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Bitmama Pauses Virtual MasterCard Services

November 29, 2024

Bitmama pauses virtual MasterCard services following issues with the card provider. The crypto company said it had paused its partnership with the provider to protect its users. It said all card balances will be refunded to the Bitmama wallet.

Bitmama now joins a growing list of fintechs that have paused or suspended card services. In September this year, Nigerian investment startup Rise discontinued virtual card services on its platform due to fluctuating exchange rates and provider issues.

Similarly, Bitmama told users in an email that “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.”

Carbon

Carbon also took the same step in June 2024, to protect itself and its customers, making it the first fintech to publicly announce suspending card services this year.

Carbon’s Co-founder and CEO, Ngozi Dozie, hinted that launching debit cards made Carbon unlucky. He said most people already have debit cards and many founders make decisions with little information.

When Carbon launched debit cards in 2021, it described it as a “big step in the company’s transition from being Nigeria’s biggest digital lender to a microfinance bank licensed by the CBN.”

While some fintechs blame card provider issues as the reason they are ending card services, Adedeji Olowe, CEO of Lendsqr says “the reason anybody would be doing that is that cost is high and the revenue opportunity is hard.”

Union54

However, Union54, a major virtual card provider for most fintechs stopped its services in 2022 following increasing cases of chargeback fraud.

The issues with card service in Africa now seem to range from fluctuation of exchange rates and chargeback fraud.

For fintechs like Chipper Cash, it is declined transactions due to insufficient funds. The startup had to announce that it would begin charging a ₦‎500 non-refundable fee for transactions declined due to insufficient funds.

For a company like Bitmama, its card service is one major feature that sets it apart from other crypto companies. The startup which encourages using crypto beyond trading would probably need to come up with creative ways to keep customers.

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