This is the latest blow to Russia's financial system following its invasion in Ukraine. American Express also announced that they will be suspending their operations in Russia on Sunday.
American Express stated that their cards would no longer be accepted at Russian ATMs and merchants. American Express also announced that they would be closing all business operations in Belarus.
American Express stated in a statement that "Do What Is Right" is one of its company values. This principle has been our guide through this difficult crisis, and it will continue to guide us as we stand with our customers and colleagues in a bid for peace.
Mastercard announced that Russian banks issued cards will no longer be supported and Mastercards issued outside Russia will not work in Russian ATMs or stores.
Mastercard stated in a statement that they don't take the decision lightly and added that they made it after consulting with partners, customers, and governments.
Visa stated that it is working with Russian clients and partners to stop all Visa transactions in the coming days.
Al Kelly, Visa Chairman and Chief Executive Officer, stated in a statement that "We are compelled" to act after Russia's unprovoked invasion Ukraine and the other unacceptable events witnessed.
The announcement of the twin suspensions was made within 16 minutes of one another. It followed a private conference call between U.S. lawmakers and President Volodymyr Zilensky of Ukraine earlier in the day. Zelensky asked for us to disable MasterCard and Visa Russia during that conversation. Representative Brad Sherman, a Democrat, from California, tweeted. He added that he agreed, just before Mastercard's and Visa's announcements.
Visa and Mastercard announced earlier in the week that they would make more limited moves to prevent financial institutions from accessing the networks that provide the payment system's arteries. The U.S. government has already imposed financial sanctions and heavy sanctions on the Russian people.
The ruble, the Russian currency has seen a drop in value since the invasion of Ukraine. Its record low of 3% is more than a third of its previous level. This is causing inflation in Russia and resulting in long lines at ATMs.
Other companies around this world have made similar moves to increase financial pressure on Russia. This is in response to the attack on Ukraine. Some companies are selling stakes in Russian corporations, like energy giant BP. Others, such as Harley-Davidson, have stopped product shipments to Ukraine.
Kelly, Visa spokesperson said that "This war and the continuing threat to stability and peace demand that we respond in accord with our values."
Mastercard's and Visa's actions could have a significant impact on their bottom lines. In its last fiscal year of operations, Russia made up 4% of Visa's total net revenue. This includes money from cross-border and domestic activities. According to Visa, Ukraine was responsible for approximately 1% of Visa's net revenue in its last fiscal year. This statement was made in a filing this week with U.S. securities regulators.
Mastercard stated in its own filings that approximately 4% of its net revenue for 2021 was derived from Russia-related business. Another 2% was related with Ukraine.