Visa, Mastercard Shut Operations in Russia

Global payments networks Visa Inc. (V) and Mastercard Inc. (MA) have decided to shut operations in Russia, following its unjustified Ukraine invasion. Both companies together process more than 90% of the credit and debit card transactions in the world, excluding China.

Shares of Visa closed down 3.3% at $200.29, and Mastercard stock closed down 3% at $330.76 on March 4.

Visa Suspends Russian Operations

Visa said that it is working with clients and partners in Russia to stop all Visa transactions in Russia over the coming days. Following this, any Visa card issued in Russia will no longer function outside of Russia. Similarly, any international cards issued by institutions outside of Russia will not work in Russia.

Commenting on its decision, Chairman and CEO of Visa, Al Kelly, said, “We are compelled to act following Russia’s unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed… We regret the impact this will have on our valued colleagues, and on the clients, partners, merchants, and cardholders we serve in Russia. This war and the ongoing threat to peace and stability demand we respond in line with our values.”

Mastercard’s Suspension of Russian Payments

Similarly, after holding discussions with its customers, partners, and governments, Mastercard has decided to stop payment processing of Russian cards issued with its network abroad, as well as to stop payments of merchants and ATMs for any international cards issued on its network within Russia.

Mastercard has operated in Russia for over 25 years and has around 200 colleagues in the nation, all of whom are facing the brutality of the war.

“We don’t take this decision lightly… As we take these steps, we will continue to focus on their safety and well-being, including continuing to provide pay and benefits. When it is appropriate, and if it is permissible under the law, we will use their passion and creativity to work to restore operations,” the company said in a statement.

Russia Seeks China’s UnionPay for Relief

Following the decision of the payments processors, Russian banks are turning towards China’s UnionPay system to address the issue. Banks will use UnionPay’s networks along with its Mir payment network to process transactions in order to avoid any further customer discomfort.

These steps will allow customers within Russia to use their cards until expiry; however; these measures do not provide any respite to customers outside of Russia.

Besides Visa and Mastercard, many other international companies have boycotted sales in Russia, and have completely shut operations in the invading country. These sanctions are in place to compel Russia to stop its untimely invasion of Ukraine and put an end to the war.

MA Target Price

With 13 unanimous Buys, the MA stock commands a Strong Buy consensus rating. The average Mastercard target price of $431.23 implies 30.4% upside potential to current levels. Its shares have lost 10.7% year-to-date.

V Stock Prediction

The V stock commands a Strong Buy consensus rating with 16 Buys and 3 Holds. The Visa stock prediction of $273.47 implies 36.5% upside potential to current levels. Its shares have lost 9.4% year-to-date.

Download the TipRanks mobile app now

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Read full Disclaimer & Disclosure

Related News:
Target Gains 10% on Outstanding Q4 Results & Positive Outlook
Kohl’s Jumps 7.8% on Q4 Beat and Positive Outlook
Ross Stores Q4 Results Impress; Shares Soar 9%