US financial services companies Visa Inc and Mastercard Inc announced on Saturday they’re suspending all operations in Russia effective immediately over the invasion of Ukraine, pointing out they’ll cease all transactions there.
Al Kelly, chief executive officer of Visa, said they’re compelled to act following Russia’s unprovoked invasion of Ukraine and announced that all transactions initiated with Russia-issued Visa cards will no longer work outside of the country within days and that any Visa cards issued outside of Russia will no longer work within the country.
Mastercard, which has operated in Russia for more than 25 years, also said Mastercards from outside of the country will not be usable at Russian merchants or ATMs while the Russia-issued cards will no longer be supported by the US payments firm’s network.
Both Mastercard and Visa had significant business in Russia. About 4% of Mastercard’s and Visa’s 2021 net revenues were derived from business conducted within, into, and out of Russia.
The White House said that Visa’s and Mastercard’s decisions to suspend their operations in Russia were welcomed by US President Joe Biden in a call with Ukraine’s President Volodymyr Zelensky.
White House readout of the call added that the Biden administration is working closely with Congress to secure additional funding and is surging security, humanitarian, and economic assistance to Ukraine.
The unprecedented sanctions imposed on Russia by the Western countries have frozen much of its central bank’s $640 billion in assets and barred several Russian banks from the global payments system SWIFT.
An increasing number of financial and technology companies have been suspending Russian operations with PayPal Holdings Inc being the latest, announcing its decision earlier on Saturday.
After its ties with the West deteriorated over Russia’s annexation of Crimea in 2014, Moscow has been taking steps to increase its financial system’s independence setting up its own banking messaging system (SPFS) as an alternative to SWIFT and its own card payment system MIR, that have begun operating in 2015.
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