It turns out that the card issuer Visa is actually the culprit in Coinbase’s increasingly chaotic customer support nightmare that has seen many users’ crypto-accounts subjected to reverse transactions, unauthorized withdrawals, and other unjustified fees. The issue began gaining traction in online crypto communities earlier this month, and Coinbase first responded last week by noting a change in how credit card companies classify digital currency transactions. The company said at the time that it had come up with a solution.
late on friday, Coinbase revealed on Twitter It was Visa that actually reversed several weeks of old transactions under the so-called new merchant class code, or MCC, which is used to categorize a business or purchase by the type of service it provides and helps determine how the internal revenue service deals with appropriate taxes for such purchases. According to Coinbase, Visa has turned into a MCC that “allows major banks and card issuers to charge consumers additional fees,” resulting in what effectively looked like false fees. However, Visa says this is not true.
3/ Coinbase is actively working with major card networks to create a new currency center for crypto purchases. For the benefit of consumers, we hope this does not have an additional “cash advance” fee. Cards provide broader access to digital currency than just bank accounts.
– Coinbase (coinbase) February 16, 2018
“Visa policies have not changed regarding the correct coding of transactions. Cryptocurrency transactions must be properly encoded so that issuers can rely on accurate and consistent information when making authorization decisions. We recently sent a letter to customers explaining the current requirements, but no There have been no changes or reclassifications. It is not accurate to say that Visa recently made changes to the MCC code.”
Visa later issued a second joint statement with payments processor Worldpay, which handles Coinbase transactions, writing in no uncertain terms, “This issue was not caused by Coinbase.” The nature of the Coinbase and Visa dispute here remains unclear. However, Coinbase is trying to reassure customers that this will not happen again in the future, but it does not appear that there is a long-term fix yet to be implemented. “Coinbase is actively working with major card networks to create a new MCC for cryptocurrency purchases,” Coinbase wrote. “For the benefit of consumers, we hope this does not have an additional ‘cash advance’ fee. Cards provide broader access to digital currency than just bank accounts.”
There still seems to be a fair amount of blame game on both sides, however, Coinbase customers have been flooded with responses to the company’s tweets to say that funds are still tied up by banks and card issuers and all sides appear to be swaying users in a different direction. Visa says it’s working on refunds for customers, but the onus still falls on those whose accounts have been drained by this logistical fumble to follow up on the right party and figure out exactly what to do.
All in all, it’s not a great look for either Coinbase, Visa, or traditional banks, none of which seem to work very well together when it comes to dealing with cryptocurrencies.
Here’s the full Visa and Walrdpay statement:
Over the past couple of days, some customers who used a credit or debit card on Coinbase may have seen duplicate transactions posted to their cardholders’ accounts.
This problem was not caused by Coinbase.
Worldpay and Coinbase work with Visa and Visa issuing banks to ensure that duplicate transactions are reversed and appropriate credits are posted to the cardholder’s accounts. All rollback transactions have now been issued, and should appear in customers’ credit and debit card accounts within the next few days. We believe the majority of these pullbacks have already been posted to the accounts. If you continue to have issues with your credit or debit card account after this cancellation period, including issues with card fees or charges, we encourage you to contact the bank that issued your card.
We deeply regret any inconvenience this may cause to customers.
Update at 3:03PM ET, 2/18: Explain that Visa says it has not made changes to the Merchant Customer Code (MCC). Instead, the company said it had “sent a letter to clients explaining current requirements,” and that there had been no changes or reclassifications with respect to MCC.