Visa Created Duplicate Bitcoin Cryptocurrency Transactions
It seems like Visa still has some partners who allow cryptocurrency transactions using credit and debit cards. On Friday, February 16, Visa and Worldpay issued a joint statement that, “Over the last two days, some customers who used a credit or debit card at Coinbase may have seen duplicate transactions posted to their cardholder accounts.” The statement also added, “This issue was not caused by Coinbase.”
Not a big impact but not positive attention
While this isn’t a huge negative for cryptocurrencies, it could have two effects. The first is that it doesn’t help with the image of cryptocurrencies, such as Bitcoin, becoming accepted. Very large and mature companies such as Visa and Worldpay (now owned by Vantiv) shouldn’t be creating duplicate transactions.
The second is that it will probably get credit card companies that haven’t banned credit cards to buy cryptocurrencies to review their policy and more than likely stop these transactions. From a survey done by LendEDU, 18% of Bitcoin purchases were done with a credit card . While this isn’t an overwhelming percentage, banning credit cards would remove one way to buy them.
Of the 18% that used a credit card, 22% of them did not pay off their balance after buying Bitcoins. While this is only 4% of total buyers, these consumers may not be just losing money on their purchase but also paying a high interest rate on an asset that could fall in value.
Credit card companies have been clamping down
It isn’t surprising that credit card companies, such as Visa, would allow debit cards to be used to buy cryptocurrencies since funds are withdrawn immediately from the buyers account, but that they would have concerns about credit cards. Consumers typically have at least 25 days and up to 53 days, depending on when they buy items during their billing cycle, to pay their credit card bill. If the cryptocurrency, such as Bitcoin, were to fall in value a consumer may decide to not pay their bill and the credit card company would have a loss on its hands.
Two weeks ago Bank of America, Citigroup, J.P. Morgan Chase and Lloyds Banking Group said they would no longer allow Bitcoin and other cryptocurrencies to be bought with their credit cards. And back on January 5 it appeared that Visa Europe told some of its partners that had issued pre-paid debit cards loaded with cryptocurrencies to close their debit cards immediately due to being out of compliance with its regulations.
While these actions probably won’t make a dent in people buying cryptocurrencies such as Bitcoin, it is an indication that they still have a long road ahead to becoming mainstream.