Mastercard and Visa are reportedly set to classify cryptocurrency, initial coin offering (ICO), forex and binary as ‘high risk’ categories for transactions.
Finance Magnates reported that Mastercard will implement the changes from today. Furthermore, Visa is planning to make the move in December.
This classification may lead to execution of chargebacks up to 540 days post the actual transaction date.
Cryptocurrency high risk for transactions
The changes are expected to primarily impact brokers and companies from unregulated or loosely regulated jurisdictions.
In addition, Finance Magnates noted that certain brokers and exchanges have already stopped accepting credit card deposits. Moreover, payment processors suspend their alliance with some clients until a viable solution is established.
In May this year, Broker Complaint Registry said that Mastercard informed its payment processors regarding these changes via an email.
The trader community added: “According to the letter any high-risk business that operates without a license in their given jurisdiction will fall into a new category.
“Additional monitoring will be applied to any ‘high-risk securities merchant’ that uses Mastercard, Debit Mastercard and Maestro.”
Issuers will be allowed to execute transactions in areas where they have legal permit. Furthermore, they are required to provide evidence of legal authority for operating in a jurisdiction.
Broker Complaint Registry added: “Furthermore, the legal opinion must contain all pertinent trading rules and other laws related to credit or debit cardholders that may conduct transactions with the broker or the ICO.”