Payment processing is likely to become significantly more difficult, as Paypal, Mastercard, and Visa have said that they will cease Russian operations in response to Russia’s attack on Ukraine.
The three payment giants have now joined a growing list of global entities that have refused to do business with Russia as a result of its actions.
The steps, which came in response to a request made Saturday by Ukrainian President Volodymyr Zelenskyy, delivers another blow by major card companies to Russia’s financial sector and are expected to further isolate the sanctions-hit economy.
Card Companies Without LoveFrom
Visa Inc. Chairman and Chief Executive Chairman Al Kelly stated in a news release that the company felt driven to act in response to Russia’s “unjustified invasion of Ukraine and the intolerable events we have witnessed.”
“We have chosen to suspend our network services in Russia,” Mastercard said in a statement, adding that the decision follows the company’s previous action to disconnect various financial institutions from the Mastercard payment network, as mandated by global regulators.
Paypal President and CEO Dan Schulman said in a statement that the company is stopping operations in Russia in light of its “violent military intervention in Ukraine.”
A Blow To Russian Operations
A critical component of the West’s response to the invasion has been the imposition of economic pressure on Moscow through its isolation from the international banking system.
Late last month, the US and its allies agreed to de-list certain Russian banks from the SWIFT secure messaging network, a system used by financial institutions around the globe to send and receive money transfer requests.
Mastercard said that it will no longer support cards issued by Russian banks and that any card issued outside the country would be inoperable in Russian stores and ATMs.
According to a Paypal representative, the company would continue to facilitate withdrawals “for a period of time” to ensure that account balances are distributed in accordance with applicable laws and regulations.
Blocking Russian Accounts
Despite demands from Ukrainian officials and lawmakers elsewhere, cryptocurrency companies have resisted calls to arbitrarily restrict all Russian residents.
Jesse Powell, CEO of crypto exchange Kraken, stated that the company would comply with such a request if legally required.
Ukraine has requested that Binance, Bybit, Coinbase, Huobi, KuCoin, Gate.io, Whitebit, and Ukraine-headquartered Kuna to restrict all Russian cryptocurrency accounts.
Extra Funding
US President Joe Biden commended the decision of the card companies to suspend Russian operations during a phone chat with Zelenskyy.
According to a White House official, Biden stated that his administration is pressing Ukraine to get security, humanitarian, and economic aid and is collaborating with Congress to obtain extra financial support.
Mastercard and Visa had already disclosed their compliance with US and international sanctions imposed on Russia in the aftermath of the February 24 invasion.
Meanwhile, Bitcoin was trading at $38,531.72 Sunday, down 1.8% in the last 24 hours.