Credit card companies Visa, Mastercard and PayPal on Saturday announced they would suspend operations in Russia, hence dealing a new blow to the country’s financial system after its invasion of Ukraine.
The decision followed a request by Ukraine’s president Volodymyr Zelensky earlier on Saturday and threatens to further isolate a Russian economy facing crippling financial sanctions and a string of corporate boycotts.
The San Francisco based company, Visa said in a statement that it will immediately begin working with clients and partners in Russia to stop all transactions over the coming days. Once the process is completed, transactions by Visa cards issued in Russia will no longer work outside the country, and cards issued elsewhere in the world will not work within Russia.
The credit card companies blocked multiple financial institutions in Russia from using their networks last week following the imposition of sanctions.
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But Saturday’s move to block all transactions will worsen the nation’s financial isolation.
The sanctions announced last week had already caused Russians in Moscow and other cities to rush to withdraw cash from the nation’s banks on concerns that payment card services offered by Visa and Mastercard would stop working. Long queues have formed at ATMs waiting for fresh deliveries of cash and some western experts have warned about the liquidity of Russia’s banking system.
Earlier on Saturday, Zelensky called for the suspension of all commercial transactions, including by Visa and Mastercard, during a video call with US lawmakers.
In a twitter post following the call, Senator Lindsey Graham said: “Anything that could hurt the Russian economy will help the Ukrainian people and may make this war more difficult for Putin.”
Mastercard, which has operated in Russia for more than 25 years, said that following its suspension of operations, cards issued by Russian banks will no longer be supported by its network, and any card issued outside of the country will not work at Russian merchants or ATMs.
“We don’t take this decision lightly,” the company said in a statement, adding that it reflected “the unprecedented nature of the current conflict and the uncertain economic environment”.
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The company said it will restore operations “when it is appropriate, and if it is permissible under the law”.
Amid concerns the companies could face retaliatory action from Russian hackers following their action, Mastercard said it would remain vigilant to ensure the safety and security of the global payments ecosystem and its network.
Also, PayPal in the early hours of Saturday announced that it would shut down all its services in Russia.
“Under the current circumstances, we are suspending PayPal services in Russia.
“PayPal supports the Ukrainian people and stands with the international community in condemning Russia’s violent military aggression in Ukraine,” the company indicated in it’s statement.
