Visa and Mastercard take steps to block Russian financial institutions from their network, complying with government sanctions over Moscow’s invasion of Ukraine.
Visa (V) – Get Visa Inc. Class A Report and Mastercard (MA) – Get Mastercard Incorporated Class A Report have both taken steps to block multiple Russian financial institutions from their network, complying with U.S. government sanctions imposed over Moscow’s invasion of Ukraine.
Visa said late on Monday it was taking prompt action to ensure compliance with applicable sanctions, adding that it will donate $2 million for humanitarian aid. Mastercard also promised to contribute $2 million.
“We will continue to work with regulators in the days ahead to abide fully by our compliance obligations as they evolve,” Mastercard said in its own statement issued late Monday.
The government sanctions require Visa to suspend access to its network for entities listed as Specially Designated Nationals, a source familiar with the matter told Reuters. The U.S. has added various Russian financial firms to the list, including the country’s central bank and second-largest lender, VTB.
Russia’s central bank on Monday was effectively blocked from accessing hundreds of billions of U.S. dollars stocked away to help defend its currency, with the ruble left to fall another 30% to an all-time low against the U.S. dollar as a result.
Several major Russian lenders, meanwhile, were locked out of the international Swift payment system, a move that added to the pressures on domestic financial markets and forced the central bank to raise its base lending rate to 20% — the highest since 2003 — and introduce capital controls in an effort to prevent a run on banks around the country.
Many Western banks, airlines and more have cut ties with Russia, calling the country’s actions against Ukraine, which it says are part of an effort to reamalgamate Ukraine into Russia, as unacceptable.
Russians rushed to ATMs and waited in long lines on Sunday and Monday amid concerns that bank cards may cease to function, or that banks would limit cash withdrawals.
