Visa Inc. and Mastercard Inc. each plan to suspend their operations in Russia in response to the invasion of Ukraine, the payment-technology companies said Saturday.
Visa V, -3.35% announced that it was working with its partners in Russia to “cease all transactions” in the days to come.
“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,” the company said in a release.
Beginning in 2015, the Russia government said domestic transactions in the Russian Federation had to be processed in the country and through a state-owned processor.
Russia made moves in recent years “to insulate domestic card volumes from potential sanctions,” Barclays analyst Ramsey El-Assal wrote in a Feb. 28 note to clients, given the impact of U.S. sanctions on payment cards in Russia back in 2014.
Separately, Mastercard MA, -3.00% also said it would suspend its network services in Russia.
“With this action, cards issued by Russian banks will no longer be supported by the Mastercard network,” the company said. “And, any Mastercard issued outside of the country will not work at Russian merchants 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.
Mastercard noted that it has operated in Russia for more than 25 years and has almost 200 “colleagues” in the country. The company will continue to provide pay and benefits to those workers, and if it ultimately becomes “appropriate” and “permissible,” Mastercard “will use their passion and creativity to work to restore operations.”
Mastercard said earlier this week that about 4% of its revenue in its latest fiscal year was related to Russia, while about 2% was related to Ukraine. Visa disclosed as well that about 4% of its fiscal 2021 revenue came from Russia, along with about 1% from Ukraine.
“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.
Many other companies around the world have also made moves to increase the financial pressure on Russia and its people because of its attack on Ukraine.
“This war and the ongoing threat to peace and stability demand we respond in line with our values,” Kelly said.