Credit card giants MasterCard and Visa halted service to several Russian banks as a part of U.S. sanctions regarding Russia’s conflict with Ukraine. Russia hastily annexed the southern Ukrainian peninsula of Crimea against the United Nations wishes, hence the U.S. sanctions. Both MasterCard and Visa’s statements on Russian banks, issued on Friday, cited compliance with U.S. law.
What the embargo means for Russian e-commerce is yet to be seen. Russia is among several countries in which e-commerce was rapidly growing. Predictably, the pullout by MasterCard and Visa was denounced by Russian financial leaders and affected the Russian stock market. Russian stocks, shaky since the tensions with Ukraine escalated, continued to drop on Friday.
What Does it Mean For Russian Banks?
Russian Banks affected by the MasterCard-Visa embargo include Bank Rossiya, Sobinbank, InvestCapitalBank and SMP Bank. The entire list of banks was unavailable as of Friday, 2:00 p.m. eastern time, but several more Russian banks are impacted by the MasterCard-Visa block, as they were also processing transactions for third-party banks. As a result, carriers of the affected Russian bank cards cannot pay for goods and services, but are still able to withdrawal cash from the banks.
The Associate Press reported that each Russian bank was strategically selected to impact Russia President Vladimir Putin and his inner circle. Bank Rossiya is rumored to be the bank of choice for senior officials in Russia while SMP Bank’s billionaire co-owners, Arkady and Boris Rotenberg, are said to be childhood friends of Putin.
Instabill Not Affected by MasterCard-Visa Block on Russian Banks
Instabill provides merchant accounts to thousands of merchants across more than 160 countries, but none in Russia, and is therefore unaffected by MasterCard and Visa’s withdraw from Russian banks. Had Instabill maintained merchant accounts and relationships with the affected banks, it would be forced to abide by operating regulations set forth by MasterCard and Visa.
Instabill has an excellent reputation in the international payments ecosystem in providing competitive credit card processing to low-, medium- and high-risk businesses. To inquire about Instabill’s merchant services, speak with a live merchant account representative at 1-800-314-2713.