The cryptocurrency debit card is something that just feels right. What could be more natural than spending electronic money with electronic payments?
Two companies leading this trend are Shakepay and Xapo. It seems, however, that this emerging arena for cryptocurrencies is facing a new problem, at least for now. VISA has issued a directive ordering Shakepay and Xapo to cease their services to customers living outside the European Union by October 15, 2017.
The Shakepay team commented on their website blog as well as on Twitter. Per their blog:
“Our partner bank is being nudged by VISA to immediately stop issuing cards to residents living outside of the European Territory…All top ups and card loads will remain operational until October 15th, 2017. You will not be able to issue a new card, however. It is also recommended that you spend all available balances on your card by the deadline…For those getting their accounts deactivated soon, we still love ya. It’s not you, it’s us. But we won’t let you go that easily. We anticipated this would happen. Expect some awesome things from Shakepay in the next few months.”
Head of Xapo debit card Anni Rautio responded on the Xapo blog stating:
“According to VISA’s recent communication regarding different debit card programs, only customers in the European territory will be able to order new Xapo debit cards, effective today. In addition, Xapo must suspend service on all existing Debit Cards for users who live outside of the European territory by October 15th, 2017.”
Xapo recently received a Gibralter e-money license by the Gibraltar Financial Services Commission, which allows Xapo to issue cryptocurrencies in multiple fiat currencies. Currently Xapo only deals in US dollars and euros.
The motivations behind VISA’s ultimatum remain unknown. However, gaps created outside Europe are likely to be filled by competitors, highlighting the debit card space as an emerging new frontier of competition for FinTech firms looking to sharpen their cutting edge. As competition in the debit card space ramps up, we should expect further developments from more companies, and hopefully expansion of supported territories leading to reinstitution of coverage outside Europe.
Regardless of this incident, cryptocurrencies being spent via debit cards are as close as you can get to a forgone conclusion.