Russian citizens visiting Iran can now make contactless payments using their Mir cards and smartphones via the Mir Pay app. This is according to a statement from the Central Bank of the Islamic Republic. On May 13, a special ceremony was held in Tehran to launch the “Mir” payment system cards in Iran. Now Russian citizens have the opportunity to make purchases in tourist centres using the Russian mobile application MirPay with NFC technology on an Android smartphone.
Russia’s Mir payment system now operating in Iran
The Mir payment system is a Russian national payment system developed to provide a domestic alternative to international card networks like Visa and Mastercard. It was launched in 2015 by the National Payment Card System (NSPK), established by the Central Bank of Russia. The purpose was to ensure financial independence and security for Russian citizens and businesses, especially in response to sanctions and restrictions on international payment systems. The name “Mir” means “peace” or “world” in Russian, reflecting its ambition to be a globally accepted system. The key features are of course the card types; Debit, credit, and prepaid cards. It also supports contactless payments and mobile payment apps like Mir Pay. It is widely used in Russia for payments, ATMs, and online transactions, and accepted in select countries, including Iran, Turkey, Armenia, Belarus, and some others, often through partnerships with local payment systems. It supports EMV chip technology, contactless payments (NFC), and QR code-based transactions; and integrates with mobile apps like Mir Pay for smartphone-based payments. Regarding security, it operates under strict Russian regulations, ensuring data sovereignty because it uses domestic infrastructure to process transactions, reducing reliance on foreign networks. Well, it was created for sanctions resilience. After Western sanctions in 2014, Russia faced risks of being cut off from Visa and Mastercard. Mir ensures uninterrupted domestic and cross-border payments. Then there is financial sovereignty; it reduces dependence on foreign payment systems and promotes Russia’s financial autonomy. So, first question; what is the Mir payment system all about?
Iran proposes connecting the BRICS countries’ payment systems
Since 2014 and subsequent Western policies, nearly every BRICS country has built its own payment system, including MIR in Russia, Shetab in Iran, RuPay in India, UnionPay in China, and others. Iran recommends combining these technologies into a single infrastructure that is totally insulated from sanction concerns. The concept is innovative, and payments across BRICS countries would be smooth, especially because MIR and Shetab are already linked. However, there is a catch: MIR and Shetab are both under sanctions and have nothing to lose, whereas other partners’ payment systems may be hesitant to quit SWIFT for this endeavour. Nonetheless, a feasible option is for each BRICS member to designate only one bank that is sealed off from the West and devoted on cooperating with BRICS via national.
Trade between Iran and Russia Soars as SWIFT Circumvented
Russia and Iran developed a way to avoid the US dollar routing system known as SWIFT, Trade between the nations is booming. The Society for Worldwide Interbank Financial Telecommunications (SWIFT) system powers most international money and security transfers. SWIFT is a vast messaging network used by financial institutions to quickly, accurately, and securely send and receive information, such as money transfer instructions. Most global transitions touch SWIFT in some way. The EU wanted to develop a way around SWIFT because the EU is sick (rightfully so) of the US setting sanction policy for the whole world.
Russia’s Trade Routes to Iran
Business between the two most sanctioned countries in the world, Russia and Iran, is thriving. Iran’s exports to Russia surpassed the $2bn mark in 2023 according to Iran’s ambassador to Moscow. This is a considerable jump from the figures the previous years, and a 30% rise throughout the year, according to the Tehran Chamber of Commerce. The total value of bilateral trade between the two in volume reached $4.9bn in 2023 according to Iran’s official statistics. A Russian economic delegation with 170 representatives was in Tehran earlier this year as the two countries held the 17th round of their joint economic commission. The two sides pledged to increase trade tenfold over the coming years. What facilitates their trade is their own banking solution, which the two countries set up last year to circumvent the dollar. The two central banks managed to connect Iran’s Sepam national financial messaging service to Russia’s SPFS messaging service, its equivalent to the Swift system. In connection with this new system, Russian banks started operating offices in Tehran, and offered credit lines to ease exports from Russia to Iran. There are similar plans in Iran for exports towards Russia. Intensifying trade with Russia is part of Iran’s Look to the East strategy that aims to neutralise the effects of US sanctions by expanding into new markets. But your government leaders have been lying to you that sanctions are working even though they know the truth.
Sanctions Don’t Work Because They Create New Markets
Sanctions on Russia were meant to stop trade and coerce Vladimir Putin into a U-turn on Ukraine. Instead, Russia continues to bide its time in Ukraine, and Russian oil in particular continues to flow into world markets. The buyers may have changed and the way markets operate. What was transparent before all of a sudden turned opaque. The west did also not completely cut themselves off from Russia despite all rhetoric. Western firms and banks are still operating in Russia, even if the numbers have dwindled. Russian gas is still flowing into Europe, albeit at much-reduced volumes, and could even increase thanks to a recent deal between Bulgaria and Turkey.
Countries, political leaders, and market makers act in their best interest.
Countries, political leaders, and market makers act in their best interest. It is in the best interest of Greek shippers to sell ships so they do. It is in the best interest of India and China to buy Russian oil so they do. It is in the best interest of Dubai middlemen to make a market in ships so they do. What this boils down to is simple: It is the best interest of middlemen in Greece, Russia, India, China, and Dubai ignore Biden, so they do.
How sanctions leave the West with fewer opportunities to influence Russia
Cutting off Russia from transactions in dollars and euros did not deprive Moscow of the ability to finance military actions against Ukraine. This means the main intent of the sanctions – to deprive Russia of the resources to conduct military actions – has not been achieved. Export controls also didn’t solve the problem. They affected civilian industry, but adaptation is ongoing there too. Western companies were not expelled from Russia until February 2022. Their departure deprived them of the opportunity to “take over” the Russian market, where they previously thrived. Now, their assets have been bought up by Russian businesses, as well as companies from China and other non-Western countries. Big business (“oligarchs”) was also not particularly forced to tie themselves to Russia before the conflict. Now, they are forced to be much more connected to Russia. The ban on importing Russian resources hit the initiators themselves. Now they pay more for resources. Russia is forced to sell them at a discount, but this doesn’t make it any easier for the initiators. Russia now doesn’t import many things it doesn’t need or can buy from third countries or produce domestically. Russia has many resources which are cheap for it but not for Europe. Russia remains a large economy with a scientific and engineering tradition, albeit not as strong as one might wish. It’s hard to isolate Russia compared to Cuba or Venezuela. Additionally, despite all this, there are indeed costs from sanctions, including increased costs of international financial transactions, difficulties in replacing goods under export control, and additional expenses for replacing outgoing equipment. However, all this does not prevent Russia from continuing its political course, while the main goal of the sanctions is political, not economic. Furthermore, it stimulates Russia to get rid of dependence on the West as quickly as possible. And the more this separation progresses (with the help of the West’s own sanctions), the fewer opportunities there are to manipulate dependency.
Written By Tatenda Belle Panashe
