Visa and Mastercard have stopped accepting credit card transactions for music downloading site AllofMP3, which is accused of illegally selling songs.
The Russian-based company, which offers chart music at a fraction of the price charged by services such as iTunes, insists it is within the law.
But US officials say AllofMP3 operates outside international agreements and no artists have been given royalties.
The site is now directing customers to pay through another site.
But Visa said it had already stopped accepting payments from that site too.
"The action Visa has taken is in line with legislation passed in Russia and with basic international copyright and intellectual property norms," a Visa spokesman said.
A Mastercard spokesman added the firm "did not tolerate the use of its network for illegal activity".
'Unfairly characterised'
Mediaservices, which owns AllofMP3, says that by paying royalties to a Russian licensing group, it is in compliance with Russian laws.
Earlier this month, Vadim Mamotin, director general of Mediaservices said: "The company has been unfairly characterised as a pirate website. Nothing could be further from the truth."
He added that the company paid royalties to the Russian Multimedia and Internet Society (ROMS), but the organisation's offers of payment to artists had been rebuffed.
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