Coinbase, the most popular cryptocurrency stock market that has been most associated with recent speculation by retail investors, sent in early February an e-mail to some clients and warned them that card company purchases of credit begin to be treated as cash advances, resulting in higher interest rates and charges for these transactions.
Coinbase did not indicate to which companies it was referring, and requests for comments sent to the stock exchange and visas were not returned immediately.
A spokesperson Mastercard told Investopedia by e-mail: "In recent weeks, we have buyers - the merchant's bank - explained the correct transaction category code or reseller for this type of transaction (cryptocurrency purchases This provides a consistent view of these purchases. for dealers and exhibitors. "
A Reddit post, allegedly written at the end of January by a "big card of employees / bank credit," said that Visa and MasterCard customers in the United States and Canada are already affected by the changes. (See also Coinbase: What is it and how to use it?)
prepayment fee
"Recently the MCC code has changed for digital currency purchases from a number of major credit card networks," the e-mail from said Coinbase. "The new code allows banks and card issuers to raise additional cash advance fees. These fees are not charged or billed by Coinbase. "(Emphasis in the original.)
MCC codes or code codes for merchant categories ... are used by card companies to differentiate suppliers such as hotels or service stations. Credit cards generally charge additional fees for cash advances and higher than normal interest rates. For example, a common Visa card will charge you the highest amount of 10 or 5% of the transaction. The annual interest rate is 26.24%, against 16.24% to 24.99% for other purchases.
A combination of factors has probably led the card companies to take this step. Firstly, they fear that a decline in the cryptocurrency markets (the Bitcoin price has already fallen by more than 50% compared to the historical peak at the end of 2017) could trigger a wave of flaws. The reports that people are hiring home to buy Bitcoin, are just the most extreme example of recent speculation funded by crypto currency debt. Higher fees would weaken unfunded purchases and mitigate potential shortcomings. On the other hand, card companies might see the possibility of higher fees on FOMO-based purchases.
Customers with cryptocurrency exchange must use other payment methods. As mentioned in recent announcements, Coinbase accepts debit cards and linked bank accounts, but purchases using these methods can take several days.
Source
Coinbase did not indicate to which companies it was referring, and requests for comments sent to the stock exchange and visas were not returned immediately.
A spokesperson Mastercard told Investopedia by e-mail: "In recent weeks, we have buyers - the merchant's bank - explained the correct transaction category code or reseller for this type of transaction (cryptocurrency purchases This provides a consistent view of these purchases. for dealers and exhibitors. "
A Reddit post, allegedly written at the end of January by a "big card of employees / bank credit," said that Visa and MasterCard customers in the United States and Canada are already affected by the changes. (See also Coinbase: What is it and how to use it?)
prepayment fee
"Recently the MCC code has changed for digital currency purchases from a number of major credit card networks," the e-mail from said Coinbase. "The new code allows banks and card issuers to raise additional cash advance fees. These fees are not charged or billed by Coinbase. "(Emphasis in the original.)
MCC codes or code codes for merchant categories ... are used by card companies to differentiate suppliers such as hotels or service stations. Credit cards generally charge additional fees for cash advances and higher than normal interest rates. For example, a common Visa card will charge you the highest amount of 10 or 5% of the transaction. The annual interest rate is 26.24%, against 16.24% to 24.99% for other purchases.
A combination of factors has probably led the card companies to take this step. Firstly, they fear that a decline in the cryptocurrency markets (the Bitcoin price has already fallen by more than 50% compared to the historical peak at the end of 2017) could trigger a wave of flaws. The reports that people are hiring home to buy Bitcoin, are just the most extreme example of recent speculation funded by crypto currency debt. Higher fees would weaken unfunded purchases and mitigate potential shortcomings. On the other hand, card companies might see the possibility of higher fees on FOMO-based purchases.
Customers with cryptocurrency exchange must use other payment methods. As mentioned in recent announcements, Coinbase accepts debit cards and linked bank accounts, but purchases using these methods can take several days.
Source
