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5 Mar, 2022 22:32

Visa, MasterCard suspend Russian operations

The financial services corporations move to cut all Russia-issued bank cards from international transactions
Visa, MasterCard suspend Russian operations

International card companies Mastercard and Visa have announced they are ceasing operations and disconnecting all Russian banks from their payment systems due to sanctions related to Moscow’s ongoing war in Ukraine. 

However, Russia-issued cards will continue to work within the country, since all local payments are processed via the internal National Payment Card System (NSPK), created in 2014.

Visa Inc. announced on Saturday night that it was “immediately” beginning to “work with its clients and partners within Russia to cease all Visa transactions over the coming days.”

Once complete, all transactions initiated with Visa cards issued in Russia will no longer work outside the country and any Visa cards issued by financial institutions outside of Russia will no longer work within the Russian Federation.

“We regret the impact this will have on our valued colleagues, and on the clients, partners, merchants and cardholders we serve in Russia,” said Al Kelly, chairman and CEO of Visa.

Mastercard made a similar decision which followed its “recent action to block multiple financial institutions from the Mastercard payment network, as required by regulators globally.”

...noting the unprecedented nature of the current conflict and the uncertain economic environment – we have decided to suspend our network services in Russia.

While all Visa and MasterCard-branded cards issued by Russian banks will stop working abroad – all internal transactions are expected to proceed as usual since they are processed via the NSPK ever since the first rounds of Ukraine-related Western sanctions in 2014.

Russia also has its own national payment system, Mir, which was launched by the Central Bank in 2015, a year after sanctions against the country were introduced. Back then, several Russian banks were temporarily unable to use Visa and Mastercard due to the penalties.

The unprecedented flurry of Western sanctions on Russian banks, businesses, media outlets, senior officials, and lawmakers comes in retaliation to Moscow’s war in Ukraine.

The Kremlin claims the February 24 attack was launched with the purpose of “demilitarization” and “denazification” of the country, and to protect the people of eastern Ukraine following years of a grueling blockade that claimed thousands of lives. 

Kiev insists the invasion was unprovoked, maintaining it had no plans to retake the breakaway Donetsk and Lugansk regions by force.