Visa, Mastercard suspend operations in Russia

                               

NEW YORK: Card payment giants Visa and Mastercard announced on Saturday (Mar 5) they will suspend operations in Russia, the latest major US firms to join the business freeze-out of Moscow over its invasion of Ukraine. 

Mastercard said that "noting the unprecedented nature of the current conflict and the uncertain economic environment", it had "decided to suspend our network services in Russia". 

Visa, for its part, said that "effective immediately" it would "work with its clients and partners within Russia to cease all Visa transactions over the coming days". 

Within days, all transactions initiated with Visa cards issued within Russia will no longer work outside of the country and any Visa cards issued outside of Russia will no longer work within the country, the company said. 

"We are compelled to act following Russia's unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed," Al Kelly, chief executive officer of Visa, said in a statement. 

"We regret the impact this will have on our valued colleagues, and on the clients, partners, merchants and cardholders we serve in Russia. This war and the ongoing threat to peace and stability demand we respond in line with our values.” 

Mastercard said its cards issued by Russian banks will no longer be supported by Mastercard networks, and the company's cards issued outside of Russia will not work at Russian merchants or ATMs. 

Mastercard said it decided to suspend its network services in Russia following its recent action to block multiple Russian financial institutions from the company's payment network, as required by regulators globally. 

Major corporations across a range of industries have halted business in Russia since its invasion began 10 days ago, including everything from US-based tech firms such as Intel and Airbnb to French luxury giants LVMH, Hermes and Chanel. 

Visa and Mastercard had already announced that they were complying with US and international sanctions imposed on Russia in the wake of its attack. 

Russia's major banks, including its largest lender Sberbank and the Russia Central Bank, downplayed the effects that the cards' suspensions would have on their clients. 

"All Visa and Mastercard bank cards issued by Russian banks will continue to operate normally on Russian territory until their expiration date," the Russia Central Bank said. 

Sberbank said in a statement on its official Telegram account that the cards "can be used for operations in the Russian territory -- to withdraw cash, make transfers using the card number, and for payment at offline as well as at online Russian stores." 

The cards would continue to work on Russian territory, it said, because all payments in Russia are made through a national system and do not depend on foreign systems. 

However, the central bank warned that Russians traveling abroad should carry alternate means of payment. 

Mastercard added that it would continue to provide pay and benefits to its nearly 200 employees in Russia.