Holidaymakers arriving from Russia will not face difficulties in making payments in Turkey, as the Russian payment system continues to grow in the country, the treasury and finance minister said.
Russian banks have been isolated from the global financial system after payment firms suspended their operations over Moscow’s invasion of Ukraine.
"There are Mir and Troy," said Nureddin Nebati, referring to Russian and Turkish card payment systems, respectively, that are among the few options left for Russians to make payments abroad.
"They can’t use Troy abroad, but the Mir card is very widely used and gaining popularity," the minister told reporters before a Cabinet meeting in the capital Ankara on Monday.
"The rate of businesses accepting Mir cards was around 15%, and the banks are distributing more right now. There will not be any problem," Nebati was quoted by local media as saying when asked how Russian tourists can vacation in Turkey amid Western sanctions and blocks on Moscow over its military campaign in Ukraine.
U.S. payments firms Visa and Mastercard have suspended their operations and said they would work with clients and partners to cease all transactions there.
Russians' inability to use Visa and Mastercard abroad has spurred demand for the home-grown Mir system, which works in Turkey, Armenia, Vietnam and some other countries. Mir means "world" or "peace" in Russian.
Three Turkish banks accept the Mir payment system, namely private lender Işbank and public banks VakıfBank and Ziraat Bank, all of which are reported to have seen their revenues from transactions via Mir increase exponentially after Visa and MasterCard's pullout.
About 40% of the global card purchase transaction volume was through Visa in 2020, with China's UnionPay ranking second at 32%, followed by MasterCard at 24%, showed data from researcher Nilson. UnionPay ranked first by the number of cards in circulation worldwide at the end of 2021 with 9.4 billion, while Visa had 3.7 billion and Mastercard 2.5 billion.
Moscow’s invasion of Ukraine is expected to impact the crucial tourism industry, just as the travel sector was looking to rebound from the pandemic.
Nebati said he believed Turkey will exceed its target of 45 million tourists and $35 billion in tourism income as hotel occupancy rates are over 90% as of May.
Turkey is one of the few countries still operating direct flights with Russia.
Russians and Ukrainians are the country’s first and third biggest sources of visitors, respectively. Russians accounted for 19% of foreign visitors in 2021, with 4.7 million people, while Ukraine was the third-largest at 8.3% with 2.1 million people.
They accounted for some 27.3% of the total 24.7 million visitors that arrived throughout 2021, up from some 15 million in 2020. The share jumped from 24.5% in 2020 and 19% in 2019.
Officials had hoped that with pandemic restrictions easing, tourism could replicate or exceed the numbers from 2019 when some 52 million visitors – including about 7 million Russians and 1.6 million Ukrainians – brought $34 billion in revenue.