PayPal suspends its services in Russia over Ukraine war

PayPal said Saturday it was suspending its services in Russia, adding to the number of firms retreating from the country in response to its invasion of Ukraine.

"Under the current circumstances, we are suspending PayPal services in Russia," Dan Schulman, PayPal's CEO, said in a letter addressed to the Ukrainian government.

The letter was posted on Twitter by Ukraine's minister of digital transformation, Mykhailo Fedorov, who has pressured businesses including Apple to Microsoft to cut ties with Russia.

"So now it's official: PayPal shuts down its services in Russia citing Ukraine aggression," Fedorov tweeted Saturday. "Thank you @PayPal for your supporting!"

A PayPal spokesperson confirmed the company was shutting down in Russia. The company will "continue work to process customer withdraws for period of time, ensuring that account balances are dispersed in line with applicable laws and regulations," the spokesperson told CNBC.

The payment processor had already discontinued domestic services in Russia in 2020. This latest action relates to its remaining business in the country, including send and receive functions and the ability to make international transfers via PayPal's Xoom remittances platform.

Russians were prevented from opening new PayPal accounts earlier this week, the company said.

PayPal is the latest payment organization to sever ties with Russia, which now faces a barrage of sanctions from the West over President Vladimir Putin's decision to invade Ukraine.

Sanctions saw SWIFT, the global interbank messaging network, bar several Russian banks, while Visa and Mastercard this week said they would also block Russian financial institutions from their networks.

"It's now basically impossible to send money to any individual in Russia," said Charles Delingpole, CEO of ComplyAdvantage, a fintech start-up that helps firms with regulatory compliance.