Xapo Faces Backlash Over Bitcoin Debit Card Fee Disclosure
California-based bitcoin wallet provider Xapo is facing community backlash following the release of its latest product, the Xapo Debit Card.
Xapo started shipping the cards on 30th July, roughly one month after its original estimated launch date. Yet the news has largely been overshadowed by the company’s recently published fees and limits schedule.
The schedule eventually found its way to reddit, evoking a strong response from customers who were upset to find the product would be more expensive than they originally believed.
Bitcoiner uproar over hefty fees
When it announced the card, Xapo promised a $15 one-time shipping and handling fee, but the company did not reveal any information on other associated costs.
The fee schedule, however, revealed the following card charges:
- A monthly service fee of $4.95, or £3.95/€3.95 for European customers
- An international ATM transaction surcharge
- Declined transactions costs of $1, or £1/€1
- Domestic ATM transaction costs of $3.50 per transaction, or £2.50/€2.50 in Europe.
The company did not release a fee schedule prior to launch. However, it suggested costs would be limited to a one-time charge of $15. On its FAQ page, the company said that the initial fee covers the cost of issuing and shipping the card.
“Merchants will pay all fees just as they do for debit and credit cards but there won’t be a fee for the customer,” Xapo stated.
Unfortunately, the ambiguous wording of Xapo’s statements led many customers to conclude there would be no additional fees for using the card, an opinion evidenced by the strongly negative response to the company’s update.
Failure to communicate
A potential driver of the strong consumer backlash was that the release of additional pricing information came after many users had already signed up to receive the card.
The result was that a number of separate reddit conversations arose to address the topic, with individual posts highlighting the card’s specific pricing policies and availability eventually giving way to more general posts criticizing the company’s overall marketing of the product.
Further, message board comments ran the gamut from overwhelmingly negative to sympathetic, with a small number of users noting that Xapo’s final product was likely influenced by poor US regulation and the difficulties inherent in the company’s bid to acquire a traditional financial partner to support the offering.
Xapo’s Debit Card has been a source of strain for the company since its initial announcement.
At the time of the launch, Xapo had indicated to news sources including TechCrunch and CoinDesk that MasterCard’s payment network would supply the rails for the debit card transactions.
MasterCard quickly moved to separate itself from the offering, telling CoinDesk:
“MasterCard does not have a relationship with Xapo. There is no card program currently available.”
However, Xapo told CoinDesk that it had secured a partner for the card offering as of early July, and that the delays in the shipment were purely product-based.
A spokesperson for Xapo said on 3rd July:
“We took a bit of extra time with early testing to make sure the experience is as smooth as possible for our customers.”
CoinDesk has reached out to Xapo for comment, but at press time, the company had declined to comment on the situation. However, Xapo is expected to publish a blog post addressing the controversy.
Image via Xapo