Russian banks disconnected from Mastercard, Visa payments networks
News Report
Following “sanction orders” relating to Russia’s ongoing military campaign in Ukraine, international card providers Mastercard and Visa have disconnected a number of Russian banks from their payment networks.
In a statement released on Tuesday, Mastercard CEO Michael Mibach said the company had blocked several financial institutions from using the Mastercard payment networks.
In the next few days, we will continue to engage with regulators to fully comply with our obligations, “said Mastercard CEO.
The company did not say which Russian financial institutions would suffer, but Washington revealed a list of Russian banks that would face sanctions. VTB, Otkritie, Sovcombank, Promsvyazbank, and Novikombank are among them. Apple Pay and Google Pay for these banks’ cards ceased working.
Sberbank was likewise subjected to restrictions, but they did not include the freezing of its assets; instead, only its correspondent accounts will be blocked.
Sectoral sanctions were imposed on Gazprombank, RSHB, Alfa-Bank, and Credit Bank of Moscow, with just a few exceptions.
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Visa, the international payment system, also declared on Tuesday that it would take “prompt measures” to implement Ukraine-related sanctions, though it did not specify what those measures might be.
Clients unable to use visa, MasterCard payments overseas
According to the sanction orders, clients of sanctioned banks would be unable to pay with their Visa and Mastercard cards overseas or on foreign websites.
The cards will, however, continue to work in Russia because payments are processed through the country’s internal National Payment Card System (NSPK), which was established in 2014.
The card firms’ announcements come a day after the director of Ukraine’s National Bank, Kirill Shevchenko, urged Visa and Mastercard to block Russian banks from their payment systems.
At the request of the two separate Donbass republics, which Russia recognized on February 24, Russia initiated a military campaign in Ukraine last week.
The republics’ presidents urged Moscow to intervene to protect their people from what they perceive to be pro-Kiev nationalists who have terrorized the region since 2014.
Many Western countries, on the other hand, consider Russia’s actions to be “unprovoked” aggression and have imposed further restrictions on its economy. Over the last three days, the limits have been gradually tightening, with additional penalties being implemented every day.
