Friday, October 31, 2008

Russia Stops Taking Credit Cards

Charlotte Bailey at reports:

Several Moscow city centre restaurants are now refusing to accept cards in a move not seen since Russia's last financial crisis almost a decade ago.

Some automated teller machines at Sberbank, the country's biggest state-owned bank, have also stopped accepting cards from other banks.

Several electronics and mobile phone stores said they no longer accepted credit card purchases.Over the weekend, Aeroflot, the biggest Russian airline, announced it had stopped taking credit cards payments for flights except from a handful of banks

I'm not sure what is behind this move, perhaps a fear by Russian firms that they will not receive payment on charges put through on the cards?

I don't expect anything like this to happen in the United States, but if it did, the demand to hold cash balances would soar, M1 would soar, and we would have deflation.

-Robert Wenzel

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