Visa, Mastercard and American Express have suspended operations in Russia.
Visa, Mastercard and American Express stop Russian operations
The decision followed a request by Ukraine’s President Volodymyr Zelensky and threatens to further isolate a Russian economy facing crippling financial sanctions and a string of corporate boycotts.
Visa said in a statement that it would immediately begin working with clients and partners in Russia to stop all transactions over the coming days.
Once the process is completed, transactions by Visa cards issued in Russia will no longer work outside the country, and cards issued elsewhere in the world will not work within Russia.
“We are compelled to act following Russia’s unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed,” said Al Kelly, chief executive of Visa.
Mastercard said it was suspending its operations in Russia shortly afterwards. American Express followed, adding that it would also terminate all business operations in Belarus.
The payment networks blocked multiple financial institutions in Russia from using their networks last week following the imposition of sanctions. But the move to block all transactions will worsen the nation’s financial isolation.
Mastercard and Visa disclosed that about 4% of their net revenues in 2021 came from business conducted within, into and out of Russia.
Russia’s central bank said that credit cards using the Visa and Mastercard payments systems would stop functioning overseas after March 9th. But it has downplayed the impact of the suspension, suggesting all Visa and Mastercard cards issued by Russian banks would continue to work inside Russia as transactions could be handled by a domestic operator, according to Russia’s state news agency Tass.
Some Russian banks, including Sberbank and Alfa-Bank, have said they might issue co-badged cards linked to Russia’s Mir and China’s UnionPay international payment systems.
Some Russian banks already operate the UnionPay payment system, including Gazprombank and Rosselkhozbank, said Tass.
China’s UnionPay is likely to be the alternative “system of choice” for Russian banks as it’s already accepted around the world, although not as widely as Visa and Mastercard.
But it will take significant time to re-issue millions of cards, and will add to the financial turmoil in the country.
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