Credit card users, who also appear to be cryptocurrency devotees, may not be having the best time of their lives. As recently a range of American and British banks announced the clampdown on the purchase of cyber assets with credit cards, the other troubling news has appeared. Among them, there are Citigroup, J.P. Morgan Chase, Bank of America, UK’s Lloyds, as well as Virgin Money, which joined the list recently.
According to CCN, now the customers of the California-based digital currency venue Coinbase will have to pay cash equivalence dues. These fees will be charged by particular credit card firms. And the change has come with a few adjustments in the Merchant Category Codes.
No More Free Purchases
In an email by Coinbase team, sent to one of its users and published by CCN, the exchange representatives appear to inform its clients about the following:
“Recently, the MCC code for digital currency purchases was changed by a number of the major credit card networks. The new code will allow banks and cards issuers to charge additional “cash advance” fees.”
At the same time, the team emphasized that it is not the crypto bourse which will charge the dues but the companies, whose credit cards people are using. These fees will be listed separately in clients’ card statement. However, the representatives added, they do not know which exactly credit card issuers will charge these fees.
What is MCC?
MCC stands for a Merchant Category Code – a four-digit number used to categorize various types of business depending on the services or commodities they offer. This number is appointed to negotiants by credit card issuer. And this happens when the business commences accepting these cards. In the US MCC is essential, as it defines whether the company has to report the regulators about tax issues.
What Are Cash Equivalence Dues?
Apparently, cash-equivalent fees appear when it comes to the related type of transactions. In accordance with Chron, such fees are charged for operations, where one uses a credit card to buy something that can be cashed out. For example, customers will have to pay these dues if they but casino chips, lottery tickets foreign currency, or stuff like that. As we can see, card issuers have swollen the range of these instruments with cyber assets.
How it will affect the crypto market, the time will tell. But what is clear is that both governments and financial institutions are tackling on cryptos.