Wise and Paysera scramble to place Russia restrictions after Ukraine invasion
Owing to a budding policy of economic sanctions aimed at Russia, the financial system has become one of the key areas of leverage following the invasion of Ukraine. Some fintechs are pre-empting the system.
As war returns to Europe fintech firms are reacting by increasing restrictions on Russia-linked transactions.
London-listed Wise is one such example. The money transfer service says it is placing restrictions on Russia-linked transactions , lowering the amount users can send to the country.
“We are monitoring the situation closely and comply with any sanctions. We’ve implemented restrictions on the amount people are able to send to Russia. We will keep these measures under constant review, a Wise spokesperson told AltFi.
Wise, which was founded in 2011 andlisted on the London market in an £8bn direct listing in July 2021, is also looking to keep its services open in Ukraine, as cash becomes harder to access and queues gather at ATMs.
“As long as we are able to do so, we will continue providing our service to people needing to send money to Ukraine. Recent developments in the region mean it’s more difficult to operate our service. To enable us to continue providing our service to people needing to send money to Ukraine, we’ve currently capped transfers to Ukraine, but aim to remove that cap as soon as we’re able to,” Wise's spokesperson added.
Paysera, a rival payments fintech has gone a step further. The company will no longer process transactions in Russian roubles and is closing its Russian clients' accounts as well as restricting money transfers to and from Russian banks.
Accounts of private individuals will be closed if the individual does not have the right to reside in another country deemed acceptable by the company's policy. In addition, transactions in Russian roubles will be terminated.
"The EU sanctions imposed on Russian banks on February 22 are a compromise, intended to be approved by all EU member states. We stand in solidarity with the Ukrainians and will no longer process nearly all transactions related to Russia. While we understand that we are not a giant in the financial market, we do want to send the message that we can all have an impact through the choices we make. While we refuse to transfer money, someone else might refuse to insure, produce, advise, invest, or provide transport", said Gintautas Mežetis, CEO of Paysera.
"Although we cannot impose sanctions, we do have the right to choose which clients we find acceptable and the extent of services we want to provide to them. It is not enough to impose sanctions only on the decision-makers. There are many people driving tanks and contributing to the occupation of Ukraine who we are unable to identify. Russian citizens are partly responsible for the existing government and its decisions, just as Belarusian citizens are partly responsible for the Belarusian government and its decisions," he added.