Turkish President Recep Tayyip Erdogan is reportedly working to establish a new payment system between Turkey and Russia. The initiative comes amid U.S. pressure against the use of Russian meal cards in Turkey. Some Turkish banks have partnered with the card to facilitate payments by Russian tourists visiting the country.
President Erdogan directs Turkish government to develop alternatives to Mir, report
Turkish President Recep Tayyip Erdogan has instructed his ministers to develop a payment system with Russia that will replace the Russian banking system Mir; according to A Haber TV channel, Turkish and Russian officials are already in talks on the matter.
The move follows statements from Washington that the U.S. will try to persuade Turkey to limit its support for Mir. Cut off from the world’s major credit cards and travel destinations by Western sanctions, the company’s card is one of the few options left for Russians vacationing in Turkey. Many have visited Turkey this year.
A Harbor, quoted by the Russian economic newspaper Kommersant, revealed that the relevant Turkish and Russian government departments are currently in negotiations and that President Erdogan himself plans to participate in discussions on the topic.
In mid-September, the Washington administration indicated that it might impose sanctions on countries that do business with Mir. Two of the five Turkish financial institutions that had partnered with the Russian payment system, Isbank and Denizbank, have stopped doing business with the system. State-owned Halkbank, Vakifbank, and Zirat are still using the system.
The U.S. Treasury Department then expressed its readiness to persuade the Turkish government of the need to reduce the use of Mir. Last week, U.S. officials expanded sanctions imposed in response to Russia’s invasion of Ukraine to include the chief executive of the National Card Payment System (NSPK), the Russian central bank that operates Mir.
NSPK processes Russia’s domestic transactions. Moscow establishedMirafter several Russian banks were denied service by Visa and Mastercard following the annexation of Crimea in 2014. Russia also developed the System for Transfer of Financial Messages (SPFS), an alternative toSWIFT, which disconnected some Russian banks.
In the current crisis, Russia is also turning to cryptocurrencies. Earlier this month, the Ministry of Finance and the Bank of Russia agreed that under the current circumstances, Russia needs to legalize crypto payments for cross-border transactions to ease sanctions pressure on the economy and foreign trade.
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