Will UnionPay gain traction due to sanctions?

On Saturday, Visa and Mastercard announced that they had suspended network operations in Russia, which prevents cards issued in Russia from working abroad, and disables cards within Russia that were issued outside the country. Amex and PayPal have enacted similar measures.

Why should we care?
Two dimensions of payment network suspensions have been highlighted most often: (1) As a significant blow to everyday people, including those who do not support Russia’s invasion of Ukraine as well as Russian citizens abroad; (2) As a symbolic message delivered to the Kremlin. Mastercard said it doesn’t “take this decision lightly,” while Visa labeled the move a response “in line with our values.” But this development may also encourage a sector-wide shift toward Chinese payments networks like UnionPay. According to Reuters, major Russian banks like Sberbank and Tinkoff are rushing to issue UnionPay-branded cards, which would permit payment functions abroad. With more than 120 million accounts between them, these major Russian players can upend payments “spheres of influence” as they currently exist; UnionPay has mainly operated in China and entered network agreements with other countries in Asia. If sanctions against Russia ever do lift, then Visa, Mastercard, Amex, and PayPal may return to a financial landscape no longer interested in doing business with them.