Visa, Mastercard suspend operations in Russia over Ukraine invasion

US Payment Company Visa Inc. and MasterCard Inc. said on Saturday they suspended operations in Russia on the invasion of Ukraine, and that they would work with clients and partners to stop all transactions there.

Within a few days, all transactions initiated with visa cards issued in Russia will no longer work abroad and every visa card issued outside Russia will no longer work domestically, said the company.

“We were forced to act in the Russian invasion that had not been proven in Ukraine, and the unacceptable events we have witnessed,” Al Kelly, VISA chief executive, said in a statement.

US President Joe Biden, in a call with Ukrainian President Volodymyr Zelenskiy, welcomed Visa and Mastercard’s decision to suspend their operations in Russia, the White House said.

“President Biden recorded his government soaring, humanity, and economic assistance to Ukraine and cooperated with Congress to secure additional funds,” the reading of white house calls was added.

Moving by the payment company can mean more interference for Russia which strengthens for the future of uncertain spiral inflation, economic difficulties and squeezing sharper imported goods.
Unprecedented Western sanctions imposed in Russia have frozen most of the US $ 640 billion assets in the country; ban several banks from a fast global payment system; And send a ruble to fall freely, remove a third of the value this week.
On Monday, the Head of the Central Bank of Ukraine Kyrylo Shevchenko told the Nikkei Asia Central Bank and Zelenskiy urged Visa and MasterCard to stop their credit and debit card transactions issued by Russian banks to improve the Russian regime, paper.

More and more financial and technology companies have suspended Russian operations. PayPal Holdings Inc. announced his previous decision on Saturday.

Alternative system

Sberbank Rossii Pao, the largest lender in Russia, said the steps based on Visa and MasterCard would not affect the card users the problem in Russia, Tass News reported.

Sberbank says its customers will be able to withdraw cash, make transfers, pay both at offline stores and Russian internet stores because transactions in Russia pass through the domestic national payment card system that does not depend on foreign payment systems, according to Tass.

Russia has taken steps to improve the independence of its financial system for years, especially after the western relationship worsens the Annexation of Crimeans in 2014.

This country regulates its own banking messaging system, known as SPFS, as an alternative to Swift and the Mir’s own card payment system began operating in 2015. They are part of Moscow’s efforts to develop artificial financial tools to the West, to protect the country in the case Expanded sanctions.

MasterCard and Visa have a significant business in Russia. In 2021, around 4% of MasterCard’s net income came from business carried out inside, inside and outside Russia. Meanwhile, the business carried out inside, inside and outside of Ukraine contributed 2 percent of its net income, according to submission on Tuesday.

Visa also reported that total net income from Russia in 2021 was around 4% of its total.

Mastercard, who has been operating in Russia for 25 years, said that the cards issued by Russian banks will no longer be supported by the MasterCard network, and that each company card released outside Russia will not work in Russian traders or ATMs.

Mastercard said it decided to suspend its network service in Russia after recent action to block several Russian financial institutions from the company’s payment network, as required by regulators globally.

Visa also said this week blocked several Russian financial institutions from their network in accordance with government sanctions imposed on Moscow’s invasion to Ukraine.