What has happened?

As many of you are aware, we have had to interrupt our virtual prepaid card service. Physical cards have been active and functioning throughout. First of all, I’d like to give a little perspective as to why we decided to interrupt the service.

There are essentially three points:

• Banks’ shifting risk appetite and regulatory pressure
• Safety of users’ funds
• Planned upgrades that are easier when virtual cards aren’t live

On the first point, our US-based issuing bank partner informed us that there was particularly heavy attention being paid to both crypto-related enterprises and also with regards to KYC procedures.

This led us to consider the most important aspect of our service; our users. Our discussions led us to believe that we should act quickly and decisively to be 100% sure that our users’ balances would be safe. Anything below 100% is not acceptable.

So, we created the most efficient workflow we possibly could in order to issue refunds for outstanding balance on our users’ cards. This has already been executed by leveraging something we had already developed: sending crypto by email! This feature of FCF Pay will also be used in our app.

Once this decision had been taken, we realised that it would be a good moment to do some back-end and front-end improvements to the system, so that’s what we’re doing!

So far there have been three main questions:

• What happened? (answered above)
• When will the service be reinstated?
• Why did you refund users with USDT on Tron Network?

When will the service be reinstated?

Our initial estimate was 1-2 weeks. There is still a possibility that we could meet this goal, but we also want to add more options to the system to ensure this kind of interruption won’t happen again by further diversifying the offering. We also want to use this period of not having the virtual cards live to implement some very boring, but important software architecture changes that will help security for both FCF Pay and the app. If it takes longer than the initial estimate to reinstate that part of our services, it will be for this reason.

We feel grateful and humbled by the patience and messages of support that we have received from our users. The main complaint is that people are missing the service. You can’t miss something unless it was done well to start with!

Why USDT on Tron?

This has honestly been one of the few recurring complaints/comments. “Tron? Why?!”

Bear in mind that we have issued refunds for many customers and we wanted them to be reliably and quickly delivered to users’ wallets with as little loss as possible. For that, we need to keep gas fees to a minimum. Have you seen ERC20 gas fees?

Click to see the graph source

It couldn’t be anything with volatile fiat equivalent value as we were issuing refunds for something deposited in USD native currency, so that leaves stablecoins. Of all the stablecoins, USDT is the most widely used and accepted.

Anybody that has been watching the posts about the most popular cryptocurrencies on FCF Pay will have seen that USDT on Tron has been one of the most used since we started publishing this information.

What you may not have considered is that we have processes in the back end in order to consolidate incoming crypto into one currency and offramp it in order to fund the master balance with issuing banks’ from which both virtual and physical card refills happen. Working with slim margins from large volumes, gas fees can really eat into profits. Guess what we use that is also accepted by our partners… Yup!

USDT on the Tron Network is fast, with cheap gas fees and is very widely used for real-world financial transactions.

Honourable mention for BNB Chain

Bep20 actually would have been another sensible option. We actually decided against it due to the fact that so many users of the Ethereum chain are so adamantly against “BSC” due to the perceived lack of seriousness of tokens on the network.

I’m going to say it; this is irrational! BNB Chain is actually a very practical blockchain for day to day usage. The idea that it is just for scammers and “jeets” is one of the strangest phenomena in “crypto culture”.

A good analogy is that kitchen knives are still great as cutting implements for cooking, even if some have been used for murders.

I’ll probably publish a specific post about what I consider to be the irrational tribal behaviours in the crypto space and why I believe that speed and gas fees will be the main deciding factors of which blockchains will gain prominence once crypto payments truly hit mainstream usage.

Don’t forget to leave a comment below with your thoughts. It’s always great to hear your feedback.