Cryptocurrency Payment Cards Face Major Decline: Is the Era of Crypto U-Cards Over?
The once booming business of cryptocurrency payment cards (U-Cards) is now facing a contraction. On June 17, Christine, co-founder of Infini, announced on X that the company would cease its consumer-facing U-Card business, detailing the reasons behind this decision: high compliance costs, thin profit margins, and heavy operational burdens.
She admitted that the to-C consumer card business consumed 99% of the company’s time and resources but contributed almost no revenue. This announcement marks Infini’s strategic withdrawal from the to-C card business, shifting its focus to wealth management and B2B services. However, just 1-2 years ago, U-Cards were considered a groundbreaking innovation combining cryptocurrency with traditional finance. By allowing direct consumption with stablecoins like USDT and USDC, U-Cards quickly attracted users from the crypto community; at that time, ChatGPT was also just emerging, and many wanted to try subscription services. However, due to the lack of overseas bank cards for payment, U-Cards became a new payment channel amid the AI craze.
Cash withdrawal and ChatGPT represent the crypto community’s desire for secure channels and the activation of new payment scenarios, respectively. Yet, as the industry evolves, it appears that neither of these needs is essential for U-Cards. With more U-Card projects collapsing, the difficulties of this business become increasingly apparent.
Not an Isolated Case
Infini’s exit is not an isolated event. Numerous examples of U-Card businesses partially or completely shutting down can be found in publicly available information, with some typical cases including:
- In September 2024, OneKey announced it would stop new registrations and top-up functions, officially ceasing its U-Card services on January 31, 2025. Although the official reason was not detailed, industry speculation suggests it relates to disruptions with upstream payment service providers or compliance pressures;
- In December 2023, Binance terminated its card services in the European Economic Area and ended collaborations in parts of Latin America and the Middle East in August 2023. This adjustment is believed to be a response to tightening regional regulations;
- Tracing back to 2018, Visa, one of the largest payment networks globally, terminated its partnership with WaveCrest due to compliance issues. WaveCrest was an intermediary responsible for issuing and processing payments for crypto payment cards, connecting U-Cards to the Visa network. Visa’s abrupt withdrawal directly led to WaveCrest’s inability to continue serving its clients, including U-Card providers like Bitwala and Cryptopay.
These cases point to a systemic challenge facing U-Card businesses worldwide.
Out-of-Control Upstream and High Costs
From the perspective of ordinary users, U-Cards are very simple products—what you see is what you get, ready to use; the only factors to weigh and compare are fees and wear-and-tear. However, from the perspective of U-Card providers, the root of the problem lies in its complex upstream and downstream logic and high cost pressures.
First, the operation of U-Cards relies on multi-party collaboration: users top up with stablecoins like USDT, card providers (like Infini) convert them into fiat through off-ramps, and payment networks (like Visa, Mastercard) settle with issuing institutions and banks. However, the upstream part—especially payment networks and banks—lies outside the control of the crypto community. This makes U-Cards a “vassal” of the traditional financial system, with weak bargaining power.
But why are there so many different brands of U-Cards? Exchanges issue cards, wallets issue cards, and payment startups issue cards… Can anyone issue a crypto payment card? When users see a card branded with a particular cryptocurrency exchange and flaunting the VISA logo, what remains unknown is the collaborative model between the issuer and the technology provider.
For example, the Coinbase VISA card was previously supported by the technology provider Marqeta, enabling it to issue crypto debit cards and provide users with instant transaction authorization and fund conversion services. Moreover, due to the role of “technology providers,” the issuance process for crypto payment cards becomes relatively simple.
Technology providers offer a kind of “card issuance as a service” capability: they provide necessary security technologies, payment processing systems, and user interfaces to organizations that need to issue cards, supporting crypto card issuance, currency conversion, and payments. The issuing parties only need to call the technology provider’s API or SaaS solutions to issue and manage crypto credit/debit cards.
At the same time, the technology provider’s “card issuance as a service” also includes various functions such as transaction authorization, fund conversion, transaction monitoring, and risk management, helping issuers simplify operations and improve efficiency. In other words, the U-Card in your hand is actually the result of collaboration among issuers, technology providers, banks, and payment networks.
This also means that every party in the issuance chain has a profit motive. Everyone wants a piece of the pie, while the downstream projects and brands in the entire chain can obviously gain very little. The income from U-Cards primarily comes from transaction fees, but the 1-3% fees charged by payment networks, additional costs of stablecoin conversions, and bank account maintenance fees quickly erode the profits of this business.
Revenue struggles to offset costs, but the more troublesome issue is that fixed costs cannot be eliminated. Supporting U-Card operations is no easy task. Technical maintenance requires immediate transaction processing and security assurance, and customer support must handle refund and consultation requests—such as Infini’s promised 10-business-day refund arrangement, which also requires a considerable amount of human support and response.
On the user side, individuals may encounter issues due to various payment scenarios, but U-Card projects must address these personalized issues; moreover, due to the long upstream chain, when technology providers or card organizations encounter problems leading to service interruptions or anomalies, they often find themselves caught in the crossfire.
Compliance Risks
Additionally, the survival of U-Cards faces stringent compliance requirements. KYC (Know Your Customer) and AML (Anti-Money Laundering) are basic thresholds, and doing business in North America and Europe further intensifies requirements with U.S. FinCEN registration and EU MiCA regulations. USDT itself is also a favored asset in gray markets (like money laundering), which inherently necessitates that U-Cards invest more energy into managing risk control issues.
Moreover, more aggressively, when U-Card companies operate under the model of “overseas registration, employees working domestically,” the unique nature of the crypto industry within the country makes this business more prone to certain legal risks.
Recently, there have been reports on social media about the shutdown of certain U-Card businesses. While we cannot ascertain the authenticity or specific details of these incidents, one thing is certain: the effort required for U-Card businesses to comply with local regulations, along with risks arising from other factors, far exceeds that of many on-chain businesses. Sometimes, it may not necessarily be the card itself that poses problems; the funds involved, the users, and the relatively tightening public opinion environment can all cast a shadow over the brand and perception of U-Card businesses.
Labor-intensive and unprofitable, this might be a common dilemma faced by most U-Card projects attempting to enter the payment field. Currently, U-Card businesses may be more suitable for centralized exchanges (CEX). CEX does not rely on U-Cards for profit and income; when trading businesses can generate sufficient profits, using U-Cards for customer loyalty management and as a differentiated brand service is a better choice.
For example, Bybit and Bitget still have corresponding U-Cards, while Coinbase recently announced at the State of Crypto summit that it will launch the Coinbase One Card in the fall of 2025, allowing users to earn up to 4% Bitcoin cashback on every purchase, with the card supported by the American Express network.
While everyone wants to issue cards, ultimately, who can succeed will be more about testing compliance resources and risk control capabilities. From the current situation, the U-Card business is gradually moving towards oligopoly.
From Vassal to Independence
On one side, crypto businesses are hindered in traditional operations; on the other, traditional finance is increasingly engaging in crypto-related businesses. Whether it’s stablecoins, RWA, or the recent surge of publicly listed companies holding crypto assets, traditional finance is leveraging existing resources and compliance knowledge to profit from the crypto space.
Meanwhile, crypto businesses, aside from those that are crypto-native and revolve around trading and asset creation, increasingly feel constrained in their efforts to expand outward. The challenges faced by U-Card businesses reflect the awkward predicament of the entire crypto industry in its interactions with the traditional financial system. As a “vassal” of traditional finance, the crypto sector has never been able to take the initiative in the payments realm.
Perhaps reducing dependence on fiat conversions and initiating transactions directly from wallets, allowing on-chain settlements for transactions, and bypassing traditional payment networks for transfers is the original form of crypto technology. However, under the premises of compliance and embracing reality, this path appears overly idealistic.
If crypto businesses attempt to gain control over the industry chain—such as acquiring banks, payment channels, and technology providers—due to constraints in traditional operations, it may further inflate business costs, especially when it is uncertain how many users will actually use the cards.
Moreover, examining the contradictions reflected in U-Card businesses reveals not only issues in the payment field but also extends throughout the entire external development of the crypto industry. When innovation and momentum can only continue in the native soil of crypto, the grassroots and independent opportunities for crypto to break into mainstream markets have yet to arrive.