Big changes are coming to cryptocurrency-based debit cards. These developments are not positive for anyone living outside of the EU, as it appears obtaining such cards in other countries will be extremely difficult. Both Xapo and Shakepay have been asked to halt their services to non-EU residents. Users in regions outside of the EU will soon see their accounts deactivated and their cards becoming unusable. All of this is thanks to Visa forcing the hand of card issuers and service providers.
Bad New for Shakepay and Xapo
The concept of a cryptocurrency debit card has always been met with a fair amount of confusion and hesitation. Such a debit card is not a pure way of spending cryptocurrency, even though there is a lot of potential in this technology. Spending cryptocurrency using a debit card is admittedly a convenient solution, especially when considering that so many countries around the world have thousands of retailers accepting card payments. Direct cryptocurrency acceptance, on the other hand, is still lackluster at this stage.
Both Xapo and Shakepay are two established brands in the world of cryptocurrency debit cards. These two companies have made quite a name for themselves and serve customers on an international basis. Unfortunately, it seems some of their efforts will come to an end in the very near future. A new directive issued by Visa effectively forces these companies to halt their services to customers outside the EU. These debit cards obviously are far from a perfect solution.
It appears Visa has communicated with different debit card service providers all over the world. Its message is pretty clear: it does not want companies to provide services outside of the European Union for the foreseeable future. This decision will also affect companies outside of the cryptocurrency industry as well. Only customers within the EU can order new debit cards from this point forward and existing customer accounts from outside of the EU will be closed in the near future.
Right now, the deadline to suspend these services and associated cards is October 15, 2017. That means customers of both Xapo and Shakepay have until that date to use their cryptocurrency debit cards before they become invalid. While this is a very troublesome development that will make a lot of people unhappy, there is nothing else to do but play by Visa’s rules right now. After all, as the card issuer, it makes the rules for all other companies. It is highly likely some alternatives will be found, but for now, there has been no official confirmation just yet.
Ever since cryptocurrency debit cards were introduced, customers from specific regions have been unable to access them. This is especially true where the U.S. is concerned, as it has been one of the no-go regions for cryptocurrency debit cards for as long as most people can remember. The new directive by Visa will only make it more difficult for debit card service providers to enter non-European markets in the future. All new customers of both Shakepay and Xapo within the EU will need to provide proof of residency without exception.
All of this goes to show that more convenient spending solutions need to be developed for cryptocurrency sooner rather than later. Debit cards are great for people living in the EU, but for the rest of the world they are anything but accessible. It will be interesting to see if any other debit card service provider will issue a statement regarding this new Visa guideline in the near future. There are quite a few competing companies in this space, to say the least. Some companies issue both Visa and MasterCard-branded products, which means they have at least an alternative at their disposal for now.