Visa, Mastercard, and PayPal suspend Russian operations in response to Ukraine invasion
The credit giants join a growing list of financial organizations opposing the country’s recent actions
Bottom line: Visa and Mastercard issued separate statements on Saturday announcing their intent to suspend all Russian operations. The coordinated effort by the two largest credit networks in the world is another attempt to ratchet up the pressure on the already ailing Russian economy. The announcements came on the same day a letter from PayPal was released to Ukraine’s Deputy Prime Minister. The letter clearly stated their support for the embattled country and their intent to take similar steps by suspending Russian services.
Visa and MasterCard issued statements that echoed similar sentiments, citing Russia’s unprovoked invasion of Ukraine and the unprecedented nature of the current conflict. The decision follows recent sanctions that limited or removed Russian banks from the SWIFT messaging system, essentially cutting off most Russian banks from communicating with the rest of the world via the network.
Visa and Mastercard’s actions mean that any cards issued in the country will no longer work outside of Russia within a few days. Furthermore, cards issued outside of Russia will no longer be accepted at Russian businesses or ATMs.
The credit networks were not the only ones who took major steps to suppress the Russian economy. Paypal sent a letter to Ukrainian Deputy Prime Minister Mykhailo Federov on Saturday highlighting its support, which includes an improved donation platform as well as the company’s original intent to suspend all PayPal services in Russia until further notice. The decision also prevents Russian funds from being transferred through Paypal’s Xoom service, which allows funds to be transferred domestically or between users in dozens of international locations.
Sberbank Rossii PAO, Russia’s largest state-owned lender, informed users that they would still be able to withdraw and transfer cash and pay as usual in Russia’s online and storefront businesses. Russian transactions, according to the bank, do not use foreign payment systems, but instead, go through the country’s National Payment Card System.
As Russia’s financial troubles worsen, Bitcoin and other cryptocurrencies have started to gain momentum. There has been increased pressure on exchanges like Coinbase and Binance to block access from Russian customers, but the companies have yet to act. Even if exchanges block access, the decentralization of cryptocurrencies makes alienating users nearly impossible, making it an appealing option.
