July 7, 2022

MasterCard and Visa Block in Russia will not stop domestic purchases | Banking

Russia’s government-backed network says consumers can still use MasterCard and Visa stamp cards for domestic transactions, reducing the impact on US companies. Decided to pull services On the invasion of Ukraine.

Mir cardholders will say that Russia is a domestic payment system Can still access their fundsWithdrawals and domestic transfers – at least until their bank cards expire.

Mir has processed most of the domestic payments Russia Since 2015, foreign operators such as Visa and MasterCard have been conducting international transactions. In 2014, a 100% owned operator of the country’s central bank was established by government order to protect the economy against the sanctions imposed on the annexation of Moscow Crimea.

“All cards of these payment systems already issued by Russian banks will continue to operate within our country as before,” the Mirin operator said early Sunday morning.

“Until the end of their validity period, Visa and MasterCard cardholders have access to all funds in their accounts, as well as all regular payment transactions – such as making purchases, transferring funds from card to card, and withdrawing money.”

The report was released shortly after US companies announced On Saturday, they will suspend Russian operations in light of Moscow’s continued military offensive in Ukraine.

MasterCard and Decision to suspend visa Their Russian operations will primarily affect foreign payments, meaning that local consumers will no longer be able to use their Russian cards overseas or international charges online. Foreign customers will be barred from making payments to Russian companies or withdrawing money within the country.

“Payments made abroad, including overseas internet resources, are not available with Visa and MasterCard International Payment System cards issued by Russian banks,” Mir confirmed.

The move is expected to accelerate Russian banks’ acceptance of Mirin’s own cards, which have been adopted in some countries, including Turkey, Vietnam, Armenia, Belarus, Kazakhstan and Kyrgyzstan.

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Mir said demand for its cards had already increased following the imposition of sanctions on Russian banks by the US, EU and UK on Saturday. According to its own statistics, as of September 2021, more than half of Russians already had a Mir card, which accounts for 32% of all transactions.

The upswing is likely to play into the fears of critics that sanctions will prompt Russia to invest in alternative projects. Similar concerns have been raised Preventing Russia from Swift – Secure news system used by banks for cross-border payments – and the potential rise of alternatives such as Russia’s equivalent SPFS system.

PayPal stopped accepting new customers in Russia on Wednesday and expanded that range on Saturday, where it said its services – primarily, customers exchanging money with each other – were suspended. It added that it would allow the withdrawal “for a period of time, ensuring that the account balances are disbursed in accordance with applicable laws and regulations”.