite the conflict in Ukraine.
Even then, does Russia need Visa and MasterCard? Today, they announced an alliance with China UnionPay.
Read more about it here.
Chris Skinner is best known as an independent commentator on the financial markets through his blog the Finanser. Here he regularly discusses key issues and opportunities in banking and financial services, summarising research, white papers and other analysis that is topical for the day. He is also the author of eight books covering everything from European regulations in banking through the credit crisis to the future of banking.
When he’s not travelling and delivering keynote speeches, Chris chairs the European networking forum the Financial Services Club, which he founded in 2004. The Financial Services Club is a network for financial professionals, and focuses on the future of financial services through the delivery of research, analysis, commentary and debate and has regular meetings in London, Edinburgh, Dublin and Vienna.
He is also Chief Executive of Balatro Ltd, a research company, and a co-founder of the website Shaping Tomorrow.
Chris regularly in various media including the BBC, Bloomberg and Sky News, and is a Judge on many awards programs including the Card Awards and the Asian Banker’s Retail Excellence Awards, as well as having worked = closely with leading banks such as HSBC, the Royal Bank of Scotland, Citibank and Société Générale, as well as the World Economic Forum.
Chris Skinner‘s speaking topics include:
- Branchless Banking and a Cashless Society: fact or fiction?
- Why banking will disappear but banks will not … well, not all of them
- Are Bankers Good or Bad for Society?
- Money is meaningless
- The similarities between banks and landmines