Visa and Mastercard Cards Being Phased Out in Russia
Russia’s National Payment Card System (NSPK) has announced it will forcibly remove Visa and Mastercard cards from circulation by reducing and eventually eliminating interchange fees. Starting in early 2027, the interchange rate will be slashed to a critical 1%, with plans to drop it to zero by the beginning of 2028. These measures are designed to replace international payment systems with the domestic 'Mir' network.
Visa and Mastercard officially exited the Russian market in March 2022. As of January 1, 2025, the chips on cards from these international systems have largely lost their global security certifications. In fall 2025, NSPK head Dmitry Dubynin demanded restrictions on card usage due to risks of malfunctions, vulnerabilities, and fraud.
Capital Flight and Economic Fallout
In just one month, Russians withdrew over $19.7 billion from bank cards and deposits, while only $5.8 billion flowed back into the banking system. This resulted in a record net capital outflow of $13.9 billion. Amid this massive cash withdrawal by the public, American Citibank—once among Russia’s top 20 banks by assets—has fully wound down its operations in the country.
The situation remains dire, as noted by Ukrainian President Volodymyr Zelenskyy:
“The country is experiencing significant capital flight, driven not only by the shift to a domestic payment system but also by the overall economic climate.” - Volodymyr Zelenskyy
The phase-out of Visa and Mastercard cards in Russia highlights serious economic challenges facing the nation. Reducing interchange fees and transitioning to the 'Mir' payment system could limit people’s access to international financial services, which in turn may impact businesses and the broader economic environment. Continued capital flight and the closure of foreign banks risk deepening Russia’s economic crisis, creating new hurdles for financial stability. As such, this situation demands close attention from economists and policymakers, as it could have far-reaching consequences for the country’s financial system.
The ongoing transition to the domestic 'Mir' payment system not only highlights the challenges faced by Russian consumers but also reflects broader economic issues. As the country's economy grapples with a staggering contraction of 40% and a budget deficit exceeding $80 billion, the implications of these financial shifts become even more significant. For a deeper understanding of how these factors interplay, read more about the dramatic decline of Russia's economy amid the crisis.