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Bitcoin Visa debit cards are cancelled

220 points by nicota 9y ago

randomerr 9y ago
That weird. Bitcoin has been on up swing the last 3 months since the insider trading scandal has been dying down. https://www.coindesk.com/price/ https://www.coindesk.com/price/ Maybe there's a crack down from EU on Bitcoin backed cards WaveCrest didn't want to deal with it yet.
- jacquesm 9y ago
  The pricing news on that page reads like a parody of what you read about ordinary stocks.
  - numismatex 9y ago
    Not a parody, exactly the same on most exchanges compared to stock trading exchanges. I've made 1,000% gains since late September using traditional stock trading techniques -- fundamental analysis and technical analysis - they work.
- Steeeve 9y ago
  There was insider trading happening? I'm shocked.
lawlessone 9y ago
Just a general AML clampdown ? I can't imagine payment services are actually worried about bitcoin (yet at least) ?
- RickS 9y ago
  I can't imagine they wouldn't be. There's a lot of gray/black money in bitcoin, and it has to get on the grid somehow. A debit card you can spend anywhere is a dream come true for that.
  - TazeTSchnitzel 9y ago
    Big payment networks do not want to appear complicit in money laundering.
    - exelius 9y ago
      HSBC/RBS/Citi were fine with it; and given the amount of the fines, it was plenty profitable and they’re likely still doing it.
      - user5994461 9y ago
        That's not correct. There is always some amount of fraud that manage to go through all the checks. That doesn't mean it's intentional. And that certainly doesn't mean that any financial service can stop doing any verification and become a paradise for fraudsters.
        jacquesm 9y ago
        > That doesn't mean it's intentional. Except that of course it was: https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-9-billion-u-s-fine-in-money-laundering-case-idUSBRE8BA05M20121211 https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-...
        _jal 9y ago
        This is a great bit from the article: "Mexican traffickers used boxes specifically designed to the dimensions of an HSBC Mexico teller’s window to deposit cash on a daily basis."
      - Angostura 9y ago
        Give the number of people getting their bank accounts mysteriously closed. I don;t think they are fine with it
      - JumpCrisscross 9y ago
turblety 9y ago
I think this will be good in the long run. If VISA (and Mastercard) end up allowing Bitcoin affiliated payments through their platform, then merchants will end up not providing native support for crypto payments, as they can just use their current infrastructure. If we want to destroy these payment monopolies in place of a (more, but I understand not completely) decentralized system, we need to encourage merchants to just implement payments directly. edit: typical hackernews. any pro bitcoin comments result in downvotes.
- joosters 9y ago
  Ah, another classic "This is good for Bitcoin"
  - repomies691 9y ago
    I didn't see it that way, more like advocating the development of some kind of open, permissionless payment network. Bitcoin could be it but it has ridiculous network fees, which opens the possibilities for challengers. If everything works very fluently with the traditional payment infrastructure, there is no big demand for that kind of payment network, and no incentives to develop it.
    - bringtheaction 9y ago
      The challengers are here already. For example, XRB.
      - zepolen 9y ago
        Wow I tried it and you're right RaiBlocks is a game changer. Instant transaction and zero fee? Hows the security though?
        blueprint 9y ago
        Can you make the fact you're a shill any more obvious?
crypt1d 9y ago
WaveCrest seems to be the card provider for all major crypto debit card offerings. Its actually so popular among top searches for 'btc debit card' that I'm starting to think they are actually running the show and just have a few different front ends. Initially, they only closed visa cards for holders that were outside of EU, but now it seems to include everyone. The issue seems specific to EU-based Visa issuers. US ones seem unaffected, for now.
- _0nac 9y ago
  The major exception is Monaco, although this is only hypothetical since they haven't actually issued any cards. It's also, ahem, a house of cards for its investors, but that's another story told on my blog: https://gyrovague.com/2017/06/16/monaco-doing-the-math-on-an-ico-where-the-house-always-wins/ https://gyrovague.com/2017/06/16/monaco-doing-the-math-on-an...
  - repomies691 9y ago
    I have always classified Monaco as one of those ICO projects where they don't even plan to actually implement the business model. Because why would you when you can just party 10 years in Ibiza with the raised ICO funds?
    - sametmax 9y ago
      You just described most iCO really.
      - Cthulhu_ 9y ago
        I'm going to start one, just going to call it Ibizacoin or something.
        rpeden 9y ago
        Go for it! Honesty seems to have worked out well for the Useless Ethereum Token guy: https://uetoken.com/ https://uetoken.com/
thisisit 9y ago
All bitcoin visa cards? My understanding is that bitcoin Visa was already restricted to European countries since September: https://news.bitcoin.com/bitcoin-debit-cards-non-european-residents-visas-new-rules/ https://news.bitcoin.com/bitcoin-debit-cards-non-european-re... Mastercard joined: https://www.reddit.com/r/Bitcoin/comments/75gu4d/mastercard_joins_visa_to_ban_issuing_btc_prepaid/ https://www.reddit.com/r/Bitcoin/comments/75gu4d/mastercard_... So, now only Bitcoin Mastercard remains for European countries? Edit: Added "Bitcoin" to make sure the gentleman below is not confused.
- user5994461 9y ago
  Correction: Cards issued by bitcoin services were terminated. Visa works perfectly fine like it always did. Let's not mix things up.
- aceoflala 9y ago
  From the second reddit link, >This shows one important thing: banksters are DESPERATE to stop BTC and they act without control. Hilarious... The Bitcoin community is a source of endless cringe, :-)
sametmax 9y ago
First bitcoin was insignificant. Then people made fun of it. Now current institutions will have to choose between embracing it and fighting it. Some of them do one thing, apparently VISA chose another.
- doktrin 9y ago
  VISA most likely cares above all else about making money for VISA. Likewise, Steam probably doesn't care how people pay for their games : they just want to be paid. If they move away from bitcoin, it's probably because they deem it unviable / unprofitable / too much of a pain in the ass. Not everything is a grand ideological battle, and there's no need to go looking for complicated explanations when the simple and naive interpretation makes eminent sense.
  - djsumdog 9y ago
    It's part of the general problem that bitcoin isn't really fungable for goods. Maybe it was back when the value was more stable or grew slowly, or the transaction fees were cheaper. But you're totally right. Currently it's barely worth the effort compared to traditional payment system in many contexts.
- saalweachter 9y ago
  Eh, some people still mock Bitcoin as insignificant. (As a currency/asset store/technology.)
- acdha 9y ago
  Or watching it collapse under its own weight: why does Visa even need to care as long as their transaction rate is 4-5 orders of magnitude better and their fees aren’t a whole multiple of most transaction amounts?
  - sametmax 9y ago
    We have ligthning comming up, anx 600+ altcoins to test.
synthmeat 9y ago
Most interesting thing here is that this came without any prior notice to any parties in the process, effective immediately. Sure looks like someone pressed a panic button.
- throwaway5752 9y ago
  Seems like it was a very bad business idea in the first place, and I'm surprised it wasn't cancelled sooner. Before you downvote me consider the business model of credit card processors, and how volatility and rapidly deflating currency would effect their cash flow.
  - jstanley 9y ago
    > how volatility and rapidly deflating currency would effect their cash flow. Not at all? You obviously don't understand what a bitcoin debit card is. It's just like a normal debit card, but you fund it with bitcoin. The company you get the card from sells your bitcoin for fiat currency at the time you make a purchase (or at the time you top up the card, depending on how they do it). The properties of bitcoin are completely irrelevant to the mechanics of the card.
    - tw04 9y ago
      >The properties of bitcoin are completely irrelevant to the mechanics of the card. On what planet? If the price fluctuates the way bitcoin has been, Wavecrest could literally be bankrupt before Visa even knew about it to pause any further transactions. At which point VISA is responsible, you think they're going to risk billions of dollars on a currency that is clearly a bubble at this point?
      - jstanley 9y ago
        No, that is wrong. 1.) Wavecrest assumes absolutely no exchange rate risk as they don't deal with the BTC, a company like Xapo does 2.) Xapo make a very big margin on the bitcoin sale 3.) The companies that perform the sale at topup time rather than purchase time work out how many GBPs you get after they've sold your BTC, so they assume no risk at all, and the companies like Xapo that perform the sale at purchase time structure their operations to minimise the risk of losing money, and they're aware of the risk, and they're far from the first company in the history of the world whose operations require them to adequately manage risk.
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tobiaswk 9y ago
Bitcoin is currently not what Bitcoin was when it was created. Slow peer-to-peer transactions and high processing fees. Average fees are hovering around 30 dollars. That's an average. Unconfirmed transactions has been at over 100k for months. The mempool is also hovering around an ATH. The Bitcoin is crippled. Sentences like "store of value" are now the term used to describe Bitcoin. Very far from what the Bitcoin used to be. I think there is a real possibility of a "death spiral of the blockchain". Fees will increase and it will become impossible to move coins on the blockchain besides the upper 10% of bitcoin holders. For traders on exchanges bitcoin seems fast; because no transactions are taking place. When you actually decide to move your bitcoins to a wallet you own you'll pay high fees... if not your transaction could take months to clear or never actually clear. No wonder Visa cards are being cancelled. The fork that occurred on 1st August created Bitcoin Cash. This fork is much closer to what the Bitcoin was. Bitcoin Cash is this today. Removal of the segwit code (which hasn't solved anything), disabling of RBF (replace-by-fee) enabling 0-confirmation transactions again. A new DAA (difficulty adjustment algorithm). Finally increase the block size to 8MiB. The Bitcoin has been crippled on purpose by Blockstream deep in the pockets of bankers and insurance companies. Blockstream is the main contributor to the Bitcoin development. Look at the sponsors; https://www.blockstream.com/about/#investors https://www.blockstream.com/about/#investors Before the bankers, and their followers, got indirectly involved in Bitcoin development there never was any discussion about limiting the block size to 1MiB; in fact the opposite was discussed. See; https://twitter.com/adam3us/status/636410827969421312?lang=e.. https://twitter.com/adam3us/status/636410827969421312?lang=e.... https://bitcointalk.org/index.php?topic=1314.msg15143#msg151.. https://bitcointalk.org/index.php?topic=1314.msg15143#msg151.... https://np.reddit.com/r/btc/comments/71h884/pieter_wuille_im.. https://np.reddit.com/r/btc/comments/71h884/pieter_wuille_im.... Now all of this has led to a complete divide and clusterfuck of the community. It is an very ugly and toxic environment and is sad to look at. On top of that we now have thousands of alternative coins and blockchains.
- wmeredith 9y ago
  "death spiral of the blockchain" or death spiral of Bitcoin? There's an army of alt coins waiting to take its place. A lot of them are garbage, most are OK, but a handful of them are brilliant. Bitcoin was the proof of concept and it was very successful in that light, but as a consumer product it is quite flawed. The survivors of the current bubble will be the ones that change the world. I'm not sure Bitcoin will be among them.
ablation 9y ago
> We're being oppressed! Oh dear. I hope that was said with tongue firmly in cheek, because anyone who truly believes that their Bitcoin Visa card being cancelled is a form of "oppression" needs a reality check.
- thisisit 9y ago
  I am sure when the card was introduced these same people would have said - See, bitcoin is so great it is now accepted by Visa and Mastercard. Now we get this. Sometimes it seems the thought process has evolved to - Heads I win, Tails you lose.
  - logfromblammo 9y ago
    Huh. I didn't know Bitcoins could be flipped.
    - beager 9y ago
      They can be flipped, but it takes three hours to know if it was heads or tails.
- jstanley 9y ago
  On the spectrum of actions that goes from "supportive" on one side through "completely irrelevant" in the middle and "oppressive" on the other side, this action lies on the oppressive side.
  - geezerjay 9y ago
    At which point in time did "less convenient" became "oppressing"?
- Sebguer 9y ago
  The guy calls someone saying it's not oppression a snowflake.
  - 9y ago
edpichler 9y ago
Sad news. I used cryptopay.me, but they haven't pronounced yet.
XnoiVeX 9y ago
Just noticed WaveCrest is based out of Gibraltar. It seems quite easy to start a company based in Gibraltar. What are the advantages or disadvantages? Just curious.
- erazor42 9y ago
  It's a fiscal paradise, like Bahamas + low taxes
- grigjd3 9y ago
  Tax shelter.
- snowpanda 9y ago
  + ~ 10% corp. tax rate (no VAT, gains tax etc.) + the legal system is based on English law + English is the first language + time zone is central to Europe + lots of things are allowed such as gambling (hence why online gambling sites are located here often), + Part of EU yet self governing. (well technically an UK Overseas Territory but they are far from listening to anything the UK says). + No exchange control... etc.
ShabbosGoy 9y ago
I wonder if this affects Monaco. I was interested in their value prop, especially the ability to receive a low foreign transaction fee while traveling.
clemenspw 9y ago
Only Wavecrest issued cards. For example, TenX will have Wirecard as a new card issuer until they get their own banking license. "Visa have today instructed us that we must close all WaveCrest issued Visa Prepaid Cards." This is Wavecrest specific, nothing to do with crypto.
- LMYahooTFY 9y ago
  There appears to be a statement from /u/WirexApp stating it's more than Wavecrest?
boysabr3 9y ago
I wonder why this happened. Visa is primarily a technology company - not a financial institution. It's incentivesed to keep fraud on visa cards low (so that merchants continue to accept it) and keep its ecosystem of issuers + acquirers happy. If I'm not missing anything, I believe this must have happened because of unusually high levels of fraud on Bitcoin visa cards. Certain acquirers might've complained about abnormal amounts of "shady" volume from WaveCrest BINs. Alternatively, Visa might have seen a settlement risk on WaveCrest's end. I.e. Visa might be worried that fluctuations in BTCs price would put WaveCrest in a position that they wouldn't be able to settle funds with Visa (and consequently the acquirers + merchants). Any other ideas on what could've prompted this? I think if this was anti-BTC regulatory action, the prompt to turn off these cards would've come from WaveCrest's banking partners and not Visa.
- Kazamai 9y ago
  Tether
  - jaxytee 9y ago
    Exactly. The SEC has said they consider crytpos securities. That would mean the fraudulent price manipulation in the crytpo space (Bitfinex treating tether as USD and pushing up the bid) is securities fraud. This is probably why Wells Fargo stopped clearing Dollar transactions for Bitfinex.
    - ActsJuvenile 9y ago
      Wire transfer fraud. I am an insider in the Bitcoin industry, and within 1 day of opening a new bank account we started seeing fraudulent wires flooding in. When we dug deeper, it was shocking to see how many Americans' bank credentials have been hacked. It takes almost no effort for a EEU/RUS hacker to send a wire from a hacked bank account. Once the fraudulent wire is sent, rest of the wire transfer system is tediously manual. So wire network participants simply choose to block bank accounts that receive repeated bad wires. This is why Wells Fargo cut out Bitfinex and Visa has decided to stop working with Bitcoin companies. ACH fraud is even more rampant because you can pull money from someone's account without their consent (as long as they don't notice/contest within certain number of days). Coinbase profit margin is 0.5% per trade, so they need to keep their ACH fraud rate below that number to not lose money. ACH fraud rate is well over 1% industry-wide. This is why I strongly believe that Coinbase has to be losing massive amounts to ACH chargebacks.
edpichler 9y ago
Cryptopay pronounced: "Unfortunately, our card issuer instructed us to cease all Cryptopay prepaid cards starting January 5th, 2018. All funds stored on cards are safe and will be returned to your Cryptopay accounts ASAP. Sorry for all the inconvenience caused, we’re working on the solution!" https://twitter.com/cryptopay/status/949243633911332864 https://twitter.com/cryptopay/status/949243633911332864
kennyasare 9y ago
A few thoughts from a CEO in this space: 1. There are very few issuing banks for crypto <> fiat debit cards. Internationally there has been 1 WaveCrest; which as of a few months ago decided to discontinue support. 2. Even when a bank will sponsor a crypto <> fiat debit card into one of the payment networks, the company offering the card will face constant pressure from their own bankers. 3. This happening is from my perspective just a quick look behind the curtain of the Digital Currency infrastructure problem as it exists today. There is no good way in, or out of digital currency at the moment, and the ones that exist are tenuous at best. The base truth is that Traditional banks are not capable of supporting new methods of value transfer. That means that the companies that build and provide infrastructure for those methods are currently at the mercy of a partner who basically wont help them. I always try and make the charitable assumption about the motives of others and my take on the banking <> digital currency relations is basically this: Banks have a business model that has worked well for generations; they do a little fractional reserve, they extract as many fees as they can invent, and they centralize the control of wealth. The promise of digital currency is that everyone will have the capability to do that for themselves. So, its not surprising to me that it is hard for them to work with those of us who are building bridges and on/off ramps between the two systems. With all of that being said, I am sorry for all of the debit card users who are currently without an off ramp, and I can assure you that the folks at BitPay, Xapo, and all of the other companies that lost access to the EU are working as hard as possible to bring those programs back online.
- staplers 9y ago
  The irony of making it difficult to exit crypto means traditional banking will long-term be on the losing end as people who buy into crypto (even as novelty) won't want to "cash out" due to difficulty while realizing how convoluted the fiat process is when viewed from the outside. They'll find ways to stay in crypto and get things done.
  - JumpCrisscross 9y ago
    > traditional banking will long-term be on the losing end as people who buy into crypto (even as novelty) won't want to "cash out" due to difficulty There is context for this. China and Venezuela's capital controls are why everyone wants to hold renminbi and bolivars.
kennyasare 9y ago
Also, FWIW none of us make any money on offering these debit card products. We actually do it to give people that have digital currency a quick off ramp. Here is how the programs technically work: 1. Infrastructure company pre funds an account with an issuing bank. 2. User sends digital currency to infrastructure company to add to their card. 3. Infrastructure company receives that currency, and alerts bank to debit their account for fiat. 4. Infrastructure company has to find an exchange to trade OTC as often as possible to protect against as much volatility as possible, while keeping in mind the minimum OTC trade size is generally $250k USD. 5. Infrastructure company has to wait 3 days for a wire to then add more funds to the pre funded account.
- JumpCrisscross 9y ago
  > Infrastructure company has to find an exchange to trade OTC as often as possible to protect against as much volatility as possible, while keeping in mind the minimum OTC trade size is generally $250k USD One can loosely think of an appreciating cryptocurrency as a short-term loan. You're out cash up front. Later, and only later, you get it back plus a little more. The infrastructure company in your example is thus, by turning cryptocurrency's promise of cash tomorrow into cash today, providing maturity transformation [1]. This is one of the core services of a bank. It is also an inherently risky business on account of the asset-liability mismatch. [1] https://en.wikipedia.org/wiki/Maturity_transformation https://en.wikipedia.org/wiki/Maturity_transformation
  - kennyasare 9y ago
    The "appreciating cryptocurrency" part is tricky though, right? Speculating on currency prices is a business; it is *not however the business that digital currency infrastructure companies are in.
    - JumpCrisscross 9y ago
      > Speculating on currency prices is a business; it is not however the business that digital currency infrastructure companies are in Yes it is. It may not be how they market themselves. But it's the principal risk they take and, directly and indirectly, the principal determinant of their profitability.
arisAlexis 9y ago
its a specific company that had non bitcoin products too
scotty79 9y ago
... and that's when credit card duopoly starts to bite.

220 points by nicota 9y ago

That weird. Bitcoin has been on up swing the last 3 months since the insider trading scandal has been dying down. https://www.coindesk.com/price/ https://www.coindesk.com/price/ Maybe there's a crack down from EU on Bitcoin backed cards WaveCrest didn't want to deal with it yet.

jacquesm 9y ago
The pricing news on that page reads like a parody of what you read about ordinary stocks.
- numismatex 9y ago
  Not a parody, exactly the same on most exchanges compared to stock trading exchanges. I've made 1,000% gains since late September using traditional stock trading techniques -- fundamental analysis and technical analysis - they work.
Steeeve 9y ago
There was insider trading happening? I'm shocked.

lawlessone 9y ago

Just a general AML clampdown ? I can't imagine payment services are actually worried about bitcoin (yet at least) ?

RickS 9y ago
I can't imagine they wouldn't be. There's a lot of gray/black money in bitcoin, and it has to get on the grid somehow. A debit card you can spend anywhere is a dream come true for that.
- TazeTSchnitzel 9y ago
  Big payment networks do not want to appear complicit in money laundering.
  - exelius 9y ago
    HSBC/RBS/Citi were fine with it; and given the amount of the fines, it was plenty profitable and they’re likely still doing it.
    - user5994461 9y ago
      That's not correct. There is always some amount of fraud that manage to go through all the checks. That doesn't mean it's intentional. And that certainly doesn't mean that any financial service can stop doing any verification and become a paradise for fraudsters.
      - jacquesm 9y ago
        > That doesn't mean it's intentional. Except that of course it was: https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-9-billion-u-s-fine-in-money-laundering-case-idUSBRE8BA05M20121211 https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-...
        _jal 9y ago
        This is a great bit from the article: "Mexican traffickers used boxes specifically designed to the dimensions of an HSBC Mexico teller’s window to deposit cash on a daily basis."
    - Angostura 9y ago
      Give the number of people getting their bank accounts mysteriously closed. I don;t think they are fine with it
    - JumpCrisscross 9y ago

turblety 9y ago

I think this will be good in the long run. If VISA (and Mastercard) end up allowing Bitcoin affiliated payments through their platform, then merchants will end up not providing native support for crypto payments, as they can just use their current infrastructure. If we want to destroy these payment monopolies in place of a (more, but I understand not completely) decentralized system, we need to encourage merchants to just implement payments directly. edit: typical hackernews. any pro bitcoin comments result in downvotes.

joosters 9y ago
Ah, another classic "This is good for Bitcoin"
- repomies691 9y ago
  I didn't see it that way, more like advocating the development of some kind of open, permissionless payment network. Bitcoin could be it but it has ridiculous network fees, which opens the possibilities for challengers. If everything works very fluently with the traditional payment infrastructure, there is no big demand for that kind of payment network, and no incentives to develop it.
  - bringtheaction 9y ago
    The challengers are here already. For example, XRB.
    - zepolen 9y ago
      Wow I tried it and you're right RaiBlocks is a game changer. Instant transaction and zero fee? Hows the security though?
      - blueprint 9y ago
        Can you make the fact you're a shill any more obvious?

crypt1d 9y ago

WaveCrest seems to be the card provider for all major crypto debit card offerings. Its actually so popular among top searches for 'btc debit card' that I'm starting to think they are actually running the show and just have a few different front ends. Initially, they only closed visa cards for holders that were outside of EU, but now it seems to include everyone. The issue seems specific to EU-based Visa issuers. US ones seem unaffected, for now.

_0nac 9y ago
The major exception is Monaco, although this is only hypothetical since they haven't actually issued any cards. It's also, ahem, a house of cards for its investors, but that's another story told on my blog: https://gyrovague.com/2017/06/16/monaco-doing-the-math-on-an-ico-where-the-house-always-wins/ https://gyrovague.com/2017/06/16/monaco-doing-the-math-on-an...
- repomies691 9y ago
  I have always classified Monaco as one of those ICO projects where they don't even plan to actually implement the business model. Because why would you when you can just party 10 years in Ibiza with the raised ICO funds?
  - sametmax 9y ago
    You just described most iCO really.
    - Cthulhu_ 9y ago
      I'm going to start one, just going to call it Ibizacoin or something.
      - rpeden 9y ago
        Go for it! Honesty seems to have worked out well for the Useless Ethereum Token guy: https://uetoken.com/ https://uetoken.com/

thisisit 9y ago

All bitcoin visa cards? My understanding is that bitcoin Visa was already restricted to European countries since September: https://news.bitcoin.com/bitcoin-debit-cards-non-european-residents-visas-new-rules/ https://news.bitcoin.com/bitcoin-debit-cards-non-european-re... Mastercard joined: https://www.reddit.com/r/Bitcoin/comments/75gu4d/mastercard_joins_visa_to_ban_issuing_btc_prepaid/ https://www.reddit.com/r/Bitcoin/comments/75gu4d/mastercard_... So, now only Bitcoin Mastercard remains for European countries? Edit: Added "Bitcoin" to make sure the gentleman below is not confused.

user5994461 9y ago
Correction: Cards issued by bitcoin services were terminated. Visa works perfectly fine like it always did. Let's not mix things up.
aceoflala 9y ago
From the second reddit link, >This shows one important thing: banksters are DESPERATE to stop BTC and they act without control. Hilarious... The Bitcoin community is a source of endless cringe, :-)

sametmax 9y ago

First bitcoin was insignificant. Then people made fun of it. Now current institutions will have to choose between embracing it and fighting it. Some of them do one thing, apparently VISA chose another.

doktrin 9y ago
VISA most likely cares above all else about making money for VISA. Likewise, Steam probably doesn't care how people pay for their games : they just want to be paid. If they move away from bitcoin, it's probably because they deem it unviable / unprofitable / too much of a pain in the ass. Not everything is a grand ideological battle, and there's no need to go looking for complicated explanations when the simple and naive interpretation makes eminent sense.
- djsumdog 9y ago
  It's part of the general problem that bitcoin isn't really fungable for goods. Maybe it was back when the value was more stable or grew slowly, or the transaction fees were cheaper. But you're totally right. Currently it's barely worth the effort compared to traditional payment system in many contexts.
saalweachter 9y ago
Eh, some people still mock Bitcoin as insignificant. (As a currency/asset store/technology.)
acdha 9y ago
Or watching it collapse under its own weight: why does Visa even need to care as long as their transaction rate is 4-5 orders of magnitude better and their fees aren’t a whole multiple of most transaction amounts?
- sametmax 9y ago
  We have ligthning comming up, anx 600+ altcoins to test.

synthmeat 9y ago

Most interesting thing here is that this came without any prior notice to any parties in the process, effective immediately. Sure looks like someone pressed a panic button.

throwaway5752 9y ago
Seems like it was a very bad business idea in the first place, and I'm surprised it wasn't cancelled sooner. Before you downvote me consider the business model of credit card processors, and how volatility and rapidly deflating currency would effect their cash flow.
- jstanley 9y ago
  > how volatility and rapidly deflating currency would effect their cash flow. Not at all? You obviously don't understand what a bitcoin debit card is. It's just like a normal debit card, but you fund it with bitcoin. The company you get the card from sells your bitcoin for fiat currency at the time you make a purchase (or at the time you top up the card, depending on how they do it). The properties of bitcoin are completely irrelevant to the mechanics of the card.
  - tw04 9y ago
    >The properties of bitcoin are completely irrelevant to the mechanics of the card. On what planet? If the price fluctuates the way bitcoin has been, Wavecrest could literally be bankrupt before Visa even knew about it to pause any further transactions. At which point VISA is responsible, you think they're going to risk billions of dollars on a currency that is clearly a bubble at this point?
    - jstanley 9y ago
      No, that is wrong. 1.) Wavecrest assumes absolutely no exchange rate risk as they don't deal with the BTC, a company like Xapo does 2.) Xapo make a very big margin on the bitcoin sale 3.) The companies that perform the sale at topup time rather than purchase time work out how many GBPs you get after they've sold your BTC, so they assume no risk at all, and the companies like Xapo that perform the sale at purchase time structure their operations to minimise the risk of losing money, and they're aware of the risk, and they're far from the first company in the history of the world whose operations require them to adequately manage risk.

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tobiaswk 9y ago

Bitcoin is currently not what Bitcoin was when it was created. Slow peer-to-peer transactions and high processing fees. Average fees are hovering around 30 dollars. That's an average. Unconfirmed transactions has been at over 100k for months. The mempool is also hovering around an ATH. The Bitcoin is crippled. Sentences like "store of value" are now the term used to describe Bitcoin. Very far from what the Bitcoin used to be. I think there is a real possibility of a "death spiral of the blockchain". Fees will increase and it will become impossible to move coins on the blockchain besides the upper 10% of bitcoin holders. For traders on exchanges bitcoin seems fast; because no transactions are taking place. When you actually decide to move your bitcoins to a wallet you own you'll pay high fees... if not your transaction could take months to clear or never actually clear. No wonder Visa cards are being cancelled. The fork that occurred on 1st August created Bitcoin Cash. This fork is much closer to what the Bitcoin was. Bitcoin Cash is this today. Removal of the segwit code (which hasn't solved anything), disabling of RBF (replace-by-fee) enabling 0-confirmation transactions again. A new DAA (difficulty adjustment algorithm). Finally increase the block size to 8MiB. The Bitcoin has been crippled on purpose by Blockstream deep in the pockets of bankers and insurance companies. Blockstream is the main contributor to the Bitcoin development. Look at the sponsors; https://www.blockstream.com/about/#investors https://www.blockstream.com/about/#investors Before the bankers, and their followers, got indirectly involved in Bitcoin development there never was any discussion about limiting the block size to 1MiB; in fact the opposite was discussed. See; https://twitter.com/adam3us/status/636410827969421312?lang=e.. https://twitter.com/adam3us/status/636410827969421312?lang=e.... https://bitcointalk.org/index.php?topic=1314.msg15143#msg151.. https://bitcointalk.org/index.php?topic=1314.msg15143#msg151.... https://np.reddit.com/r/btc/comments/71h884/pieter_wuille_im.. https://np.reddit.com/r/btc/comments/71h884/pieter_wuille_im.... Now all of this has led to a complete divide and clusterfuck of the community. It is an very ugly and toxic environment and is sad to look at. On top of that we now have thousands of alternative coins and blockchains.

wmeredith 9y ago
"death spiral of the blockchain" or death spiral of Bitcoin? There's an army of alt coins waiting to take its place. A lot of them are garbage, most are OK, but a handful of them are brilliant. Bitcoin was the proof of concept and it was very successful in that light, but as a consumer product it is quite flawed. The survivors of the current bubble will be the ones that change the world. I'm not sure Bitcoin will be among them.

ablation 9y ago

> We're being oppressed! Oh dear. I hope that was said with tongue firmly in cheek, because anyone who truly believes that their Bitcoin Visa card being cancelled is a form of "oppression" needs a reality check.

thisisit 9y ago
I am sure when the card was introduced these same people would have said - See, bitcoin is so great it is now accepted by Visa and Mastercard. Now we get this. Sometimes it seems the thought process has evolved to - Heads I win, Tails you lose.
- logfromblammo 9y ago
  Huh. I didn't know Bitcoins could be flipped.
  - beager 9y ago
    They can be flipped, but it takes three hours to know if it was heads or tails.
jstanley 9y ago
On the spectrum of actions that goes from "supportive" on one side through "completely irrelevant" in the middle and "oppressive" on the other side, this action lies on the oppressive side.
- geezerjay 9y ago
  At which point in time did "less convenient" became "oppressing"?
Sebguer 9y ago
The guy calls someone saying it's not oppression a snowflake.
- 9y ago

edpichler 9y ago

Sad news. I used cryptopay.me, but they haven't pronounced yet.

XnoiVeX 9y ago

Just noticed WaveCrest is based out of Gibraltar. It seems quite easy to start a company based in Gibraltar. What are the advantages or disadvantages? Just curious.

erazor42 9y ago
It's a fiscal paradise, like Bahamas + low taxes
grigjd3 9y ago
Tax shelter.
snowpanda 9y ago
+ ~ 10% corp. tax rate (no VAT, gains tax etc.) + the legal system is based on English law + English is the first language + time zone is central to Europe + lots of things are allowed such as gambling (hence why online gambling sites are located here often), + Part of EU yet self governing. (well technically an UK Overseas Territory but they are far from listening to anything the UK says). + No exchange control... etc.

ShabbosGoy 9y ago

I wonder if this affects Monaco. I was interested in their value prop, especially the ability to receive a low foreign transaction fee while traveling.

clemenspw 9y ago

Only Wavecrest issued cards. For example, TenX will have Wirecard as a new card issuer until they get their own banking license. "Visa have today instructed us that we must close all WaveCrest issued Visa Prepaid Cards." This is Wavecrest specific, nothing to do with crypto.

LMYahooTFY 9y ago
There appears to be a statement from /u/WirexApp stating it's more than Wavecrest?

boysabr3 9y ago

I wonder why this happened. Visa is primarily a technology company - not a financial institution. It's incentivesed to keep fraud on visa cards low (so that merchants continue to accept it) and keep its ecosystem of issuers + acquirers happy. If I'm not missing anything, I believe this must have happened because of unusually high levels of fraud on Bitcoin visa cards. Certain acquirers might've complained about abnormal amounts of "shady" volume from WaveCrest BINs. Alternatively, Visa might have seen a settlement risk on WaveCrest's end. I.e. Visa might be worried that fluctuations in BTCs price would put WaveCrest in a position that they wouldn't be able to settle funds with Visa (and consequently the acquirers + merchants). Any other ideas on what could've prompted this? I think if this was anti-BTC regulatory action, the prompt to turn off these cards would've come from WaveCrest's banking partners and not Visa.

Kazamai 9y ago
Tether
- jaxytee 9y ago
  Exactly. The SEC has said they consider crytpos securities. That would mean the fraudulent price manipulation in the crytpo space (Bitfinex treating tether as USD and pushing up the bid) is securities fraud. This is probably why Wells Fargo stopped clearing Dollar transactions for Bitfinex.
  - ActsJuvenile 9y ago
    Wire transfer fraud. I am an insider in the Bitcoin industry, and within 1 day of opening a new bank account we started seeing fraudulent wires flooding in. When we dug deeper, it was shocking to see how many Americans' bank credentials have been hacked. It takes almost no effort for a EEU/RUS hacker to send a wire from a hacked bank account. Once the fraudulent wire is sent, rest of the wire transfer system is tediously manual. So wire network participants simply choose to block bank accounts that receive repeated bad wires. This is why Wells Fargo cut out Bitfinex and Visa has decided to stop working with Bitcoin companies. ACH fraud is even more rampant because you can pull money from someone's account without their consent (as long as they don't notice/contest within certain number of days). Coinbase profit margin is 0.5% per trade, so they need to keep their ACH fraud rate below that number to not lose money. ACH fraud rate is well over 1% industry-wide. This is why I strongly believe that Coinbase has to be losing massive amounts to ACH chargebacks.

edpichler 9y ago

Cryptopay pronounced: "Unfortunately, our card issuer instructed us to cease all Cryptopay prepaid cards starting January 5th, 2018. All funds stored on cards are safe and will be returned to your Cryptopay accounts ASAP. Sorry for all the inconvenience caused, we’re working on the solution!" https://twitter.com/cryptopay/status/949243633911332864 https://twitter.com/cryptopay/status/949243633911332864

kennyasare 9y ago

A few thoughts from a CEO in this space: 1. There are very few issuing banks for crypto <> fiat debit cards. Internationally there has been 1 WaveCrest; which as of a few months ago decided to discontinue support. 2. Even when a bank will sponsor a crypto <> fiat debit card into one of the payment networks, the company offering the card will face constant pressure from their own bankers. 3. This happening is from my perspective just a quick look behind the curtain of the Digital Currency infrastructure problem as it exists today. There is no good way in, or out of digital currency at the moment, and the ones that exist are tenuous at best. The base truth is that Traditional banks are not capable of supporting new methods of value transfer. That means that the companies that build and provide infrastructure for those methods are currently at the mercy of a partner who basically wont help them. I always try and make the charitable assumption about the motives of others and my take on the banking <> digital currency relations is basically this: Banks have a business model that has worked well for generations; they do a little fractional reserve, they extract as many fees as they can invent, and they centralize the control of wealth. The promise of digital currency is that everyone will have the capability to do that for themselves. So, its not surprising to me that it is hard for them to work with those of us who are building bridges and on/off ramps between the two systems. With all of that being said, I am sorry for all of the debit card users who are currently without an off ramp, and I can assure you that the folks at BitPay, Xapo, and all of the other companies that lost access to the EU are working as hard as possible to bring those programs back online.

staplers 9y ago
The irony of making it difficult to exit crypto means traditional banking will long-term be on the losing end as people who buy into crypto (even as novelty) won't want to "cash out" due to difficulty while realizing how convoluted the fiat process is when viewed from the outside. They'll find ways to stay in crypto and get things done.
- JumpCrisscross 9y ago
  > traditional banking will long-term be on the losing end as people who buy into crypto (even as novelty) won't want to "cash out" due to difficulty There is context for this. China and Venezuela's capital controls are why everyone wants to hold renminbi and bolivars.

kennyasare 9y ago

Also, FWIW none of us make any money on offering these debit card products. We actually do it to give people that have digital currency a quick off ramp. Here is how the programs technically work: 1. Infrastructure company pre funds an account with an issuing bank. 2. User sends digital currency to infrastructure company to add to their card. 3. Infrastructure company receives that currency, and alerts bank to debit their account for fiat. 4. Infrastructure company has to find an exchange to trade OTC as often as possible to protect against as much volatility as possible, while keeping in mind the minimum OTC trade size is generally $250k USD. 5. Infrastructure company has to wait 3 days for a wire to then add more funds to the pre funded account.

JumpCrisscross 9y ago
> Infrastructure company has to find an exchange to trade OTC as often as possible to protect against as much volatility as possible, while keeping in mind the minimum OTC trade size is generally $250k USD One can loosely think of an appreciating cryptocurrency as a short-term loan. You're out cash up front. Later, and only later, you get it back plus a little more. The infrastructure company in your example is thus, by turning cryptocurrency's promise of cash tomorrow into cash today, providing maturity transformation [1]. This is one of the core services of a bank. It is also an inherently risky business on account of the asset-liability mismatch. [1] https://en.wikipedia.org/wiki/Maturity_transformation https://en.wikipedia.org/wiki/Maturity_transformation
- kennyasare 9y ago
  The "appreciating cryptocurrency" part is tricky though, right? Speculating on currency prices is a business; it is *not however the business that digital currency infrastructure companies are in.
  - JumpCrisscross 9y ago
    > Speculating on currency prices is a business; it is not however the business that digital currency infrastructure companies are in Yes it is. It may not be how they market themselves. But it's the principal risk they take and, directly and indirectly, the principal determinant of their profitability.

arisAlexis 9y ago

its a specific company that had non bitcoin products too

scotty79 9y ago

... and that's when credit card duopoly starts to bite.