NPCK reveals what will happen if Visa and Mastercard leave Kazakhstan

The NPCK doesn’t plan to develop any payment systems on its own / Collage by Kursiv.media, photo editor: Arthur Aleskerov

According to Assel Marchenko, deputy head of the National Payment Corporation of Kazakhstan (NPCK), the agency isn’t going to develop any payment system similar to the Russian Mir.

«We have no plans related to the creation of any alternatives to Mir. We haven’t even thought about this,» Marchenko said in an interview with Kursiv.

In order to reduce the risk of secondary sanctions, the National Bank of Kazakhstan and the NPCK use the switching of card transactions. This project has been implemented to mitigate the risks for cardholders in Kazakhstan in conjunction with Mastercard, Visa and Union Pay. It was launched after international payment systems left Russia.

«All banking cards issued in Kazakhstan and which are used in Kazakhstan go through us. We are those who route them to Mastercard, Visa or Union Pay. This means that we will be able to keep these cards fully operational within the territory of Kazakhstan even if all international payment systems leave our market. This is why we aren’t going to issue any sort of national card. We have solved the problem by other means,» Marchenko said.

Even though this method can ensure that the exodus of the international payment systems wouldn’t affect the existing banking cards, it won’t help with the issuing of new cards. The deputy head of the NPCK hasn’t revealed what they are going to do if this happens.

The Visa and Mastercard international payment systems left Russia soon after the full-scale Russian invasion of Ukraine in March 2022. For these companies leaving the Russian market was an important move aimed at saving their image rather than a forced decision because of Western sanctions. Currently, only Russian Mir and Chinese Union Pay cards are available in Russia.

In late February 2024, the U.S. Office of Foreign Assets Control imposed blocking sanctions against the National Card Payment System, the operator of the Russian Mir payment system. The U.S. government believes that the spread of this system has helped Russia to evade sanctions.

In Kazakhstan, only Russian VTB Bank is servicing cards issued by Mir. It is also the only Russian bank in Kazakhstan in which neither it’s shareholders nor it’s core business have changed since 2022. Given that both the U.S. and the EU have sanctioned the bank, it is currently focused on trading transactions between Kazakhstan and Russia.