Following the news that Russia could be banned from the international messaging system SWIFT;

Chris Dinga, Payments Analyst at GlobalData, a leading data and analytics company, offers his view:

“Banning Russia from SWIFT would negatively impact the Russian economy as it would be difficult for Russia to complete any international transactions. Though banning Russia will not completely stop it from making cross borders transactions with its international partners, it will make the process more expensive, less secure and more difficult, which should slow the growth of its economy.

“Cutting out Russia from the international financial system would force Russia to find alternative payment solutions to continue trading. The last country to be banned from SWIFT was Iran in 2012 due to its missiles and nuclear program. To circumvent the ban, it directly connected its banking system to Russia. Russia could do a following method and connect its banking system to China. Both Russia and China created their own payment systems that could operate independently from SWIFT. By linking up their payment systems they will continue to trade and could expand it to any other nations still interested to operate with Russia despite international sanctions.

“While banning Russia from SWIFT may cause difficulty to the Russian economy in the short term, it could be the trigger that sees the emergence of an alternative payment system. Countries that depend on Russian exports, and who have debts exposure to Russia, may not be ready to suspend their trades with the country.”