Sun 06 March 2022:
Mastercard and Visa have announced that they will cease business in Russia, the latest blow to the country’s financial sector following its invasion of Ukraine.
Mastercard announced that Russian bank cards will no longer be supported by its network, and that any Mastercard issued outside of Russia will not work in Russian retailers 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 is working with clients and partners in Russia to stop all Visa transactions in the coming days, according to the company.
“We are compelled to act following Russia’s unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed,” Visa Chairman and Chief Executive Officer Al Kelly said in a statement.
The twin suspensions were announced within 16 minutes of each other, and they followed a private video call earlier in the day between President Volodymyr Zelenskyy of Ukraine and U.S. lawmakers. During that conversation, Zelenskyy “asked us to turn off MasterCard and Visa for Russia,” Rep. Brad Sherman, a Democrat from California, tweeted. “I agree,” he added, before Mastercard and Visa made their announcements.
US President Joe Biden, in a call with Ukrainian President Volodymyr Zelenskyy, has welcomed decisions by Visa and Mastercard to suspend their operations in Russia, says the White House.
“President Biden noted his administration is surging security, humanitarian, and economic assistance to Ukraine and is working closely with Congress to secure additional funding,” a White House readout of the call said.
“This war and the ongoing threat to peace and stability demand we respond in line with our values,” Visa’s Kelly said.
Mastercard and Visa’s measures could have a significant impact on their profit lines. In the previous fiscal year, Russia accounted for 4% of Visa’s total net revenue, which included both domestic and cross-border transactions. Visa said in a report with US securities regulators this week that Ukraine contributed for around 1% of its total revenue.
According to Mastercard’s own filing, business conducted within, into, and out of Russia accounted for around 4% of its net sales in 2021. Ukraine accounted for another 2% of the total.
SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES
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