Responding to the Russian Bear

It was hard last month to view the events in Ukraine with an attitude of studied detachment—the attitude, after all, that we business journalists practice when examining industry news. We are so bound up in that tradition of objectivity, in fact, that it surprises us when a momentous event shakes us out of it, if only briefly.

But Russia’s unprovoked invasion on Feb. 24, its military’s wanton and indiscriminate attacks on civilian targets—the sheer brutality of the thing—was exceptional. So we couldn’t help cheering when the payments industry reacted with language one would hope a modern state would understand, whether it’s a democracy or autocracy. And Russia’s leader has left little doubt over the years which camp his country falls into.

The reaction at first was rather tepid, with Visa and Mastercard, for example, disconnecting Russian banks that had been sanctioned following the attack on Ukraine. But they soon followed up with harder stuff. At the end of the first week of March, all three major networks, now including American Express, said they were shutting down transactions for their branded cards issued by Russian banks and for cards used inside the country but issued by banks outside of it. That left open only transactions, such as they are, handled locally, without recourse to the networks.

The language accompanying the March actions was hard stuff, a refreshing departure from the usual, carefully crafted corporate speak we’re accustomed to. Visa’s chief executive, Al Kelly, for example, used phrases like “unprovoked invasion” and “unacceptable events” and “the ongoing threat to peace and stability.” Mastercard’s CEO, Michael Miebach, characterized the exceptional tactic as suited to exceptional times: “We don’t take this decision lightly.”

Now, these actions, as momentous as they are, are not likely to deter the Russian autocrat who started the whole thing. Nor are sanctions of any sort likely to make him reconsider his revanchism, regardless of the suffering it may impose.

At this moment, in the middle of March, Ukraine is holding out against an onslaught the like of which hasn’t been seen in Europe since World War II. The gallantry of the Ukrainians in standing up to the Russian invasion has inspired the admiration of the world, and long may that resistance continue, until the Russian bear decides it’s had enough and retreats to lick its wounds.

But regardless of the ultimate outcome, it’s gratifying to find the giants in the payments industry willing to take a stand and to back it up with concrete action. That action, combined with a similar move by the SWIFT cross-border payments network, has marked out an honorable path in a threatening time.

—John Stewart, Editor, john@digitaltransactions.net