The most accessible credit card networks globally have joined the sanction placed upon Russia by ceasing services. Credit cards issued by the network will still work for transactions and withdrawals in the country but not for any transactions outside of Russia.
From Visa's announcement:
“We are compelled to act following Russia's unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed,”.
“We regret the impact this will have on our valued colleagues, and on the clients, partners, merchants and cardholders we serve in Russia. This war and the ongoing threat to peace and stability demand we respond in line with our values.” Visa – Click here to read the full press release by Visa
The latest ceasing of key services by countries and companies puts significant pressure on Russian businesses and individuals. Many of which depend upon paying for and getting paid for foreign online services through credit cards. It will also affect online business in Russia selling to foreigners. This, together with the near-total block of air & shipping freight, has brought the Russian economic and digital economy to a standstill.
“With this action, cards issued by Russian banks will no longer be supported by the Mastercard network. And, any Mastercard issued outside of the country will not work at Russian merchants or ATMs.
We don't take this decision lightly. Mastercard has operated in Russia for more than 25 years. We have nearly 200 colleagues there who make this company so critical to many stakeholders. As we take these steps, we will continue to focus on their safety and well-being, including continuing to provide pay and benefits. When it is appropriate, and if it is permissible under the law, we will use their passion and creativity to work to restore operations.” Mastercard – Click here for the full press release
Visa makes up 33% of transactions and Mastercard 39% in Russia, respectively, with the latter deriving 4% of its revenue from the now isolated state.
The latest announcement by the world's leading credit card processors follows similar actions by a vast network of companies last week. It is further isolating Russia economically from the rest of the world.
Paypal Cross-border Payments Stopped in Russia
Paypal earlier announced that it would also stop all services. This will devastate small businesses and entrepreneurs who rely on the US-based company to receive payment for services online. It is now almost impossible to send payments to Russia-based companies or residents.
Paypal was up to now only available in Russia for cross-border payments. Customer withdrawals will be processed for a short period, but the registration of new users is already blocked.
Everyday citizens are now increasingly experiencing the difficulty brought on by the sanctions. The ability to get foreign currency is becoming almost impossible, and with their local currency tanking over 40% so far, it leaves few options available.
Putin has threatened that he sees these actions as an act of war. The West hopes that the economic pressure applied will help stop the war on Ukraine and put an end to this senseless violence.