More Payments Players Forbid Credit Card Cryptocurrency Purchases

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February 5, 2018 10:38 PM

Lloyds Banking Group, JP Morgan Chase, Bank of America, Citigroup, Discover, and Virgin Money’s UK licensee are among the financial services firms who have stopped supporting the purchase of cryptocurrencies via their credit cards.

More financial services companies are refusing to support virtual currency purchases made with their credit cards. Last week, ETHNews reported that Capital One “has started declining credit card transactions to purchase cryptocurrency,” though the company is open to reevaluating this policy down the line.

On February 5, it emerged that the UK licensee of Virgin Money had banned customers from buying digital assets with its credit cards, though a spokesman clarified that its debit cards could still be used for that purpose.

Hours earlier, Lloyds Banking Group seemingly became the first UK financial services company to enact such a ban. A spokeswoman for the group announced that, “Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, [all of which belong to the group,] we do not accept credit card transactions involving the purchase of cryptocurrencies.”

On February 3, JPMorgan Chase & Co. implemented a ban of its own, citing the credit risk associated with allowing digital asset purchases. A day earlier, Bank of America began declining transactions with cryptocurrency exchanges, though like Virgin Money, the bank continues to allow debit card purchases of virtual assets. That same day, Citigroup also moved to halt transactions relating to the purchase of cryptocurrencies, though a spokeswoman for the company left the door open to a reversal of the new rule, promising that the corporation would “continue to review our policy as this market evolves.”

David Nelms, the CEO of Discover Financial Services, said on January 24 that his company was not allowing clients to buy cryptocurrency with its credit cards either, citing difficulties in maintaining full compliance with anti-money laundering standards while supporting digital asset purchases.

Other credit card issuers are wary of allowing cryptocurrency purchases due to price volatility and to questions that the new asset class raises with regards to fraud protection.

However, these concerns did not stop American Express from partnering with FinTech firm Abra, which offers a service that enables its customers to buy and sell bitcoin. 

On February 1, the cryptocurrency exchange Coinbase notified customers that some banks and credit card issuers would charge customers “additional ‘cash advance’ fees” for using the platform.

Also on February 1, Mastercard Inc. CFO Martina Hund-Mejean revealed that the payment network saw a 22 percent increase in its cross-border volumes so far in 2018, due in part to clients buying digital assets with the company’s cards.

Adam Reese is a Los Angeles-based writer interested in technology, domestic and international politics, social issues, infrastructure and the arts. Adam is a full-time staff writer for ETHNews and holds value in Ether and BTC.

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