PayPal, Visa, and Mastercard have suspended all financial operations in Russia over the country’s unprecedented attack on Ukraine. The US payment companies announced on Saturday that they are halting all businesses in Russia effective immediately, and they felt compelled to act in line with their values on human societies.
“Effective immediately, Visa will work with its clients and partners within Russia to cease all Visa transactions over the coming days,” Visa said in a press release. “Once complete, all transactions initiated with Visa cards issued in Russia will no longer work outside the country and any Visa cards issued by financial institutions outside of Russia will no longer work within the Russian Federation.”
The chairman and CEO of Visa, Al Kelly, said his company regrets the economic impacts of the suspension on “valued colleagues, clients, partners, merchants, and cardholders” in Russia. But “this war and the ongoing threat to peace and stability demand we respond in line with our values.” Mastercard and PayPal also expressed the same sentiments and have halted their services altogether in Russia. American Express also did the same.
Large US corporations such as BP, Shell, General Motors, and Maersk among others have also severed business operations with Russia in the last few days.
President Joe Biden expressed satisfaction with Visa’s and Mastercard’s cessation of operations in Russia as the United States imposed more stringent sanctions on the country. The White House also said the government is working with Congress to secure additional funding for security, humanitarian, and economic assistance to Ukraine.
The US has already frozen $640 billion assets belonging to the central bank of Russia and working on banning importation to the country. Russia’s rouble declined significantly in value when SWIFT also made it impossible for Russian banks to send or receive payments globally.
The chief of Ukraine’s central bank, Kyrylo Shevchenko, praised Visa and Mastercard as well as PayPal for suspending their operations in Russia, adding that this development will impose financial hardship on the country.
In 2015, Russia established SPFS – its own banking messaging system which would make it rely less on SWIFT – and card processing system MIR, in case the country faced financial attacks in through western economic sanctions in the future. Last year, Mastercard said businesses done with Russia accounted for 4% of its total revenues, while that of Ukraine accounted for 2% of net revenues. Visa said that of Russia was 4% for 2021.