SANCTIONS: Ukraine is putting pressure on Visa and Mastercard to stop processing Russian card payments
The National Bank of Ukraine (NBU) has called on Visa and Mastercard to stop servicing payments cards issued by Russian banks following the Russian invasion of Ukraine.
“We must prevent the provision of financial support for armed aggression against our state through the cards of the international payment systems Visa and Mastercard. I hope that Visa and Mastercard will make a fair decision for the sake of peace in Ukraine,” NBU governor Kyrylo Shevchenko says.
The call comes as the Central Bank of Russia (CBR) maintains that payment cards, including Mastercard and Visa, issued by six Russian banks that have “fallen under the sanctions of Western states” that include exclusion from the Swift financial messaging service — Sberbank, VTB Group, Sovcombank, Novikombank, Promsvyazbank and Otkritie — “will work throughout Russia without restrictions” and that “standard contact or contactless payment with these cards is available throughout Russia”.
Cards issued by the sanctioned banks, however, are no longer available for use with Apple Pay or Google Pay, for payments abroad or with “online stores and service aggregators registered in countries that support sanctions,” the CBR says.
The NBU has itself revoked the banking licences and “liquidated” two Russia-based banks operating in Ukraine — the International Reserve Bank JSC (owned by Sberbank) and Prominvestbank — and has suspended debit transactions from “the accounts of residents of the state that has carried out armed aggression against Ukraine”.
It has also prohibited the release of cash from client accounts in foreign currency, introduced a moratorium on cross-border currency payments and set a limit of 100,000 hryvnia (US$3,336) on cash withdrawals from ATMs for all account holders other than “businesses and institutions that ensure the implementation of the government’s mobilisation plans (objectives) and entities that have the NBU’s special permission”.
In addition, the NBU has suspended “the issuing of electronic money, the replenishment of electronic wallets with electronic money and the distribution of electronic money by issuing banks”.
The NBU has not clarified which forms of electronic money the suspension applies to but has subsequently stressed that Ukraine’s system of electronic payments (SEP) is continuing to operate “in normal mode, with no interruptions” and has actively encouraged merchants to accept cashless payments.
“With this in mind, I call on all operators of retail chains and gas stations, large and small: do NOT decline cashless payments,” Kyrylo Shevchenko said in an official address.
“Because if you do, you will put Ukraine’s people under additional threat. Under martial law, both cash use and cash collection, which are linked inextricably to cash circulation, post additional risks to everyone.
“The banking system continues to provide all the necessary infrastructure and technical solutions for use of POS terminals in payments.
“Refusing to accept payment cards is unpatriotic and unforgivable.”
The measures laid out in the NBU’s Resolution 118 On the Operation of the Banking System under Martial Law “aim to ensure the reliable and stable operation of Ukraine’s financial system and facilitate the fullest support for activity of the Armed forces of Ukraine, as well as the smooth operation of critical infrastructure,” the central bank says.
Ukraine calls on Visa and Mastercard to stop servicing cards issued by Russian banks was written by Tom Phillips and published by NFCW.