Visa confirms Coinbase wasn’t at fault for overcharging users


Yesterday, we wrote that Coinbase customers were being charged multiple times for past transactions.

While some speculated that the erroneous withdraws were down to a Coinbase engineering issue, Coinbase issued a statement saying it wasn’t liable for the duplicate charges. The blame, instead, rested with Visa for the way it handled a migration of merchant categories for cryptocurrencies, Coinbase said.

While you can read my post yesterday for an in-depth description of what happened, the basic gist is that Visa refunded and recharged (under a different merchant category) a month of old transactions. Many users saw the recharge come through before the refund processed, making it look like they were double charged. Honestly, the issue was likely exacerbated by existing payment rails — it’s normal for refunds to take multiple days to show up on credit and debit statements.

But here’s where it gets weird — this morning Visa issued a statement to some publications shifting the blame back to Coinbase, telling TNW that “Visa has not made any systems changes that would result in the duplicate transactions cardholders are reporting.” We are also not aware of any other merchants who are experiencing this issue.”

But now it seems that the payment giant has revised its stance, and clarified that it wasn’t Coinbase’s fault.

The following is a joint statement from Visa and Worldpay, which is Coinbase’s payment processor partner. While Coinbase initially distributed the statement on its own blog, we’ve also received the statement directly from Visa.

Over the last two days, some customers who used a credit or debit card at Coinbase may have seen duplicate transactions posted to their cardholder accounts.

This issue was not caused by Coinbase.

Worldpay and Coinbase have been working with Visa and Visa issuing banks to ensure that the duplicate transactions have been reversed and appropriate credits have been posted to cardholder accounts. All reversal transactions have now been issued, and should appear on customers’ credit card and debit card accounts within the next few days. We believe the majority of these reversals have already posted to accounts. If you continue to have problems with your credit or debit card account after this reversal period, including issues relating to card fees or charges, we encourage you to contact your card issuing bank.

We deeply regret any inconvenience this may have caused customers.

While the statement doesn’t give a ton of clarity on the issue, it seems to absolve Coinbase of any blame, which is a win for the startup considering it’s been trying to prove to the world that its engineering and customer service teams can stand up to the challenge of maintaining a reliable financial platform.

Indeed, Coinbase CEO Brian Armstrong hit out at media reports that initially placed the blame for the snafu on Coinbase.

The startup — is valued at $1.6 billion after raising $100 million last year — has endured some challenging periods as it continues to scale its service to accommodate its 10 million-plus registered customers.

Issues over the past year have included muddling prices on Overstock.com, a flash crash, and a general struggle to keep up as cryptocurrencies boomed in 2017. In December, Coinbase launched an internal investigation into suggestions that company insiders profited from knowledge of impending support for Bitcoin Cash.

Note: The author owns a small amount of cryptocurrency.

Jon Russell contributed to this story. He also owns a small amount of cryptocurrency.

Featured Image: Håkan Dahlström Photography/Flickr UNDER A CC BY 2.0 LICENSE

Chat app Line announces plan for cryptocurrency services, loans and insurance


Line, the messaging app with around 200 million monthly users, is embracing bitcoin and other cryptocurrencies to fend off increased competition from Facebook and others.

The Japanese company told announced the creation of a new financial services division which will spearhead a move into cryptocurrencies and other services including loans and insurance. Line already operates a payment service — which claims 40 million users $4 billion in annual GMV — but now it plans to do much more.

Line said it has applied for a cryptocurrency license in Japan — where more than a dozen exchange and other businesses have been approved — which is currently under review.

Bloomberg reported earlier this month that Line was considering a move into crypto, but at this point it isn’t clear exactly what that will entail. From the announcement, Line said it will operate a marketplace inside its app where people can trade crypto and get loans or insurance. It said, too, that it will look into how it can use blockchain technology within its services.

Loans and insurance, while not as attention-grabbing a crypto, may prove to be lucrative ventures in markets where Line has strong recognition among consumers.

The company is need of something fresh to revitalize its business in the wake of increasing competition from Facebook, which operates WhatsApp and Messenger, the world’s most popular messaging apps with over one billion monthly users each.

Prior its $1.1 billion U.S.-Japan IPO in 2016, Line had targeted a global audience via its messaging service — which pioneered the concept of stickers — and a connected games business. Its international expansion didn’t go according to plan, however, and the company refocused efforts on its four core markets of Japan, Thailand, Taiwan and Indonesia, which account for 168 million of its active users.

In those markets, it offers a range of localized services that include a video streaming, manga cartoons, shopping, ride-hailing and other on-demand services. Last year, it began to sell smart hardware and AI to offer its own cartoony alternative to Amazon’s Echo range and Google Home devices. In some markets, it also offers a Line-branded mobile phone/data service.

There’s plenty of pressure, however. Facebook’s global popularity makes Messenger an option for most internet users on the planet while the company is busy in other areas. WhatsApp recently moved into business solutions that allow companies to correspond with users via its service, and it is tipped to move into payments soon. CEO Mark Zuckerberg has also pledged to look into whether Facebook can make use of blockchain technology.

Line will hope these new services can boost its business in its strongest markets and pick up new users in other countries.

Line might well be the largest consumer-focused business to adopt crypto to date. It is far from the only chat app, though. Kik raised $100 million in an ICO earlier this year, while there are also newer blockchain-based solutions such as Status. Then there’s Telegram, a chat app that has over 150 million users that is popular among the crypto community, which is planning a much-anticipated ICO that could raise upwards of $1.2 billion.

Line’s announcement comes as the price of bitcoin dropped below $10,000 for the first time since the end of November, according to Coindesk’s price tracking service.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.