We’ve learned Visa, Mastercard, and PayPal halted sales in Russia over the ongoing war in Ukraine, effectively cutting off the remaining western payment services in the region.
News that PayPal halted sales in Russia came just after Mastercard and Visa also announced plans to cut off transactions in the country this weekend (via Forbes). The move has the financial sector and the cryptocurrency community reeling.
“PayPal supports the Ukrainian people and stands with the international community in condemning Russia’s violent military aggression in Ukraine,” PayPal chief executive Dan Schulman said while confirming they are are shutting down services in Russia.
“We are compelled to act following Russia’s unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed,” Visa chief executive Alfred Kelly said in a statement, adding the company will cut off transactions “over the coming days.”
“We don’t take this decision lightly,” Mastercard said in a statement. “Mastercard has operated in Russia for more than 25 years.” News that Visa, Mastercard, and PayPal halted sales in Russia came swiftly after Russia was also removed from SWIFT, the main international banking and payment network.
With all three major payment processors cutting off Russia, credit and debit cards issued by Russian banks will no longer work outside the country, and both Russian businesses and ATM machines will be unable to accept cards from outside Russia.
Nearly immediately after the ban, local media reported Russia’s Sberbank is going to start immediately issuing cards via China’s UnionPay. Russia’s own alternative to Visa and Mastercard is sitting at 30% market share, but that will likely rise as well.
In between Russia getting removed from SWIFT and the remaining payment processors cutting them off this weekend, trading between Russia’s ruble currency and cryptocurrency was exploding, according to data from crypto research company Chainalysis.
This will also likely continue to rise, according to other analysts – alongside countries further developing their own alternatives to combat potential blocks from western powers.
“Every cultural sphere that isn’t the U.S. or China will build national stacks for social media, shopping, and the like as part of its digital defense strategy,” said crypto and tech investor Balaji Srinivasan on Twitter. “But they won’t have the scale to be globally competitive on their own. They’ll need to hook into bitcoin/web3 for that.”
Unlike the traditional banking system and its associated payment processors, cryptocurrency is decentralized and encrypted, meaning regardless of who wants to cut off your access to your financial assets, they can’t.
Coming from this, various cryptocurrency exchanges like Coinbase and Binance have been pressured to cut off services to Russia, but so far have been refusing to blanket ban the nation. Similar calls to block internet access to Russia were also rejected by ICANN and Starlink.
News that Visa, Mastercard, and PayPal halted sales in Russia follow other tech and gaming companies cutting off their sales and services in the country.
Previously, Activision Blizzard halted sales in Russia over the Ukraine war, Microsoft halted all new sales and services, The Witcher and Cyberpunk 2077 developer CD Projekt RED halted their sales in Russia, while ESL has suspended Russian esports teams and tournaments in the region. Polish developer Bloober Team also stopped their sales in the region.
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