VISA and Mastercard Increase Fees for Crypto

Buying cryptocurrency on any crypto exchange using a credit card will cost 10% more
06 February 2018   729

Last week investors started noticing additional fees on their bank statements. Both Mastercard and VISA decided to change the way cryptocurrency purchases are processed on their networks.

Most people who purchase cryptocurrency using a credit or debit card were charged the standard 4% transaction fee. From now on customers will have to pay additional 5% fee to a credit card provider as well as 4% service fee to the exchange.

At the moment, transactions to purchase any cryptocurrency are considered  as a “cash advance” rather than a “purchase.”

Moreover, cash advances do not fall under the standard interest-free grace period that consumers expect for other credit card purchases. Cryptocurrency transactions are accrued and compounded daily. The interest rate is also higher for cash advances forming 25.99 % in one case.

This means that charges applied to any crypto purchase using a credit card will equal 10% plus interest.

By reclassifying crypto exchanges, VISA and Mastercard intend to complicate investing in cryptocurrency.

Bank of America: Cryptocurrencies Are a Threat

Bank of America (BoA) has admitted to US regulators it can not pretend any longer that cryptocurrencies are not a threat
23 February 2018   124

On February 22, the report was filed with the US Securities and Exchange Commission (SEC). It listed a range of economic, geopolitical, and operational risks that the Charlotte, NC-based bank faces as it heads into the new fiscal year. Crypto adoption was on the list for the first time.

Bank of America (BoA), which recently banned purchasing of crypto with credit cards, stated that this and other similar policies could cost the bank clients.

Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies.

The second largest bank in the U.S. said that adoption of cryptocurrencies could require the bank to make “substantial expenditures” to update its existing services and remain competitive with upstart firms.

The widespread adoption of new technologies, including internet services, cryptocurrencies, and payment systems, could require substantial expenditures to modify or adapt our existing products and services.

According to the Bank of America, cryptocurrencies could limit the institution’s ability to comply with anti-money laundering regulations.

Eventually, this is one of the first public admissions that financial institutions are beginning to worry that mass cryptocurrency adoption could one day become a reality.