Cross-border payments during the ongoing Russia-Ukraine conflict: Examining the effects experienced thus far
In the wake of the conflict between Russia and Ukraine, many countries have responded with assistance to Ukraine and sanctions on Russia. This has led to significant upheaval, particularly in the realm of cross-border payments.
On February 24, 2022, Russia invaded Ukraine, causing hundreds of deaths and displacing hundreds of thousands. The war has resulted in severe bombardment of major cities, limiting the ability for payout services to function effectively.
One key focus of discussion has been the interbank messaging service SWIFT, with partial cut-offs being implemented in Russia. Visa, Mastercard, and American Express have blocked or severed ties with financial institutions in Russia, further complicating cross-border transactions.
Analysis of pricing data is being used to study the impact of the Russia-Ukraine conflict on cross-border payments. Our own pricing data is being used to understand the changes in cross-border payments due to the conflict. Cross-border payments are being closely monitored in this context, with the Russia-Ukraine conflict prompting a focus on this area.
In Ukraine, some companies have reduced fees for sending money to recipients in the country. The conflict between Russia and Ukraine is likely to result in a financial hit for companies like Mastercard, potentially causing a 6% loss of revenue.
Besides the well-known countries, 26 nations have committed to support Ukraine with a post-war security force on land, sea, and air. This coalition includes Germany, France, and the USA, and aims to help Ukraine deter aggression and secure peace after a ceasefire or peace agreement. These countries coordinate sanctions against Russia alongside the USA, and support includes expanded air defense and military, financial, and humanitarian aid.
The impact of the Russia-Ukraine conflict on cross-border payments is being studied through the use of industry-leading newsletters. Access to extensive research and analysis on cross-border payments globally, including the industry-leading newsletter, is available for free by creating an account.
This article is brought to you by Lucy Ingham, James McKee, and Valentina Vitali. For more insights, we invite you to visit our LinkedIn profiles.
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