Whenever a new service launches in the world of Bitcoin and digital currency, there is a mix of excitement and disappointment at the same time. Although the service offered by Cointocard sounds very appealing, there are serious doubts regarding its legitimacy. Moreover, the associated fees are ridiculously high, although they do not increase when higher amounts of funds are involved. All things considering, use this platform at your own risk, as it seems to be looking for some very sentivie financial information.
CointoCard Offers An Unusual Service
Any combination of Bitcoin with credit cards is very dangerous, as there are multiple security risks involved. Buying Bitcoin with a credit card is not all that easy – due to chargeback risks – and subject to thorough verification processes. Selling Bitcoin in exchange for credit card top-ups are not only expensive, but it is pretty much impossible to have this service offered by a third party provider.
Taking a look at the Cointocard website, the objective of this platform becomes evident pretty quickly. Although the company claims to accept Bitcoin payments in exchange for topping up one’s credit card, there is something fishy going on as well. Credit cards can not be topped up directly, as they are usually linked to bank account.
There is the exception of prepaid cards, which can be topped up from any bank account in the world, in some cases. However, doing so will still involve a bank transfer, rather than asking people for their credit card number and expiry date. Cointocard has no business knowing that sensitive financial information, and this is a clear attempt to steal card details from unsuspecting users.
Cointocard claims all transfers will take up to 72 hours to complete, but they will never be able to keep this promise as the top-up will never happen. Regular credit and debit cards can not be topped up, as they are linked to a bank account. Users can deposit funds to this account, but it will not matter for the credit card directly.
If Cointocard would have asked for the correct payment information to send these transfers, people might give the site a second glance. But it is clear the owner wants to steal bitcoins and obtain credit card information at the same time, by running a business model that is not possible. Bitcoin users should steer away from this company at all time as there is nothing to gain from using this service.
Despite all of that, plenty of people claim the service is completely legitimate, and users are advised to thread with caution. Read the author’s note below as to why there is a fair bit of concern regarding this service.
Note from the author: Apparently a lot of people are unsure as to why this service would not work. The principle is simple; topping up a credit card is not possible directly, as the only thing that can be done is send funds to the bank account linked to the credit card. Unless the credit card transaction made by the card owner is refunded directly, there is no way to “revert” a card balance upwards. Topping up the associated bank account is NOT the same as topping up a credit card, as the result of the card statement will be the same. Debit cards, on the other hand, can be topped up, as they use a prepaid balance. There is a significant difference between debit cards and credit cards, and website owners should advertise their service correctly.
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