Dropping Mir payment system may affect local businesses

ISTANBUL

Local tourism, retail and eatery companies are closely following the developments regarding the decision by Turkish banks to drop Russia’s Mir payment system to see if it could affect their businesses.

Private lenders İş Bankası and Denizbank already suspended transactions, and three state lenders later joined them in pulling out of the Russian payment system.

“If this only İş Bankası and Denizbank, its impact on the sector could be very limited. But the exit of the state-owned lender may have some impact,” said Ali Onaran, the board chair of Pronto Tour.

He recalled that 20 years ago, Russian visitors would make payments in cash, but credit cards have become an important medium for payment over the decades.

“This could reverse once again [following Turkish banks’ decision]. We have not experienced something like this before. We need to wait and see to assess its impacts,” Onaran said.

Sinan Öncel, the head of the United Brands’ Association (BMD), which represents retailers, noted that the share of payments through Mir in Russian tourists’ total spending is not known.

“It would not be right to draw a conclusion from today as it is a new development. We cannot say whether it would have an impact or not. Even if Mir’s share is high in total spending, this should not cause problems because Russians may use cash as was the case 20 years ago,” Öncel said.

It is a complicated matter, said Kaya Demirer, the head of Restaurant Investors and Gastronomy Businesses Association (TURYID).

“We have not yet seen the adverse effects. There will always be alternatives. We do not expect losses due to public banks’ decision to pull out [of the Mir system],” he added.

In the first eight months of 2022, more than 3 million Russian tourists visited Türkiye, up from 2.5 million a year ago.