Visa, Mastercard Suspend All Operations in Russia Effective Immediately Over Ukraine Crisis
22:23 GMT 05.03.2022 (Updated: 23:45 GMT 05.03.2022)
© REUTERS / DADO RUVIC
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Less than a week ago, the two financial companies stated that they banned various Russian financial institutions from their network to comply with US sanctions implemented in response to the Russian special military operation against Ukraine.
US-based Visa and Mastercard payment systems announced on Saturday that they are suspending operations in Russia and intend to work with customers and partners in the country to stop transactions in the coming days.
According to the Visa statement, all transactions initiated using Visa cards issued in Russia will no longer work outside the nation, and Visa cards issued by financial institutions outside of Russia will no longer work within the country, once the required processes are complete.
"We are compelled to act following Russia’s unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed," Al Kelly, chairman and chief executive officer of Visa Inc, is quoted in the statement as saying. "We regret the impact this will have on our valued colleagues, and on the clients, partners, merchants and cardholders we serve in Russia."
Shortly after, a similar statement was made by Mastercard, which said that the company had evaluated what was "most important to support the continued availability of services, if possible, to impacted people in the region."
"It’s with all of this in mind – and noting the unprecedented nature of the current conflict and the uncertain economic environment – we have decided to suspend our network services in Russia," the company's statement read. "This decision flows from our recent action to block multiple financial institutions from the Mastercard payment network, as required by regulators globally."
According to Mastercard, their network will no longer accept cards issued by Russian banks and any Mastercard issued outside of Russia will not be accepted by Russian businesses or ATMs.
The company noted that it does not plan to lay off its nearly 200 employees in Russia and intends to resume operations in the country as soon as "it is appropriate, and if it is permissible under the law."
"In the meantime, our teams across the region and around the world will continue to enable and advance our global business, supporting our customers in other geographies where we currently do business," Mastercard added.
Sberbank Visa and MasterCard Cards to Work Normally Within Russia
In response, one of Russia's biggest banks, Sberbank, issued a statement that the Visa and Mastercard ban will not affect the operation of payment system cards issued by it within the country, but payments abroad and in foreign online stores with Russian Visa and MasterCard cards would be shuttered.
The bank recommended that Russians abroad withdraw cash to pay large expenses, such as hotels and tickets, in advance.
It also noted that the Russian-based payment system, Mir, is accepted in several foreign countries, such as Turkey, the UAE, Vietnam, Armenia, Belarus, Uzbekistan, Kyrgyzstan, Tajikistan, Kazakhstan and Cyprus.
Alfa Bank noted that its Mastercard- and Visa-branded cards are expected to continue working normally for some three days, including abroad, after which they will only function within Russia.
In 2021, business performed inside, into, and out of Russia reportedly accounted for around 4% of both Mastercard and Visa's net revenue. According to a disclosure released earlier this week, commerce performed within, into, and out of Ukraine amounted for some 2% of net revenue.
Earlier, Ukrainian President Volodymyr Zelensky urged both Visa and MasterCard to ban the operation of payment cards in Russia.
Last Saturday, the US, the UK, Europe, and Canada imposed wide sanctions against Russia, including a ban for some banks on access to the global SWIFT financial network, following the start of the Kremlin's February 24 military operation against Ukraine.
