Payment Firms Bow Out Of Russia Amidst Calls For Financial Isolation

Under public pressure to cease operations in Russia, several major firms have announced to shut down their services. The latest to join the list is the payment processor Mastercard. According to the press release, the payment giant has decided to discontinue transactions in the nation citing the “unprecedented nature of the current conflict and the uncertain economic environment.

Besides blocking some Russian financial institutions, the firm said it will end support for any cards issued by its banks and block transactions from cards issued outside the country but used “at its merchants or ATMs.”

Both Visa and PayPal have also taken steps to suspend operations in the country, the companies announced on Saturday, referring to the country’s ongoing invasion of Ukraine. Visa according to a press statement said it has begun working to discontinue transactions in the country, but it will take a few days.

In the press release, Visa Inc. Chairman and CEO Al Kelly said that the company “was compelled to act following Russia’s unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed.” Similarly, representatives for PayPal reportedly told Reuters the shutdown would still “ensure that account balances are dispersed in line with applicable laws.”

In response to that, Russia’s central bank said in a statement that Visa and Mastercard cards would continue to work within its territory even after the credit card processors announced their withdrawals.

Can crypto be Russia’s passage out?

Russia faces an impending financial collapse as the tougher penalties tighten the noose on its economy. On 2nd March, Kremlin spokesperson Dmitry Peskov acknowledged that the country’s growing isolation has put a strain on its already frail financial system.

With Russia largely blocked from the U.S. dollar-based global financial system, there was a general assumption that crypto might offer an escape route. But with several nations such as Singapore, Japan, and most recently Switzerland announcing to freeze crypto assets and on top of that Ruble plummeting down, things don’t look good as of now.

However, attempts to legalize and regulate cryptocurrencies in Russia are going on as an expert council supporting the crypto regulatory, is scheduled to review new legislation, this weekend.