Following US and EU Sanctions, both services are unavailable in the nation.
Following Russia’s invasion of Ukraine, governments around the world imposed sanctions on the Russian government, corporations, financial institutions, and high-profile individuals and oligarchs. Sanctions imposed by Western countries include the exclusion of a number of Russian banks from SWIFT, the global financial messaging system.
The sanctions have effectively cut Russia off from the World Financial System and damaged its economy, with the currency plummeting to a new low and citizens queuing outside banks and ATMs to withdraw cash in case limitations are imposed. Many people are apparently planning to shift their savings to more stable currencies like the euro or the US dollar in order to secure their money as currency anxieties grow.
Mastercard and Visa announced Monday and Tuesday that they had blocked a number of Russian institutions from their payment networks in accordance with Western sanctions, and that they would work with regulators to enforce any future restrictions in the face of the ruble’s depreciation and a run on Russian banks.
Visa said it is “deeply saddened and dismayed” by the “tragic events in Ukraine” and is taking “immediate measures” to ensure the firm complies with Russian sanctions, according to a statement. In reaction to the sanctions, Mastercard claimed it has blacklisted “several financial institutions” from its payment network.
According to Reuters, which cited a source familiar with the situation, the list apparently includes a host of Russian financial institutions, including the country’s second-largest lender VTB, Russia’s central bank, and companies recognised as “Specially Designated Nationals.”
Both payment companies committed to donate $2 million to Ukraine rescue efforts, saying they would continue to work with regulators to impose any additional restrictions.
Customers of some of Russia’s top banks may no longer use their debit and credit cards with Apple Pay or Google Pay as a result of Western sanctions imposed on Russia’s financial institutions in reaction to the invasion of Ukraine. According to a press release from the Central Bank of Russia seen by Business Insider, the affected companies include VTB Group, Sovcombank, Novikombank, Promsvyazbank, and Otkritie FC Bank.
Customers with those banks can still make contactless payments with their cards if they support the capability. They will not work in other countries, and they will not be able to be used to make online purchases from retailers based in countries that have imposed sanctions on Russia.
Apple Pay and Google Pay aren’t as popular in Russia as native choices like YooMoney, according to The Verge. Only 29% of Russians indicated they had used Google Pay at the time, while 20% said they had used Apple Pay, according to statistics from 2020. As a result, given the availability of alternatives, those restrictions are unlikely to have a significant impact on Russian consumers. The risk of Russian banks being excluded from the SWIFT Interbanking system, on the other hand, might result in currency instability, further harming the country’s economy.