Coinbase Accounts Hit With Numerous Duplicate Charges
Coinbase, the largest U.S.-based cryptocurrency exchange, has reportedly been charging its users multiple times for a single card-based purchase. Notably, some customers said that their cards were hit with up to 50 duplicate charges. In response, Coinbase has stated that it will be issuing refunds to the accounts affected by these “erroneous” charges.
According to the popular exchange, which has well over 13 million users, Visa is to blame for this mishap. Via its Twitter account, the company claimed that the payments technology service provider had been haphazardly “reversing and recharging transactions”. Unfortunately, refunds issued through credit or debit cards tend to take longer than Coinbase customers might be willing to wait. Furthermore, the exchange pointed out that Merchant Category Code (MCC) for cryptocurrency purchases had recently been changed by Visa. This could have caused an unexpected glitch in its payment network, according to Coinbase.
New Restrictions On Crypto-Related Purchases
The new MCC assigned to crypto purchases classifies them as “cash advances”. This change came just prior to large financial institutions such as Bank of America and JPMorgan banning credit cards from being used to buy digital currencies. The reason for this ban was that many credit card holders were abusing their cards by purchasing cryptocurrencies, which they hoped to pay off after making profits from their investments.
However, given the highly volatile nature of the cryptocurrency market, there’s no guarantee that investors will benefit from their investments. In fact, many authorities worldwide have issued numerous warnings about potentially losing your entire investment in the risky crypto-market.
Visa Says It’s Not At Fault
Interestingly, after Coinbase accused Visa for the numerous “erroneous charges”, the payments technology company said that it was not at fault. In a statement first published on CNET, Visa asserted that the duplicated charges were not caused by changes to its payment network. Additionally, the company said that it hadn’t received any complaints from other merchants regarding its services. In order to help resolve this issue, the payments processor said that “We are reaching out to this merchant’s acquiring financial institution to offer assistance and to ensure cardholders are protected from unauthorized transactions”.
Meanwhile, Dan Romero, General Manager at Coinbase, stated that his company was working cooperatively with Visa so that affected customers would be promptly refunded. The exchange will also be requesting its users to review their bank statements and report any questionable charges. Probably in an attempt to retain more customers, the digital currency exchange tweeted that it’s “actively working with major card networks to create a new MCC for digital currency purchases. For the benefit of consumers, we hope that this will not have additional ‘cash advance’ fees”.
A Better Solution
The whole process of purchasing cryptocurrencies using credit or debit cards has become very confusing. Different statements from Visa and Coinbase regarding what caused the duplicate charges is not the only concerning part. Large banks have complicated the issue even more by banning crypto purchases using credit cards altogether. Although their reasons for doing so are understandable, it would help if mainstream financial companies all agree to work together to develop a more consistent and viable solution. One which would simplify the process of buying cryptocurrencies as much as possible.