Last Friday, users of Bitcoin debit card, with VISA logo, were notified by Bitwala and Cryptopay that their cards can no longer be used at any point of sale terminals.
A similar kind of notifications was earlier issued by two more debit card service providers, Wirex and TenX.
Nearly, all of those Bitcoin debit cards have been issued by Wavecrest, a Gibraltar based company. Crypto debit cards use the crypto currency balance to settle transactions, instead of a fiat currency balance in a bank account.
To the users of Bitcoin debit cards, WaveCrest has sent the following email message:
We, WaveCrest, are the issuer of your Visa Prepaid card, which you have enrolled for through one of our program partners. Visa have today instructed us that we must close all WaveCrest issued Visa Prepaid Cards with immediate effect.
Debit card provider Cryptopay has confirmed the news through a tweet:
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!
— Cryptopay (@cryptopay) January 5, 2018
Visa has clarified that it has terminated WaveCrest’s services due to non-compliance with membership rules. Visa has also ordered to close all of its card programs.
Regarding the decision, Visa said:
[We] recently terminated a single prepaid card issuer in Europe from our network for violating Visa’s operating regulations. That issuer, WaveCrest, was required to close its Visa card products, some of which were linked to cryptocurrency wallets. Our actions were not specific to cryptocurrency, but rather reflect the [WaveCrest’s] failure to comply with Visa’s policies that ensure the safety and integrity of our payment system.
Germany-based Bitwala said
Following an announcement from our card issuer on behalf of Visa Europe, Bitwala cards are taken out of operation starting today. Our team is holding an emergency meeting to resolve the issue with the card holders best interest in mind and will make an update shortly.
Bitwala, BitPay and Wirex have informed that the funds stored in the card at the time of closure is safe and would be returned to customers. BitPay has also stated that those who have ordered cards on or after December 1, 2017 will get a refund of the card order fee.
Bitwala and Wirex has also blamed Visa and WaveCrest for not giving any kind of warning about the discontinuation of the service. Further, both companies said they are in discussions with other potential card issuers and the crypto currency card services will resume soon.
BitPay has also issued a similar statement:
We are already in discussions with potential alternative issuers for the BitPay Card which will allow us to serve customers in Europe and beyond.
The current problem is related to cards issued through WaveCrest only. Visa cards issued by other companies remain unaffected.
Visa has not given more details about the rules that were breached by WaveCrest. That has given rise to rumors that the banks are uncomfortable with Bitcoin and so they are playing behind the screen to thwart the growth of crypto currency.