After Russia invaded Ukraine, the largest payment systems Visa and Mastercard left the market of the aggressor country, dealing a severe blow to the economy. As a result, the Russian financial sector was severely damaged, and many Russians’ credit cards became worthless plastic, forcing many Russians to rush to the ATMs before the final days of VISA and Mastercard ceased operations.
However, the banking system did not collapse, in part thanks to the Belgian corporation OpenWay. Its Way4 platform — a digital banking solution for managing all types of payment services — continued operating in Russia after the occupation of Crimea and still continues today, despite Russia’s full-blown invasion of Ukraine.
Apart from selling the St. Petersburg OpenWay Service LLC to its Russian workers Gitelson and Taratynova, the company did nothing after Russia’s full-blown invasion on 24 February 2022.
Collaboration since the occupation of Crimea
Russia has been a partner of OpenWay for many years. After the occupation of Crimea in 2014, the first bank — RNKB — entered the peninsula. Wholly owned by the Russian Federation, it, of course, is under sanctions. In order to avoid the risk of dealing directly with the bank, OpenWay established an “intermediary” — LLC “OV Integratsiya.”
In 2017, it was entrusted with the conclusion of 12 contracts with the RNKB. Both LLC “OV Integratsiya” and LLC “Openway Service” (whose owner is a Maltese company that is part of the OpenWay Group) are united by the joint general director Anton Korytov and joint minority shareholders Anna Taratinova and Grigoriy Gitelson. Both companies are located at the same address.
Loophole: Mir payment system
Following the 2014 occupation of Crimea, when Visa and Mastercard stopped servicing cards issued by Russian banks operating on Crimean territory, a new system for processing bank card payments, the National System of Payment Cards, was established in Russia.
The National System of Payment Cards (NSPC) is based on the Mir payment system, a Russian concoction established by OpeWay, which was tasked by the Russian Federation to produce something akin to Visa and Mastercard.
OpenWay was the primary arhitect of Mir, upon which the entire payment system of the Russian Federation is built.
This new architecture was created to evade any constraints Western powers could try to impose on the financial system in the future.
Since 2015, the majority of domestic transactions in Russia are processed by Mir, while Visa and Mastercard handle international transactions.
Critics say that Russia will invest in alternative schemes in reaction to economic constraints, speeding up the adoption of Mir’s cards by Russian banks, which are currently accepted in Vietnam, Armenia, Belarus, Kazakhstan, and Kyrgyzstan and will soon be accepted in Russia.
Moreover, in the beginning of August 2022, Erdogan said that five Turkish banks will begin adopting the Mir banking system. Erdogan cited the move as a “relief for both Russian tourists and Türkiye,” demonstrating this scheme’s steadfastness and importance to the Russian banking system, even after sanctions from the West.
Putting money over morales
Evidence of OpenWay’s support for Russia and its preference to put money over morales could be seen when in 2016 by Sergey Bochkarev, NSPK JSC’s Deputy General Director said,
“A decision was made to create a fundamentally new architecture. The OpenWay company was able to provide a single architectural approach that worked for us, and so it became a partner of NSPC.”
The OpenWay software solution now serves as the foundation for the Russian Federation’s entire payment system. If the company left the market of the aggressor state after the start of Russia’s armed aggression against Ukraine, the payment system of the Russian Federation would have been paralyzed, but this did not happen.
According to the Wall Street Journal, the departure of Visa and Mastercard means that Russians can’t use their cards outside of the country in many cases, and Mir cards are only accepted in a few nations, the bulk of which are former Soviet states. However, the domestic-payments system continued to work undisturbed, even if those cards carry Visa or Mastercard logos.
Many large Russian banks, including sanctioned ones, continue to use the Way4 platform from OpenWay. This product is used by Sberbank of Russia, Alfa Bank, VTB Bank, VEB Bank and RNKB. Until recently, OpenWay boasted of cooperation with “Sberbank of Russia” in all its cases.
The whole Russian financial system is built on OpenWay’s Way4 software package. The corporation realizes this, yet continues to operate in the market of the aggressor state.
Particularly, it is thanks to this system that the Russian occupiers, killing the Ukrainian Army and civilians, receive their paychecks on time.
Evidence that the central office is aware of its product being used by Russian banks
There have been no major bank collapses in the Russian Federation because these institutions continue to use the Way4 technology system. This means that the licenses are still valid and being updated.
The crippling effect of Western sanctions on the Russian banking system may have been mitigated in part because in 2017 Moscow passed legislation requiring banks that handle pension payments and public-sector employee wages to make those funds available via Mir cards, causing usage to rise from 2 million to 95 million between 2016 and 2020.
It is implausible that the central office doesn’t know Russian’s main banks are using its system. No Russian firms can supply the Way4 platform without OpenWay’s knowledge. This is a software product that requires updating and purchasing licenses. This is possible only with the permission and participation of OpenWay because the platform belongs to the whole group.
Furthermore, OpenWay’s Russian contractors are still looking for Way4-trained personnel, confirming the company’s desire to continue operations as well as its market success by expanding its workforce.
The addresses and contacts of the offices in Russia are now hidden on the OpenWay website, but in 2020 they were still online, as a snapshot in the Web Archive reveals.
The corporation leverages shell companies managed by local OpenWay employees to communicate with its sub-sanctioned clients. These intermediaries continue to provide OpenWay-owned software.
In 2016, OpenWay avoided international sanctions by selling OpenWay software to Russia’s RNKB through such shell companies.
For this, OpenWay Group, the parent business, deleted its own senior executives from the list of shareholders and renamed the Russian “OpenWay Service” to the abovementioned “OV Service.”
However, none of this implies that OpenWay has halted operations in the Russian Federation
It would be naive to believe that OpenWay’s senior executives in Brussels are unaware that the Russian banks are continuing to operate with no disruption to operations; moreover, given the Russian surnames and backgrounds of management in the head office (previously studying and living in Russia), it appears unlikely they have no inside contact with the officials in the Russian office.
OpenWay isn’t the only company serving Russia
OpenWay isn’t the only company breaking sanctions and assisting Russia’s war machine in funding its deadly projects in Ukraine and other occupied nations across the world.
It uses the systems of the American software company Oracle in its solutions, making it also a collaborator in the Russian banking system, as it facilitates the databases used by sanctioned institutions.
Officially, the OpenWay Group has operations in Belgium and Cyprus. According to the media, the OpenWay Group also includes the Maltese company OpenWay Holdings Limited, which previously operated the official OpenWay representative office in Russia.
This article was prepared based on research of the Economic Security Council of Ukraine. ESCU is an institution created to develop expertise in identifying and countering internal and external threats to the economic security of Ukraine.
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