Credit card companies Visa and MasterCard announced on Saturday that they would shut down operations in Russia, hitting a new blow to the country’s financial system after its invasion of Ukraine.
The decision comes at the request of Ukrainian President Volodymyr Zalansky earlier on Saturday and threatens to further isolate the Russian economy facing it. paralyzing Financial sanctions and a series of corporate boycotts.
San Francisco-based Visa said in a statement that it would immediately begin working with clients and partners in Russia to halt all transactions over the next few days. Once the process is completed, visa card transactions issued in Russia will no longer operate outside the country, and cards issued elsewhere in the world will no longer operate within Russia.
“We are forced to act in the wake of Russia’s unprovoked invasion of Ukraine, and the unacceptable events we are witnessing,” said Al Kelly, CEO of Visa.
Credit card companies blocked A number of financial institutions in Russia have been using their networks last week following the imposition of sanctions.
But Saturday’s move to block all deals will exacerbate the country’s financial isolation.
The sanctions announced last week have already caused Russians in Moscow and other cities to rush to withdraw cash from the country’s banks for fear that the payment card services offered by Visa and MasterCard will stop operating. Long queues have formed at ATMs waiting for fresh deliveries of cash and some Western experts have warned of the liquidity of the banking system in Russia.
Earlier on Saturday, Zalansky called for a halt to all commercial transactions, including of Visa and MasterCard, during a video call with U.S. lawmakers.
During the hour-long zoom-in conversation with senators, Zlansky thanked the U.S. for its support but called for more military aid and sanctions to isolate Russia.
In a Twitter post following the conversation, Senator Lindsay Graham said: “Anything that could hurt the Russian economy will help the Ukrainian people and may make this war difficult for Putin.”
MasterCard, which has been operating in Russia for more than 25 years, said that following its cessation of operations, cards issued by Russian banks will no longer be supported by its network, and any card issued outside the country will no longer work at Russian merchants or ATMs.
“We do not take this decision lightly,” the company said in a statement, adding that it reflects “the unprecedented nature of the current conflict and the uncertain economic environment.”
The company said it would return the activity “when appropriate, and if permitted by law.”
Amid fears that companies may face retaliatory action by Russian hackers following their actions, MasterCard said it would remain vigilant to ensure the safety and security of its global payment system and network.
“Our cyber and intelligence teams will continue to work with governments and partners around the world to ensure that the stability, integrity and resilience of our systems continue to guide our operations and our response to possible cyber attacks,” the company said.
Earlier on Saturday, PayPal announced that it would close all its services in Russia.
“In the current circumstances, we are suspending PayPal services in Russia,” said CEO Dan Shulman. “PayPal supports the Ukrainian people and stands by the international community in condemning Russia’s violent military aggression in Ukraine.”
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