Pay-ins and Payouts for the international businesses working with Russia: crisis FAQ from Bank 131

Updated: 02/03/2022 at 16.20

Bank 131 was created to operate in the global digital economy. We have served and still serve as a bridge between businesses and people wherever they are. At this crisis time both businesses and people need help. Bank 131 opens bank accounts for Russian and foreign businesses in rubles, dollars and euros. Accepts payments through cards issued by the Russian banks, including the local MIR cards, and makes payouts to cards and accounts of Russian banks.

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Question: I am a company, a non-resident of Russia, I need to make payouts to clients in Russia or collect payments in Russian rubles. Previously I used to accept and send dollars and euros from my account in a foreign bank to Russia through an international payment provider. What should I do now?

Answer: The international corridors to transferring money to/from Russia still work. You can still transfer money to the local cards and bank accounts to support your business. Even to VTB, Sberbank and other sanctioned banks. The corridors work through the banks that are not on the sanctions list. An international wire transfer often looks like moving money through a chain of correspondent banks that you may not even know about. If one of the sanctioned banks was among the correspondent banks, the corridor may temporarily get stuck. In that case:

Option 1: You need to contact it’s bank. Typically, each bank has multiple correspondent banks and routes for the transaction. By now they have already rearranged the routing so that the money does not go through sanctioned banks. You need to ask them specifically for a new route for your transfers.

Option 2: You need to switch to another bank that still has a working chain of correspondent banks to Russia. Bank 131 continues to service the settlements of foreign companies in Russia, constantly updating the set of correspondent banks.

Option 3: You can open a bank account in the Russian bank directly. In rubles, dollars or euros. This will allow you to seamlessly receive and send payments within the market in rubles and currencies, as well as transfer money abroad. Bank 131 can help with this. 

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Question: How have the current sanctions affected Russia's banking system? 

Answer: Some Russian banks, including the important systemic bank VTB, have been put on sanctions lists. Not all of the Russian banks. As a result, the sanctioned banks lost the ability to accept money transfers into Russia from abroad and to send currency from Russia abroad. Also, all their customers automatically lost this opportunity: other banks, local and foreign companies and individuals. This affected only sanctioned banks and had no effect on ruble and currency transfers within Russia for their clients. 

Russia has adopted reciprocal mirror sanctions against a number of countries that have adopted sanctions against it. Residents and non-residents of the Russian Federation now have restrictions on transferring money abroad. In the form of payments for goods and services, loans or transfers of own funds to accounts in foreign banks and electronic wallets. Or via money transfer systems.

The essence of bilateral sanctions is that on the one hand the entry of money into Russia (through specific banks) is restricted, and on the other hand the withdrawal of money from Russia (without regard to which banks) to certain countries. Within the country itself, there is free movement of funds in any currency between banks, companies, and people.

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Question: Do Visa, MasterCard, Apple Pay, Google Pay work in Russia and what will happen to them if they are banned?

Answer: Visa, MasterCard. At the moment, interruptions in their work concern only the service of those banks that are under sanctions and only partially. Visa, MasterCard continue to work uninterruptedly within Russia with all banks, without exception. 

The work of Visa and MasterCard in Russia is reserved through a specialized agency NSPC. Even a complete Russia’s disconnection from Visa and MasterCard will not affect the payments within the country. Therefore, Russian representative offices of foreign companies will continue to accept cards of these payment systems uninterruptedly in Russia. Payouts to Visa, MasterCard cards will be available through the Russian payment partner.

Apple Pay and Google Pay. Apple Pay has stopped supporting Russia. Google Pay continues to work within Russia with all banks, except those under sanctions. The current interruptions of Google Pay in Russia are temporary and related to bank card acquiring contracts through sanctioned banks.

There are MIR cards in Russia, which already have a significant share of payments and will, no doubt, increase the share during this time of crisis. All Russian banks issue MIR cards to Russian residents. Bank 131 can offer MIR card acquiring and payouts to MIR cards to ensure the uninterrupted payment flow with your Russian customers.

Additionally, Russia is one of the few countries that has the fast payments system (SBP). It allows for an instant money transfer between local bank accounts. Such transfers do not involve intermediaries in the form of payment systems (Visa, MasterCard, MIR). Most Russians using online and mobile banks are already connected to it. If you open an account with Bank 131, this system will also be available.

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Question: What happened after the disconnection from SWIFT?

Answer: Some of the banks that were previously on the sanctions list with a block on correspondent accounts were disconnected from SWIFT. All other Russian banks are still connected to SWIFT.

SWIFT is an international system for the transmission of messages between banks. Disconnecting sanctioned banks from this system will in no way change their already existing situation. Disconnecting all Russian banks from this system will slow down the speed of international bank transfers involving Russian banks. But it will not stop them.

Russia has developed an analogue of SWIFT, the SPFS system, to which any foreign bank, foreign company or foreign financial institution can freely connect. Also, a foreign company can open an account in a Russian bank and use local bank transfers to settle with their Russian customers. Local bank transfers can work without SWIFT. Bank 131 can help with this.