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Crypto Card Bans Results Mastercard Q1 Volume to Drop

The bank was among several others that restricted purchase of cryptocurrencies with credit cards. It says the decision led to a drop in their cross-border payment volume in the first quarter of 2017.

A drop in crypto wallet funding has caused Mastercard cross-border payments volume to go down by 2 percent in the first quarter of 2018 compared to the last quarter of 2017. This is despite the volume going up by 19 percent in the first quarter of this year, overall.

Mastercard‘s chief financial officer Martina Hund-Mejean said Wednesday during an earnings call that the company’s crypto wallet funding was 1 percent in the last quarter of 2017 same as the first quarter of 2018.

She said,

“What the issue is that a number of the banks have decided, in particular in the United States. However, that they would not allow the usage of cards for this particular funding vehicle. And that’s why we have already seen a relatively significant decrease of the volume related to that event”.

The company’s chief executive officer Ajay Banga said the decline resulted also in new restrictions and uncertainty around exchanges.

Mastercard also says the interest levels are also down this quarter of the year than in the last quarter of 2017.

The company says it will not count cryptocurrencies in its earnings projection. It is because they “just don’t know how to predict it” or that they “don’t even want to count it”.

The bank was among others such as JPMorgan Chase, Bank of America, Bank of Montreal, Capital One and Citi from the U.S. and Canada to bar crypto purchases with credit cards. The banks said allowing these purchases caused credit risk as a result of volatility.

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David

David Kariuki is a journalist who has a wide range of experience reporting about modern technology solutions including cryptocurrencies. A graduate of Kenya's Moi University, he also writes for Hypergrid Business, Cryptomorrow, and Cleanleap, and has previously worked for Resources Quarterly and Construction Review magazines.

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