Discover CEO Says There's a Reason Cardholders Can't Buy Bitcoin
Discover cardholders pose the question on Bitcoin forums: Do any cryptocurrency exchanges accept their cards?
(Bloomberg) -- Discover cardholders pose the question on Bitcoin forums every so often: Do any cryptocurrency exchanges accept their cards?
It turns out, Discover Financial Services isn’t interested in that market.
Financing purchases of virtual currencies creates headaches for banks that are required to monitor transactions for money laundering, Discover Chief Executive Officer David Nelms said Wednesday in a phone interview. Digital coins are attractive to criminals looking to hide illicit funds and to other people trying to evade the government’s eye.
“It’s crooks that are trying to get money out of China or wherever,” he said. “Or if someone steals our credit card numbers they’re going to ask for payments in Bitcoin. Those are the only use cases I’m actually seeing today.”
Credit card issuers have come down on all sides of the debate. Capital One Financial Corp. wrote on Twitter last week that it started declining purchases of cryptocurrencies “due to the elevated risks of fraud, loss and volatility.” Many other banks, however, do allow customers to buy digital coins with their Visa or Mastercard. And Discover might yet reconsider its stance if everyday cardholders push for it, said Nelms, 56. For now, at least, “it’s not like our customers are clamoring to use it,” he said.
Nelms commented after Discover said fourth-quarter profit fell 31 percent to $387 million, hurt by a $189 million charge related to tax reform. Adjusted earnings per share were $1.51. Analysts surveyed by Bloomberg had estimated $1.54.
To contact the reporter on this story: Jenny Surane in New York at jsurane4@bloomberg.net.
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David Scheer, Dan Reichl
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