Samsung Pay stops working with Russian cards due to US sanctions

Starting April 3, Samsung will disable cards from the Mir payment system from Samsung Pay. The reason was US sanctions against the National Payment Card System (NPC). Google, for its part, has already removed Mir Pay from its app store. Experts believe that although there are analogues of Samsung Pay in the Russian Federation, the departure of the system from the market will increase the cost of contactless payment services and reduce their quality.

From April 3 in Russia it will be unavailable to add and use cards of the Mir payment system in Samsung Pay, reported Samsung. They clarified that the ability to add and use club cards and loyalty cards in Samsung Pay “will work without changes.”

Kommersant’s interlocutor among smartphone developers explained that the decision of Samsung management is related to the imposition of US sanctions against NSPK, the Mir card operator (see. “Kommersant” from February 23)

For the same reason, the Mir Pay application disappeared from Google Pay at the same time as Samsung’s message.

After the outbreak of hostilities in Ukraine, many foreign contactless payment systems stopped working in the Russian Federation, including services from Apple and Google (see. “Kommersant” dated March 24, 2022). In addition to Apple, Samsung and Google, Chinese Huawei (Huawei Pay), Yandex, MTS and a number of Russian credit institutions, including Sberbank and Tinkoff Bank, have their own payment systems.

Meanwhile, back in mid-February, owners of UnionPay cards of Russian banks linked to Huawei Pay collided with the problem of payment in terminals of Russian stores. A Kommersant source among electronics developers explained that UnionPay refused to cooperate with NSPK after the company was included in the sanctions list.

As interlocutors in the financial market explained to Kommersant, Huawei could block all UnionPay cards of Russian banks after NSPK was included in the SDN-list using their bank identification number, which encrypts information about the payment system, country, bank and card type.

According to Tinkoff Pay product manager Nikita Buklish, the share of payments using Samsung Pay by Tinkoff Bank clients on Android among other services is 16%, and the credit institution’s own product is 21%.

“We do not expect a significant effect from the departure of Samsung Pay from the Russian market, since currently there are already domestic analogues that work on all operating systems, and de facto replacement has already occurred,” Mr. Buklish emphasized.

Yandex reported that over the past year, the Yandex Pay audience has tripled (the company representative did not specify absolute figures). “Changes in the operation of Samsung Pay will not affect Yandex Pay; cardholders will be able to continue paying offline via NFC or QR SBP in the application itself,” Yandex assured.

The number of transactions performed per day using the SberPay NFC service already exceeds 3.5 million, Sber explained: “We also opened our payment service using the Sber QR code to other banks – as a result, 13 credit institutions have now joined it ” Sber believes that after foreign services leave the Russian Federation, “we can expect further growth in domestic payment systems using QR codes.”

At the same time, Dmitry Vishnyakov, an independent expert on the payment card market, emphasizes that Samsung Pay’s departure from the Russian Federation “reduces competition, and more well-known brands in payment technologies refuse to cooperate with the Russian payment market.” Among the consequences, the expert names “a decrease in the quality of services and an increase in their costs both for banks and, ultimately, for consumers.”

Timofey Kornev, Maxim Builov