The American card and payment companies Visa and Mastercard have decided this Saturday to suspend all their operations in Russia due to the invasion of Ukraine and the economic uncertainty posed by the sanctions imposed by the international community against Moscow.
The announcement by Visa and Mastercard comes hours after Ukrainian President Volodymyr Zelensky urged a group of US lawmakers to exclude Russia from the international payments system.
U.S. President Joe Biden has also welcomed the decisions by Visa and Mastercard, the White House said on Saturday.
The suspensions will prevent Mastercard and Visa cards issued by Russian banks from working in other countries and will block cards issued abroad from buying Russian goods and services. Instead, cards issued by Russian banks with the Visa or Mastercard logo will be able to continue to work within the country because those transactions are in the hands of a local operator.
“We are compelled to act following Russia’s unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed,” said, Visa Chairman and Chief Executive Officer Al Kelly.
For its part, Mastercard has appealed to “the unprecedented nature of the current conflict and the uncertain economic environment” to justify its decision to suspend its network services in Russia. “This announcement follows on from our recent decision to block multiple financial institutions from the Mastercard payment network, as required by regulators globally,” the company statement explains.
Russia’s largest banks, including Sberbank, the country’s largest lender, and Russia’s central bank, dismiss the effects of the measures. “All bank cards issued by Russian banks will continue to work until the expiration date,” the Bank of Russia said. Sberbank added that they can be used “for cash withdrawals, making, transfers using the card number and for payments in Russian stores, both online and offline.”
The withdrawal of Visa and Mastercard is the latest measure in a wide range of retaliation against the Kremlin, which includes sanctions, but also cancellations and suspensions of commercial activity and other services, such as the international interbank payment platform SWIFT, which excluded Russia three days ago.
The Milan-based luxury group Prada has announced this Saturday that it will stop selling in Russia, as well as the sports equipment firm Puma. The Spanish group Inditex, owner of Zara, will temporarily suspend activity in the 502 stores it has in Russia, as will the Spanish jewelry chain Tous. The tech giant IBM has also announced temporary suspension of activities.
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