Visa denies role in flawed Coinbase charges
Visa said it has not made any systems changes that would result in duplicate transactions for cardholders.
Financial services company Visa has rebuffed claims made by popular cryptocurrency exchange Coinbase that it is to blame for “erroneous credit and debit charges” appearing on Coinbase users’ accounts and statements.
In a blog post update Thursday, Coinbase admitted that some customers may have experienced additional charges and/or refunds when purchasing digital currency with a credit or debit card via its online exchange.
“We are actively working with the card networks and processors to investigate these issues. Coinbase will ensure that each affected customer will be refunded in full for any erroneous charge,” Coinbase said.
Coinbase confirmed that any incorrect charges will be refunded “over the next few days”.
However, shortly after posting the update, Coinbase said that it was not to blame for the mistaken charges.
2/ Over the last few months, large banks and card issuers requested that card networks change the MCC for purchases of digital currency. Visa changed the MCC for digital currency purchases to a code that allows large banks and card issuers to charge consumers additional fees.
— Coinbase (@coinbase) February 16, 2018
In a statement to the Financial Times, a Visa spokesperson denied any wrongdoing and said that the company “has not made any systems changes that would result in the duplicate transactions cardholders are reporting”.
“We are also not aware of any other merchants who are experiencing this issue,” the Visa spokesperson said.
Visa will work with intermediary banks to “ensure cardholders are protected from unauthorized transactions”.
Earlier this month, Coinbase warned customers that, due to recent changes to the Merchant Category Code (MCC), credit card companies now have the ability to charge additional cash advance fees on crypto purchases.
The exchange is also preventing users from adding new credit cards for payments. The decision was made because Coinbase “cannot ensure customers will have a positive purchasing experience with a credit card”.
Recently, Coinbase users have taken to social media to vent their frustrations after incurring additional charges, unwarranted refunds, missing wire transfers, delayed transactions and unauthorized withdrawals.
Complaints have been intensifying on a Reddit page dedicated to discussing exchange activities.
For example, Reddit user MrDodgers suggested that “Coinbase is behaving fraudulently and/or dangerously” and that app stores such as “Apple and Google would and should delist this app for the protection of users”.
According to its website, Coinbase boasts more than 10 million users. However, data compiled by Altana Digital Currency Fund co-founder Alistair Milne suggests that at the beginning of November 2017, Coinbase had over 13.3 million users, up 182% from just 4.7 million one year earlier. Given the recent explosion of enthusiasm in the cryptocurrency market in the last few months, these figures may be significantly higher in early 2018.
Earlier this week, Coinbase introduced a crypto payment option for merchants. Coinbase Commerce works in a similar way to the PayPal plugin, allowing for virtual currencies to be integrated as electronic payments.
The exchange also distributed end of year tax documents to a number of customers in the United States.
In January, Visa’s chief executive Alfred Kelly said the digital currency market was “still evolving” and that cryptocurrencies, such as bitcoin, were not considered an acceptable form of payment. Additionally, several prepaid crypto debit card providers had their services suspended by Visa at the beginning of this year.
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