MOSCOW—Vladimir Putin and his officials are trying to convince Russians that the country’s economy will adapt to the sanctions and that imposed restrictions are an opportunity for Russia to increase local production and become more independent. But sanctions are making it difficult for people to carry out everyday transactions. Worse, as the Russian currency drops and prices rise, people are anticipating shortages like in the Soviet times—so they’re stocking up at stores. Now resourceful people are inventing risky, uncomfortable ways to access international services and vital goods.
One of the most significant disruptions has been the decision by Visa, Mastercard, and American Express networks to stop supporting Russian cards outside Russia. After March 10, tens of thousands of Russians abroad realized that their cards had been blocked. Cards still function inside Russia, but those still at home can’t order anything from international online shops and pay for foreign services. While some issues have been solved quickly (many users, including me, have learned that it is possible to pay for subscriptions at the App Store with mobile phone billing instead of a bank card), solutions to other payment problems are pricy and sometimes not safe.
Last week, one travel agency announced three-day package tours to the neighboring country of Uzbekistan, where Russians can get a local Visa or Mastercard bank card. The company charges $220 per trip, but the price doesn’t include the plane tickets. It costs about $400 to fly from Moscow to Tashkent.
Those who don’t want to travel 2,000 miles and pay $600 to open a bank account in a third country may start considering underground banking. In a group on Telegram, users ask for or offer help to send funds abroad or get them from outside of the country, now that Western Union and MoneyGram have suspended services in Russia. The system is similar to hawala, a practice popular in the Middle East that basically boils down to transferring money without actually moving it. For example, a Russian wants to transfer 1,000 euros to someone in Europe. They find a person with bank accounts in Russia and Europe and put 1,000 euros in rubles to this person’s Russian account. The latter sends 1,000 euros from their European account to the beneficiary in Europe.
It is hard to evaluate how popular these hawala transfers are, but anecdotally, they seem common. I spoke to one Russian who posted in a group on Telegram that she has bank accounts in Russia and the U.S. and could help. According to the user, who asked to stay anonymous, several people reached out to her. To protect herself, she ended up cooperating with those who happened to have mutual acquaintances with her. In total, she assisted with transfers totaling about $1,500. She says she hasn’t made any profit on it. “I am just trying to help,” she wrote to me. Another Telegram user who offered his services told me that someone asked him to transfer $3,000, but he declined because he was ready to proceed with only small payments, up to $50. As the system is built on trust, people are afraid of risks. Russian authorities and experts have already reported the increased number of scams related to the currency trade. Another person referred to underground transfers in the most popular Facebook community for Russian emigrants: “I am using this method to send donations to a dog shelter in Russia. There is no other way.” His comment collected dozens of likes—after the “special military operation” started in Ukraine, charity organizations in Russia have complained that they lost up to 30 percent of donations, including foreign payments.
Russians who happened to be stranded abroad with nonworking cards have also found creative ways to get money from their accounts. One Moscow resident who went on vacation to Oman before the “military operation” was caught off guard by the U.S. sanctions. “That’s harsh: You can’t book accommodation, rent a car, order a taxi or buy airline tickets online. You can’t even purchase a bottle of water in the supermarket,” she told me. “We withdrew cash before cards got suspended. When cards stopped working, we also discovered that we could transfer money from them to ourselves for cash pick up. Those transfers saved us.” (She preferred not to name the service not to put it on officials’ radar.)
She had planned to go from Oman to the United Arab Emirates and fly from there back to Russia. But her flight, like many others, was canceled after the U.S. and European Union closed its airspace to Russian planes, and Russia banned flights from 36 countries in response. “The cheapest flight from the United Arab Emirates was to Baku, Azerbaijan. We booked it, but when we arrived in Baku, we learned that the flights from there to Moscow got canceled, too,” she says. “We took a bus to the Russian border and crossed it by foot with all our luggage.” Now she is back in Moscow and says that all in all, her experience was not horrible compared with those of Russians who had traveled with children.
The inability to use bank cards has become a problem for hundreds of thousands who have fled Russia in fear of economic collapse, political repressions, and potential military conscription. Those who didn’t have foreign currency on their bank accounts by March 9 were banned from buying dollars in Russia. Many citizens who departed after this date were left with nonfunctioning cards and no cash. One Russian who ran away to Turkey told me how he managed to book his accommodation with Booking.com and Airbnb not accepting Russian cards. “On Airbnb, you can write directly to the landlord without paying anything. So, I reached out to many property owners, asking if I could visit a place first. It took me four days to find the housing I was satisfied with,” he said, adding that he lived in a hostel while searching. “Most landlords understood that I couldn’t pay with a card because of sanctions, and I paid in cash. The price turned out to be higher than on Airbnb. I signed the lease for one month with the possible extension.”
Another Russian who went to Dubai with her husband and children to wait out the “special military operation” solved the problem of booking accommodation differently. “Many chats for Russians in Dubai have been created lately on Telegram. And valuable contacts pop up there regularly. We found in this group a person who offered to pay for any services with his card, and we asked him to make a payment for us at Booking.com. We met with him and gave him cash: he accepts local currency and dollars. He charges a 10 percent fee for his assistance,” she said.
Chats on Telegram have also helped Russians get around shortages of some vital goods. One group functions as a platform where people look for medicines that have disappeared from shelves in their towns. (These shortages have partially been caused by foreign pharmaceutical companies stopping exporting drugs, but also because Russians have started to stock up on medication.) One Moscow region resident told me that she was looking for l-thyroxin, which is used to treat cancer. “I published a post in a group, and at the same time, I asked my acquaintances if they could check pharmacies around them. I got a response in a chat from a woman in Moldova, and I was about to buy the medicine from her. But then, one of my friends answered that she could ship the l-thyroxin from the Russian city of Tula. I chose the last option because it is easier to buy the item inside Russia than overseas. Anyway, I am grateful for the kindness of people in the chat,” she said. According to other listings on Telegram, people continue to search for l-thyroxin, anticonvulsant drugs, and hormones. As doctors have reported, it is challenging to get insulin, antidepressants, and anti-inflammatory medication as well.
Meanwhile, Russian officials, who obviously live in a parallel universe, are making public statements that there are no problems with supplies of medicine or groceries.
Some Westerners may think that restrictions will make the lives of Russians so unbearable that they will take to the streets. However, the reality is that poor citizens have to prioritize their basic needs—like getting food—over the fight for rights. My friend joked sadly that she hoped we won’t eventually see chats on Telegram where people exchange food. I hope so, too, but there are plenty of videos of people fighting for sugar in Russian supermarkets due to the shortage, so nothing is impossible.