New Warning on Buying Crypto with Credit Cards
Coinbase just sent an email alert to customers, warning about new changes being implemented by a number of credit card companies.
“Recently, the MCC code for digital currency purchases was changed bya number of the major credit card networks. The new code will allow banks and card issuers to charge additional “cash advance” fees. These fees are not charged or collected by Coinbase. These additional fees will show up as a separate line item on your card statement.”
The MCC code, or Merchant category code, gives credit card companies a way to classify different types of goods and services that customers buy.
This allows them to deny certain charges, add extra fees and note whether to report purchases to the IRS.
In addition, some companies including Bank of America, J.P. Morgan Chase, Citigroup and Capital One are now rejecting credit card crypto purchases altogether. Ethnews contacted Capital One, who said they are now banning all customers from buying cryptocurrency.
“Capital One continues to closely monitor developments in cryptocurrency markets and exchanges, and will regularly evaluate the decision as cryptocurrency markets evolve.” [We have] started declining credit card transactions to purchase cryptocurrency due to the limited mainstream acceptance and the elevated risks of fraud, loss, and volatility inherent in the cryptocurrency market.”
There is some good news in the world of crypto payment processing. Square recently announced that its Cash App now allows customers to buy and sell Bitcoin.
Bitstamp also announced a new partnership with he mega merchant processor Masterpayment, that will allow users to save 5 to 8 percent when using Visa and Mastercard to buy Bitcoin, Litecoin, Ethereum and Ripple.