Mastercard and Visa are suspending their operations in Russia in protest of the country’s invasion of Ukraine.
The announcements were made 16 minutes apart on Saturday in the latest financial blow to the country following the start of the Russia-Ukraine war.
Both suspensions followed a private video call earlier in the day between President Volodymyr Zelenskyy of Ukraine and American lawmakers.
During that conversation, Zelenskyy “asked us to turn off MasterCard and Visa for Russia,” tweeted US congressman Brad Sherman. “I agree,” he added, before Mastercard and Visa made their announcements.
Mastercard said cards issued by Russian banks will no longer be supported by its network and any card issued outside the country will not work at Russian stores or ATMs.
“We don’t take this decision lightly,” Mastercard said in a statement, adding that it made the move after discussions with customers, partners and governments.
Visa said it is working with clients and partners in Russia to cease all Visa transactions over the coming days.
Al Kelly, Visa’s chairman and chief executive officer said: “We are compelled to act following Russia’s unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed.”
Earlier in the week, Visa and Mastercard announced more limited moves to block financial institutions from the networks that serve as arteries for the payments system.
Russian people have already been hit hard by heavy sanctions and financial penalties imposed by the US government and others.
Since the invasion of Ukraine, the value of the Russian currency, the ruble, has plunged by more than a third to a record low.
That’s pushing up inflation for Russian households, and all the fear has helped cause long queues at cashpoints.
Many other companies around the world have also made moves to increase the financial pressure on Russia and its people because of its attack on Ukraine.
Some are selling their stakes in Russian companies, such as energy giant BP, while others like Harley-Davidson halted product shipments to the country.
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“This war and the ongoing threat to peace and stability demand we respond in line with our values,” Visa’s Mr Kelly said.
The moves by Mastercard and Visa could make real differences to their bottom lines.
Russia accounted for four percent of all of Visa’s net revenue in its last fiscal year, including money made from domestic and cross-border activities. Ukraine accounted for about 1 percent, Visa said in a filing with US securities regulators this week.
Mastercard said in its own filing that about four percent of its net revenues during 2021 came from business conducted within, into and out of Russia. Another roughly two percent was related to Ukraine.
George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.