Mykhailo Fedorov, Russia’s Deputy Prime Minister, shared a letter from PayPal CEO Dan Schulman on Twitter, confirming the company’s plan to close its Russian business.
“Under the current circumstances, we are suspending PayPal services in Russia, “Schulman said in the letter. “We are also doing all that we can to support our staff in the region during this deeply difficult time.”
PayPal published a statement at the start of the week stating that it would no longer accept new Russian users. Some users’ accounts have already been disabled, as have the accounts of several of Russia’s top banks. This refers to those who are listed on the United States and other countries’ sanctions lists.
According to CTV News, two credit card companies, Visa and Mastercard, will also cease operations in Russia.
Visa and Mastercard, for example, have opted to exclude a number of Russian financial firms from their networks. This is in keeping with the sanctions implemented by the US administration in response to Moscow’s invasion of Ukraine.
In addition to swift sanctions to ensure compliance with applicable sanctions, Visa and Mastercard will each donate $2 million to humanitarian help.
Visa and Mastercard
“We will continue to work with regulators in the days ahead to abide fully by our compliance obligations as they evolve,” Mastercard said in a separate statement.
Of course, these three companies – Visa, Mastercard, and PayPal – will bear the brunt of the damage. For example, business conducted inside, into, and out of Russia accounted for nearly 4% of Mastercard’s net revenue in 2021. In contrast, the comparable measure for Ukraine was 2%.
Visa had to suspend access to its network for businesses identified as Specially Designated Nationals as a result of US government sanctions. A number of Russian financial firms can be included on the list. Among them are the Russian central bank and the country’s second-largest lender, VTB VTBR.MM.
Users can still use Mastercard and Visa cards issued by Russian domestic banks in Russia within the validity period, according to the Central Bank of Russia’s website. Cross-border payments and international online purchasing, on the other hand, are not possible.
As a reminder, the United States, the United Kingdom, Europe, and Canada all imposed additional sanctions on Russia yesterday. Blocking select lenders’ access to the SWIFT international payment system is part of the new batch.