By STAN CHOE – AP Business Writer
NEW YORK (AP) – Mastercard and Visa are suspending operations in Russia, the companies said Saturday, in the latest blow to the country’s financial system following its invasion of Ukraine.
Mastercard said cards issued by Russian banks are no longer supported by its network and any Mastercard issued outside the country will not work in Russian stores or ATMs.
“We do not take this decision lightly,” Mastercard said in a statement, adding that the move came after discussions with customers, partners and governments.
Visa said it is working with customers and partners in Russia to halt 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 chairman and chief executive officer Al Kelly said in a statement.
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The two suspensions were announced within 16 minutes, following a private video call between President Volodymyr Zelenskyy of Ukraine and US lawmakers earlier in the day. During that conversation, Zelenskyy “asked us to turn off MasterCard and Visa for Russia,” tweeted Rep. Brad Sherman, a Democrat from California. “I agree,” he added before Mastercard and Visa made their announcements.
Earlier in the week, Visa and Mastercard announced more limited steps to block financial institutions from the networks that serve as arteries for the payments system. The Russian people have already been hit hard by severe sanctions and fines imposed by the US government and others.
Since the invasion of Ukraine, the value of Russia’s ruble has fallen by more than a third to a record low. This is driving up inflation for Russian households, and all the fear has contributed to long lines at ATMs.
Many other companies around the world have also taken steps to increase financial pressure on Russia and its people over its attack on Ukraine. Some are selling their stakes in Russian companies like energy giant BP, while others like Harley-Davidson have halted product shipments to the country.
“This war and the ongoing threats to peace and stability require that we respond in accordance with our values,” said Visa’s Kelly.
Mastercard and Visa’s moves could make a real difference in their bottom line. Russia accounted for 4% of all Visa net revenues in its last fiscal year, including revenues from domestic and cross-border activities. Ukraine accounted for about 1%, Visa said in a filing with US securities regulators this week.
Mastercard said in its own filing that about 4% of its net revenue in 2021 came from deals made within, to and from Russia. Another 2% related to Ukraine.
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