Ukraine invasion: Visa and Mastercard suspend operations in Russia in massive blow to Russian economy

VISA and Mastercard have announced they are suspending operations in Russia in what's seen as a massive blow to the country's economy.

The move will see credit and debit cards issued by Russian banks null and void outside the country.

And Russian businesses and cash machines will no longer be able to accept cards issued abroad.

Both companies process a staggering 90 percent of all debit and credit card payments outside of China, making the move another devastating blow for Kremlin tyrant Vladimir Putin.

Visa's chief executive Al Kelly said: "We are compelled to act following Russia's unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed."

Mastercard said the events of the past 11 days were "shocking and devastating," adding: "We don't take this decision lightly. Mastercard has operated in Russia for more than 25 years."

It comes as online payment provider PayPal closed its services in Russia on Saturday with its boss, Dan Schulman, saying the company "stands with the international community in condemning Russia's violent military aggression in Ukraine".

And it comes as a growing list of businesses cut ties with Russia including Puma, IKEA, Apple and Microsoft. Hollywood studios have also postponed the release of new movies.

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The move is sure to pile pressure of Putin and his henchmen to pull back from the war in Ukraine as the strain of financial sanctions begin to bite Russian consumers.

It comes as Russia's currency, the ruble, hit new lows against the dollar and the country grapples with crippling inflation which shows no sign of stopping.

Pictures this week showed long queues outside cash machines in St Petersburg as locals race against time to withdraw their life savings before it's all wiped out.

In response, Russia's central bank hiked interest rates from 9.5 percent to over 20 percent in a bid to stop a run on the country's currency.

But cryptocurrency firms like Coinbase and Binance are choosing to keep operations going in the country, saying a shutdown would likely harm innocent consumers, many of whom "likely oppose what their country is doing".

The firms have promised to restrict access to sanctioned individuals and entities and said they would enforce a nationwide ban if they are forced to by the US government.

Brian Armstrong, Coinbase's co-founder, tweeted: "We don't think there's a high risk of Russian oligarchs using crypto to avoid sanctions.

"Because it is an open ledger, trying to sneak lots of money through crypto would be more traceable than using US dollars, cash, art, gold or other assets."

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