Financial service corporations Mastercard and Visa have suspended their operations in Russia on Saturday, March 5, over the invasion of Ukraine. The companies said they would work with clients and partners to cease all transactions. All transactions initiated with Visa cards issued in Russia will no longer work outside of the country, and those issued outside of the country will no longer work within Russia, Reuters reported.
"We are compelled to act following Russia's unprovoked invasion of Ukraine and the unacceptable events that we have witnessed," the media quoted Al Kelly, Visa CEO, as saying. The Mastercard corporation officials reiterated that the decision was not taken lightly.
PayPal, American Express Distance Themselves
Following this, American multinational financial technology company PayPal also suspended operations in the country, the latest financial services company, to distance itself from the country because of the attack on Ukraine.
A day later, American Express Co also terminated all its operations in Russia and Belarus on Sunday, March 6. "In light of Russia's ongoing, unjustified attack on the people of Ukraine, American Express is suspending all operations in Russia," the credit card company said.
Chairman and CEO Stephen J. Squeri said that the move provided humanitarian aid to those suffering the effects of the 'terrible war'.
Lauded By Biden, Zelensky
The boycott by the western corporations has been welcomed by US President Joe Biden and Ukraine's President Volodymyr Zelensky.
"President Biden noted his administration is surging security, humanitarian, and economic assistance to Ukraine and is working closely with Congress to secure additional funding," Reuters quoted the White House officials.
Russian Banks' Response
After the suspensions, several Russian banks, including Sberbank, said they would now issue cards suing the Chinese UnionPay card operator's system, along with the indigenous Mir network.
RuPay For Russia?
The global financial services firms' suspensions have drawn attention towards India's monetary system RuPay for its services in Russia. The services have been a great alternative to international corporations and hold 60 per cent of the Indian market.
However, it is questionable if it would be able to deal with Russian-like sanctions.
According to the Times of India report, experts have said that RuPay is not insulated to the same level as China yet. The country is no stranger to sanctions or denial of services, as it had faced one during the 1998 nuclear tests.
"In the payment world, India has built substantial capability since the launch of the RuPay debit card under the NPCI, which processes far more transactions compared to Visa/Mastercard," a regulatory source told TOI.
But when it comes to credit cards, the Indian market is dominated by the Visa-Mastercard. According to the report, the RuPay debit and credit cards would work in India. But people have faced issues with overseas transactions as it is not an international or regional network like China's UnionPay.
Netizens have encouraged RuPay to enter the Russian market.
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