Visa and Mastercard have suspended a number of Russian institutions from their payment networks following Western sanctions. Announcing this week, the companies pledged to work with regulators to enforce any future restrictions amid a weakening ruble and run on Russian banks.
Mastercard said it has blocked “multiple financial institutions” from its payment system in response to sanctions.
In a similar statement, Visa said it has keenly followed the “tragic scenes in Ukraine with deep sadness and disbelief” and therefore initiating “prompt action” to ensure the company complies with sanctions against Russia.
The firms did not state which institutions are affected by the sanctions, however, the list reportedly features a slew of Russian financial institutions. They include Russia’s central bank, the country’s second-largest lender VTB, and entities designated as “Specially Designated Nationals,” according to Reuters, citing a source familiar with the matter.
The two firms have each pledged to donate $2 million to Ukraine relief aid, and that they would continue to cooperate with regulators in implementing any further sanctions.
Sanctions against Russia
Governments around the world triggered an array of sanctions emanating from Russia’s invasion of Ukraine. The sanctions target the Russian government, financial institutions, businesses, and high-profile individuals and oligarchs.
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Sanctions from Western nations include excluding select Russian banks from SWIFT, an international financial communication system.
The crisis
The actions are extensively edging Russia from the international financial system, crippling its economy. Evidence of the crisis can be observed through the drop in the ruble to a record low. Additionally, banks have experienced long queues at serving points and ATMs, as people try to withdraw cash to avoid limitations in case measures are activated.
As fears over the currency mount, it was reported that many Russians intend to convert their savings to more stable currencies like the euro or U.S. D to protect their savings.
Customers using Visa- or Mastercard-enabled bank cards with Apple Pay and Google Pay are currently experiencing more hurdles in other sectors like public transportation. For instance, those in cities like Moscow which use contactless payments to travel have to seek alternative means.
