Visa admits Russia sanctions hitting business
Visa, the world’s largest card services company, says its revenue growth slowed to a four-year low, as cross-border operations with Russia were hit by the political tension over Ukraine.
"We are caught between the politics of the United States and the politics of Russia,"Reuters quotes Byron Pollitt, Visa’s Chief Financial Officer."We're clearly seeing a drop-off in cross-border volume, and sanctions are expected to have some impact on volume."
For the first time in more than four years Visa’s quarterly revenue growth declined to single digit percentages amid a strengthening dollar. In the second quarter ended March 31 it was 7 percent, down from 11 percent in the first quarter. The company projects revenue growth to slow further this quarter.
In March Visa and another US-based payment system MasterCard suspended services to two Russian banks after President Barack Obama imposed sanctions on Russia.
President Vladimir Putin said Russia would develop its own payment system, which should start operating in about 6 months.
Visa in turn said it has assessed the situation and hopes it would still have a “meaningful opportunity” to continue business with Russia, as it would benefit both sides.
"We have 100 million cards there and it is not in anyone's best interest, inclusive of the Russians, to make those cards not available to their own citizens," Pollitt said.
Visa and MasterCard control 90 percent of the Russian market.