Card payment companies Visa and Mastercard say they will suspend operations in Russia, joining a growing list of international companies refusing to do business with Moscow over its invasion of Ukraine.
The moves, following a request by Ukrainian President Volodymyr Zelenskyy earlier on Saturday, deal another blow to Russia’s financial sector and are set to further isolate its sanctions-hit economy.
Mastercard announced that cards issued by Russian banks would no longer be supported by its network and any card issued outside the country would not work at Russian shops or ATMs.
“We don’t take this decision lightly,” Mastercard said in a statement, adding that it made the move after discussions with customers, partners and governments.
Visa also said cards issued in Russia would no longer work outside the country, adding that it was working with clients and partners in Russia to cease all Visa transactions in the coming days.
“We are compelled to act following Russia’s unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed,” Visa Chairman and Chief Executive Officer Al Kelly said in a statement.
US President Joe Biden, in a call with Zelenskyy, welcomed the companies’ decisions.
“President Biden noted his administration is urging security, humanitarian, and economic assistance to Ukraine and is working closely with Congress to secure additional funding,” a White House readout of the call said.
The two credit card giants had already announced that they were complying with US and international sanctions imposed on Russia following the February 24 invasion.
Russia’s major banks, including its largest lender Sberbank and the Russia Central Bank, downplayed the effects the card suspensions would have on their clients.
“All Visa and Mastercard bank cards issued by Russian banks will continue to operate normally on Russian territory until their expiration date,” the Russia Central Bank said, warning Russians travelling abroad, however, that should carry alternate means of payment.
Economist Mohamed Haidar said the decision by Visa and Mastercard would have a “real devastating effect and it may cripple a lot of businesses”.
“We are talking about the sum of 210 million cardholders in Russia,” he told Al Jazeera, adding that there would be hundreds of billions of dollars in unpaid bills.
Visa’s and Mastercard’s announcements came hours after PayPal halted its services in Russia.
Ukrainian Deputy Prime Minister Mykhailo Fedorov tweeted a letter early Saturday from PayPal CEO Dan Schulman officially announcing: “Under the current circumstances, we are suspending PayPal services in Russia.”
He added that PayPal would continue to support its staff in the region and would focus on “enabling our customers and our global employee community to support” humanitarian efforts in Ukraine.