Some cards issued in the country will not be accepted abroad and on foreign sites
International card companies Mastercard and Visa disconnected a number of Russian banks from their payment systems following “penalty ordersrelated to the ongoing Russian military operation in Ukraine.
“Following the sanctions orders, we blocked several financial institutions from the Mastercard payment network. We will continue to work with regulators in the coming days to fully comply with our obligations.Mastercard CEO Michael Mibach said in a statement Tuesday.
The card company did not specify which institutions will be closed, but Washington last week announced a list of Russian banks that fall under the sanction orders. These include VTB, Otkritie, Sovcombank, Promsvyazbank and Novikombank. Their holdings and dollar accounts were blocked, and Apple Pay and Google Pay for cards from these banks stopped working.
Restrictions were also imposed on Sberbank, but they failed to freeze its assets – instead, only the bank’s correspondent accounts will be closed.
Gazprombank, RSHB, Alfa-Bank and Credit Bank of Moscow were subject to sectoral sanctions, with only a few restrictions.
According to RBC, Mastercard notified banks that fell under blocking sanctions that they were suspending their participation in the system on February 26.
The international payment system Visa also announced on Tuesday that it would take “quick measurementsto enforce Ukraine-related sanctions, however, he has yet to elaborate on specifics.
According to the sanction orders, customers of the sanctioned banks will not be able to pay with their Visa and Mastercard cards abroad and at foreign sites. However, the cards will continue to work in Russia, since payments within the country are processed through the internal National Payment Card System (NSPK), established in 2014.
Tuesday’s announcements from the card companies come a day after National Bank of Ukraine head Kirill Shevchenko called on Visa and Mastercard to stop serving Russian banks from their payment systems.
Russia launched a military operation in Ukraine last week at the request of the two breakaway Donbas republics, which Russia recognized on February 24. The republics’ leaders have urged Moscow to step in and defend their people against what they see as pro-Kiev nationalists who have terrorized the region since 2014. However, many Western states see Russia’s actions as “no provoked” and introduced new sanctions against the Russian economy. Restrictions have been gradually extended in recent days, with new penalties being introduced every day.
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