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| VIEW EVENT INFORMATION: Coinbase |
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VISA Issuers And Mastercard Make It Harder To Buy Bitcoin And Other Cryptocurrencies |
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About the organization Coinbase:
Type: Business
Sub-Types: Website, Application Software, Digital Currency, E-Commerce, Finance, Computer, Computer Software, Telecommunication, Telecommunication Software |
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Notable Organizations: Coinbase, Techcrunch
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| Sometime in the last week Bitcoin investors started noticing additional fees on their bank statements. It turns out that VISA issuers and Mastercard decided (how convenient!) to reclassify the way Bitcoin and other cryptocurrency purchases are processed on their networks. Incidents like this pose several challenges for the cryptocurrency industry short-term, but also show just how scared the incumbents really are.
Currently, if you want to buy bitcoin, ethereum or any other alt-coin instantly, the only option is to use your debit or credit card. Transferring funds from your bank has lower fees, but takes several days. Coinbase has long accepted debit and credit cards for instant buys, however, passing on to the buyer the standard 4 percent credit card transaction fee.
Now, it seems VISA issuers and Mastercard have quietly reclassified the way Coinbase credit card purchases are processed on their networks. Coinbase transactions (and presumably all other exchanges, as well) are now being labeled as a “cash advance” rather than a “purchase.” Fees will vary by institution, but what this means is that using a credit card will result in an additional 5 percent fee tacked on by your credit card merchant, in addition to the 4 percent credit card transaction fee already passed on by Coinbase.
Even worse is that cash advances do not fall under the standard interest-free grace period that consumers expect for other credit card purchases. The moment the Coinbase purchase goes through, the transaction accrues and compounds daily. If that isn’t bad enough, the interest rate is also higher for cash advances — an astonishing 25.99 percent in one case. Lastly, but equally as important for some consumers, these purchases will no longer qualify for earning credit card points. |
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