The Visa and Mastercard credit card companies announced on Saturday (03.05.2022) the suspension of their operations in Russia, the last large US firms to freeze commercial activity with Moscow due to its invasion of Ukraine.
Mastercard said it decided to “suspend our network services in Russia,” “taking into account the unprecedented nature of the current conflict and the uncertain economic environment.”
For its part, Visa indicated that it will work “immediately” with its “customers and partners inside Russia to stop all Visa transactions in the coming days.”
“We are compelled to act following Russia’s unprovoked invasion of Ukraine and the unacceptable events we have witnessed,” Visa CEO Al Kelly was quoted as saying in a statement.
Russian banks minimize impact
“Our colleagues, our customers and our partners have been affected in ways most of us cannot imagine,” Mastercard said on its side.
Russian Visa and Mastercard bank cards will no longer work abroad, while those issued abroad will no longer work in Russia, the US groups said.
Russia’s biggest banks, including Sberbank, the country’s biggest lender, and Russia’s Central Bank, played down the effects the card suspensions would have on their customers.
However, the Central Bank warned that Russians traveling outside the country should consider alternative methods of payment.
Sanctions and exodus of international companies
The decision of both entities comes a week after the United States and the European Union (EU), along with other Western partners, agreed to remove “certain” Russian banks from the Swift international system, which accentuates Russia’s disconnection from the financial system. international. The Swift transaction system is the foundation of the global financial system and is used by 11,000 banks in 200 countries or territories to make transfers.
Major corporations in a range of sectors have halted business in Russia following the invasion of Ukraine ten days ago, from US-based tech firms like Intel and Airbnb to French luxury giants like LVMH, Hermes and Chanel.
The American Bank JPMorgan Chase calculated yesterday that the Russian economy will contract 7% in 2022 due to the war in Ukraine, twice as much as anticipated a few days ago, as a result of the sanctions imposed by the West against Moscow and due to the exodus of international companies from the country.