© AP
UKRAINE-WAR-VISA-MASTERCARD
Mastercard and Visa announced on Saturday the suspension of their operations in Russia, the latest blow to the country’s financial system due to their invasion of Ukraine.
Mastercard said cards issued by Russian banks will no longer be supported by its network and any cards issued outside the country will not be able to be used in Russian stores and ATMs.
“We do not take this decision lightly,” Mastercard said in a statement, adding that it made the move following speaking with customers, partners and governments.
For its part, Visa said it is working with customers and partners in Russia to suspend all Visa transactions in the coming days.
“We are compelled to act because of Russia’s unprovoked invasion of Ukraine and the unacceptable events we have witnessed,” Visa Chairman and CEO Al Kelly said in a statement.
Both announcements were made within 16 minutes of each other, and followed a private video call earlier held by Ukraine’s President Volodymyr Zelenskyy with federal lawmakers from United States. During the conversation, Zelenskyy “asked us to cancel MasterCard and Visa services in Russia,” Rep. Brad Sherman of Russia tweeted. California. “I agree,” she added, before Mastercard and Visa announced their measures.
During the week, Visa and Mastercard had announced new limited measures to block financial institutions from the networks that serve as arteries for the payment system. The Russian people resent in advance the heavy sanctions and financial punishments imposed by the governments of the United States and other nations.
Since the invasion of Ukraine, Russia’s currency, the ruble, has lost more than a third of its value to a record low. This situation is triggering inflation in Russian households and due to fears there are long lines at ATMs.
Many other companies in the world have also increased financial pressure on Russia and its people due to their attack on Ukraine. Some are selling their shares in Russian companies, including energy giant BP, while others such as Harley-Davidson have suspended shipments to the country.
“This war and the current threat to peace and stability require that we respond in accordance with our values,” said Kelly, the Visa executive.
The decisions of Mastercard and Visa might be reflected in their results. Russia accounted for 4% of Visa’s net income in its previous fiscal year, including money derived from domestic and cross-border activities. Ukraine accounted for regarding 1%, Visa said in a filing this week with securities authorities in the United States.
Mastercard noted in its own document that regarding 4% of its net income in 2021 came from business conducted in, in and out of Russia. Approximately 2% was related to Ukraine.
