Topline
Mastercard and Visa have blocked a number of Russian institutions from their payment networks in compliance with Western sanctions, the companies announced Monday and Tuesday, as they pledged to work with regulators to enforce any future restrictions amid a plummeting ruble and run on Russian banks.
Visa and Mastercard have blocked some Russian institutions from their network.
Key Facts
Visa said it has watched the “tragic scenes in Ukraine with deep sadness and disbelief” and is taking “prompt action” to ensure the company complies with sanctions against Russia, the company announced in a statement.
In a similar statement, Mastercard said it has blocked “multiple financial institutions” from its payment network in response to sanctions.
Neither firm stated which institutions are covered by the sanctions, though the list reportedly features a slew of Russian financial institutions including the country’s second-largest lender VTB, Russia’s central bank and entities designated as “Specially Designated Nationals,” according to Reuters, citing a source familiar with the matter.
Both payment firms said they would continue to work with regulators to implement any further sanctions and each pledged to donate $2 million to Ukraine relief aid.
Key Background
Russia’s invasion of Ukraine triggered an array of sanctions from governments around the world targeting Russian government, businesses, financial institutions and high profile individuals and oligarchs. Sanctions from Western nations include excising select Russian banks from SWIFT, the international financial-messaging system. The measures have largely unplugged Russia from the international financial system and have crippled its economy, plunging the ruble to a record low and prompting queues outside banks and ATMs as people try to withdraw cash in case limits are put in place. Many reportedly intend to convert their savings to more stable currencies like the euro or U.S. dollar to protect their savings as fears over the currency mount.
Tangent
The customers of Russian banks hit by sanctions are reportedly no longer able to use their Visa- or Mastercard-enabled bank cards with Apple Pay and Google Pay. For some, this means they are effectively unable to use the metro in cities like Moscow which use contactless payments to travel.
Further Reading
More Russian Billionaires Speak Out Against Putin’s War On Ukraine (Forbes)
Ukraine invasion: Russians feel the pain of international sanctions (BBC)
Source: https://www.forbes.com/sites/roberthart/2022/03/01/visa-mastercard-suspend-services-to-russian-banks-hit-by-sanctions/