Visa, Mastercard blocks services to Russian banks after sanctions

The US payment card firms Visa Inc (VN) and Mastercard Inc have blocked several Russian financial institutions from their network, in accordance with government sanctions imposed over Russia’s invasion of Ukraine.

On Monday, Visa said it has watched the “tragic scenes in Ukraine with deep sadness and disbelief” and is taking swift action to ensure compliance with applicable sanctions. It also announced to donate $2 million for humanitarian aid. Mastercard also announced to contribute $2 million.

Also Read | Adidas severs partnership with Russian Football Union over Ukraine invasion

Mastercard said it has blocked multiple financial institutions from its payment network in response to sanctions. “We will continue to work with regulators in the days ahead to abide fully by our compliance obligations as they evolve,” it said in a statement released Monday evening.

As per the government sanctions, Visa has to suspend access to its network for entities listed as Specially Designated Nationals, according to a report by Reuters. The United States has listed various Russian financial firms including the country’s central bank and the second-largest lender VTB (VTBR.MM).

Also Read | China doesn’t acknowledge Russian invasion but mourns lives lost in Ukraine

Russia’s invasion of Ukraine triggered a slew of sanctions from governments around the world targeting the Russian government, businesses, financial institutions and high profile individuals and oligarchs.

On Saturday, the US, Britain, Europe and Canada announced more sanctions on Russia including blocking certain lenders’ access to the SWIFT international payment system. The sanctions have largely crippled the Russian economy, plunging the ruble to a record low.

Also Read | Death of Indian student in Ukraine shines light on nation’s tough MBBS exam

Many Western banks, airlines and other institutions have cut ties with Russia, calling the country’s actions unacceptable. European nations and Canada have shut their airspace to Russian aircraft.

Russians rushed to ATMs and waited in long queues to withdraw cash on Sunday and Monday amid concerns that bank cards may stop functioning. Reportedly, many intended to convert their savings into more stable currencies like the Euro or US dollar to safeguard their savings as fears over the currency increased.