On Friday, several of the most popular Bitcoin debit cards—basically prepaid cards, topped up with cryptocurrency—stopped working in Europe after Visa Europe terminated services for WaveCrest, a prepaid card issuer.
Prepaid cards are an important way for people to use Bitcoin to pay for things, even if the retailer doesn’t accept cryptocurrency. Customers deposit their Bitcoin into an account with the Bitcoin debit card company, and the company converts it into fiat money—payments with these cards are processed by established players like Mastercard and Visa.
After Visa Europe’s decision regarding WaveCrest on Friday, Bitcoin debit card companies Bitwala, BitPay, Cryptopay, and others announced on Twitter that cards in Europe would stop working effective immediately, and customer funds will be returned.
With high fees and slow confirmation times already putting a damper on the use of Bitcoin for small purchases, the loss of prepaid cards in Europe is yet another hit to Bitcoin’s potential future as a currency. However, much to the chagrin of Bitcoiners, it’s one imposed by an established financial player instead of technical limitations.
It’s unclear why Visa terminated WaveCrest’s services, but Daily Beast reporter Joseph Cox reported on Twitter that Visa’s reason was non-compliance with membership regulations. A Visa Europe spokesperson was not immediately available for comment.
“We have already notified our partners and cardholders of Visa's requirement to close these accounts and our first priority is to ensure the safe and timely return of all funds,” Brent Almeida, CEO of WaveCrest, told Motherboard in an emailed statement. “We deeply regret the inconvenience that this has caused to all of our customers affected by this decision.”
Bitpay stated that its cards in the US will still work. WaveCrest’s website states that cards in the US are issued by MetaBank, and in Canada by Home Trust, under licenses from Mastercard and Visa. BitPay announced in a subsequent statement that the company is already in talks with alternate card issuers in Europe.
For now though, in Europe, it looks like the dream of using Bitcoin to pay for groceries or clothing—instead of holding on to it as an investment like a brick of gold—has hit a pretty big bump in the road.