Bitmama, one of African crypto companies, has paused its card service partnership with Mastercard due to unforeseen issues with the card service provider. The company further explained that the pause is necessary to protect its users.
The company has joined a growing list of financial companies that have paused or suspended card services on their platform. Notable companies and startups including Rise and Carbon Rise discontinued virtual card services on their platform due to fluctuating exchange rates and provider issues.
According to Lendsqr CEO Adedeji Olowe, the reason any business or company would suspend or stop card services on its platform is because the cost is high, and the revenue opportunity is limited.
However, Union54, a leading virtual card provider for many fintechs, discontinued its services in 2022 due to a surge in chargeback fraud cases.
In the Bitmama’s case, the company inform users via email that it’d need to discontinue its card services partnership with MasterCard. “Due to unforeseen issues with our MasterCard virtual card provider, we decided to pause our partnership with them. This wasn't an easy choice, but we knew it was the right one to protect you,” the crypto firm expresses in the email.
The company further explains that all cards balance will be refunded to users’ Bitmama wallets. Indeed, indefinite pausing of virtual card services on Bitmama is not an issue choice to make because card offerings is one major feature that sets company apart from other crypto firms in Africa.
The reasons behind card services issues in Africa are not limited to fluctuations of exchange (mostly happen in Nigeria) and chargeback fraud. Chipper Cash, one of the leading virtual dollar card providers in Nigeria, imposed a ₦500 non-refundable charge for transactions declined due to insufficient funds.
The company made this decision to address the issue of declined transactions caused by insufficient funds. These declined transactions likely resulted in operational costs or inefficiencies for Chipper Cash.
