Financial institutions

Visa and Mastercard block Russian financial institutions

US payment card companies Visa Inc VN and Mastercard Inc MA.N have blocked several Russian financial institutions from their network, complying with government sanctions imposed following Moscow’s invasion of Ukraine.

Visa said Monday it was taking swift action to ensure compliance with applicable sanctions, adding it would donate $2 million for humanitarian relief. Mastercard also pledged to contribute US$2 million.

“We will continue to work with regulators in the coming days to fully meet our compliance obligations as they evolve,” Mastercard said in a separate statement late Monday.

In 2021, approximately 4% of Mastercard’s net revenue came from activities inside, inside and outside of Russia. Meanwhile, business inside, inside and outside Ukraine accounted for 2% of its net income, according to a filing released on Tuesday.

Government sanctions are forcing Visa to suspend access to its network for entities listed as specially designated nationals, a source familiar with the matter told Reuters. The United States added various Russian financial firms to the list, including the country’s central bank and second-tier VTB lender VTBR.MM.

On Saturday, the United States, Britain, Europe and Canada announced new sanctions against Russia, including blocking certain lenders’ access to the international payment system SWIFT.

Russians rushed to ATMs and waited in long lines on Sunday and Monday, fearing bank cards would stop working or banks would limit cash withdrawals.

Russia calls its actions in Ukraine a “special operation”.

Many Western banks, airlines and others have cut ties with Russia, calling the country’s actions unacceptable. European nations and Canada have closed their airspace to Russian planes. Read the full story

(Reporting by Maria Ponnezhath in Bengaluru; Editing by Christian Schmollinger, Kenneth Maxwell, Kirsten Donovan)

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