Crypto Debit Card Providers Hit After Visa Cuts Ties With Issuer

Nikhilesh De
Jan 5, 2018 at 17:00 UTC
Updated Jan 8, 2018 at 20:56 UTC
news

Visa, the payments giant, terminated a card issuer’s membership on Friday, causing cryptocurrency debit card providers to suspend their services, according to three of the affected companies.

Bitcoin payments processor BitPay announced in a statement that its European card issuer, WaveCrest Holdings, Ltd., had been told by Visa to close its accounts. The company will refund any remaining balances, as well as card order fees for anyone who purchased a card after Dec. 1, 2017.

According to BitPay:

“Yesterday our European BitPay Card issuer WaveCrest Holdings, Ltd. received direction from Visa® to immediately close all accounts of its prepaid Visa® debit card programs. The BitPay Card (non-US) is one of these programs, along with other cryptocurrency-related and standard prepaid Visa® debit cards. Unfortunately, WaveCrest was unable to provide us or cardholders with more time to prepare for this change.”

Similarly, payment providers Cryptopay and Bitwala announced they would be ceasing their services and returning remaining funds.

Berlin-based Bitwala said on Twitter that its team was holding an emergency meeting to discuss the issue. However, London-based Cryptopay announced in a subsequent tweet that it had already begun negotiating with another card issuer.

Similarly, BitPay said in its statement that it was “already in discussions with potential alternative issuers.”

Notably, the shutdowns is limited to European consumers. BitPay stated that U.S. customers would not experience any disruptions.

In a statement, a Visa Europe spokesperson said WaveCrest had lost its membership with the payments company “due to non-compliance with [its] operating rules.” As a result, all Visa cards issued by the company were closed.

Other Visa card issuers can continue to issue cryptocurrency-based cards.

Less than a year ago, BitPay announced it was expanding to 131 countries at CoinDesk’s Consensus 2017 conference. Its cards allow users to fill their balances with cryptocurrencies, but spend in euros, British pounds, or U.S. dollars.

In a statement, WaveCrest CEO Brent Almeida said:

“We have already notified our partners and cardholders of Visa’s requirement to close these accounts and our first priority is to ensure the safe and timely return of all funds. We deeply regret the inconvenience that this has caused to all of our customers affected by this decision. WaveCrest’s business outside of its Visa membership remains unaffected and we continue to invest in delivering world-class B2B payment solutions to partners around the world.”

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in BitPay.

Editor’s note: This story has been updated with statements from Visa and WaveCrest. The story’s headline has been updated to reflect new information.

App image via BitPay