After announcing last Friday that they would not be processing any transactions for Russian banks, Visa Inc. (NYSE: V) and MasterCard Inc. (NYSE: MA) restarted payment processing on Saturday. Payment processing was halted following the inclusion of individuals who own banks on a list of 20 Russian officials and businesspeople who have been identified as targets of U.S. sanctions related to Russia’s annexation of Crimea.
SMP Bank, which is owned by Arkady and Boris Rotenberg, has had its payment processing resumed. A report in the Financial Times cites a statement from Visa:
Based on clarifications provided to Visa by the US government, Visa has determined that we are not required to block SMP Bank’s access to our network. As a result, Visa has reestablished network connectivity with SMP.
Payment processing was not lifted for Bank Rossiya, which was itself targeted by the sanctions. Visa also lifted processing restrictions on Investitsionny Soyuz and InvestKapitalBank, according to the Financial Times.
The Russian parliament is now considering a bill that would ban transaction services that are based outside of the country. If passed, that would prohibit either Visa or MasterCard from servicing payments in Russia. It is not clear how much impact that would have on either country.
Should Russia enact the legislation, it could have the unintended effect of isolating the country further from the international financial network. Politically that might be popular because ordinary Russians view the elite as raiding the country’s resources and moving them abroad, according to a report at USA Today, but such isolation could do more harm to the large Russian companies that play on the international stage.