Multinational financial services corporation, VISA and MasterCard have now made it more difficult for users to purchase Bitcoin and other cryptocurrencies.
Sources reveal, both VISA and MasterCard have decided to reclassify the way Bitcoin and other cryptocurrency purchases are processed on their networks.
According to present referendum to buy bitcoin, ethereum or other alt-coins instantly, their only option is to use a debit or credit card.
Transferring funds from the bank has a lower fees, but it takes several days.
Coinbase has for long accepted debit and credit cards for instant buys, however, it passes on to the buyer the standard four percent credit card transaction fee.
But in the world of change, both VISA and MasterCard have moulded into a new trend and reclassified the way Coinbase credit card purchases are processed on their networks.
Coinbase transactions 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.
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. The interest rate is also higher for cash advances — an astonishing 25.99 percent in one case. These purchases will no longer qualify for earning credit card points.
In an email to all customers Coinbase confirmed the change, claiming “the MCC code for digital currency purchases was changed by a number of the major credit card networks” and will now allow banks and card issuers to charge “additional cash advance fees.”
Sources reveal, when asked for comment a spokesperson for MasterCard had this to say: “Over the past few weeks, we have clarified to acquirers — or the merchant’s bank — the right transaction or merchant category code to use for these type of transactions (cryptocurrency purchases). This provides a consistent view of such purchases for both merchants and issuers.”
By reclassifying Coinbase VISA and MasterCard are doing their best to make it harder, slower and more expensive for people to invest in cryptocurrency.