Author: Deep Tide TechFlow
The once-thriving crypto payment card (U card) business is now facing contraction.
On June 17, Infini co-founder Christine posted on X, announcing the cessation of consumer-facing crypto U card business while detailing the reasons behind it:
High compliance costs, thin profits, and heavy operational burdens.
She admitted that the to-C card business occupied 99% of the company's time and costs but contributed almost no revenue. This announcement also marks Infini's strategic withdrawal from the to-C card business, shifting focus to wealth management and B-end services.
However, 1-2 years ago, U cards were seen as a breakthrough innovation combining cryptocurrency and traditional finance.
By supporting stablecoins like USDT and USDC for direct consumption, U cards quickly attracted users within the crypto community; at that time, ChatGPT was just emerging, and many wanted to experience subscription services but were hindered by the lack of overseas bank cards for payment, making U cards a new payment channel in this AI craze.
Withdrawal and ChatGPT, the former represents the crypto community's desire for channel security, while the latter activates new payment scenarios.
Currently, it seems that as the industry develops, both of these demands do not have a strong need for U cards. With more and more U card projects collapsing, the difficulty of this business is becoming increasingly apparent.
Not an isolated case
The exit of Infini is not an isolated incident.
We can find numerous examples of U card businesses partially or completely shutting down from public information, with typical cases including:
In September 2024, OneKey announced the cessation of new registrations and recharge functions, officially discontinuing its U card service on January 31, 2025. Although the official explanation did not detail the reasons, industry speculation suggests it is related to the interruption by 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 seen as a response to tightening regional regulations.
Tracing back to 2018, one of the world's largest payment networks, Visa, terminated its partnership with WaveCrest due to compliance issues. The latter was a middleman providing card issuance and payment processing for crypto payment cards, responsible for integrating U cards into the Visa network. Visa's sudden exit directly led to WaveCrest's inability to continue servicing its clients, including U card providers like Bitwala and Cryptopay.
These cases point to a fact: the U card business faces systemic difficulties globally.
Loss of control upstream and high costs
From the perspective of ordinary users, U cards are a very simple product—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 doing U cards, 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 recharge stablecoins like USDT, card providers (like Infini) convert it to fiat currency through off-ramp withdrawals, while payment networks (like Visa, Mastercard) settle with issuers and banks.
However, the upstream links—especially payment networks and banks—are not under the control of the crypto space. This makes U cards a 'dependency' of the traditional financial system, with weak bargaining power.
But why can you see so many different brands of U cards?
Exchanges are issuing cards, wallets are issuing cards, payment startups are also issuing cards... Can anyone issue a crypto payment card?
When users see a card branded with a certain cryptocurrency exchange and bearing the VISA logo, what is not known behind it is actually the partnership model between the issuer and the technology provider.
For example, Coinbase's VISA card was previously supported by the technology provider Marqeta, enabling it to issue crypto debit cards and provide users with real-time transaction authorization and fund conversion services.
Furthermore, due to the existence of the 'technology provider' role, the issuance process of crypto payment cards has become relatively simple.
Technology providers offer a capability similar to 'card issuance as a service': by providing necessary security technology, payment processing systems, and user interfaces to organizations that need card issuance to support the issuance of crypto cards, currency conversion, and payments.
Issuers only need to call the API or SaaS solutions of technology providers to issue and manage crypto credit/debit cards.
At the same time, the 'card issuance as a service' provided by technology providers includes various functions such as transaction authorization, fund conversion, transaction monitoring, and risk management, helping issuers simplify operations and improve efficiency.
(For a clearer explanation, please refer to previous articles: (The Business Behind the Issuance of Crypto Payment Cards))
In other words, the U card in your hand is actually the result of cooperation among multiple parties: issuers, technology providers, banks, and payment networks.
At the same time, this also means that every party in the card issuance chain has a profit-seeking demand. Everyone wants to get a share, but the issuers and brand parties, relatively downstream in the entire chain, clearly have limited benefits to gain.
The revenue of U cards mainly comes from transaction fees, but the 1-3% fees charged by payment networks, additional costs for stablecoin conversion, and bank account maintenance fees will quickly consume the profits of this business.
Income cannot offset costs, and the more troubling issue is that fixed costs cannot be cut.
Supporting the operation of U cards is not an easy task. Technical maintenance requires real-time transaction processing and security assurance, while customer support must handle refund and inquiry requests—such as Infini's promised 10 working days refund arrangement, which also requires a calculation of the manpower support and response behind it.
On the user side, individuals may encounter problems due to various payment scenarios, but the project party of the U card business must handle these personalized issues; and due to the lengthy upstream chain, when technical providers or card organizations encounter problems causing service suspensions or anomalies, they often end up in a passive position.
Compliance risks
In addition, the survival of U cards also faces strict compliance requirements. KYC and AML (anti-money laundering) are basic thresholds, and doing business in North America and Europe further tightens the requirements with registrations from the US FinCEN and EU MiCA regulations.
USDT itself is also one of the assets favored by gray industries (such as money laundering), which naturally requires U cards to invest more effort into handling risk control issues.
Moreover, it is more radical when companies engaged in U card business operate under the model of 'overseas registration, employees working domestically,' as the uniqueness of the crypto industry in the domestic market makes this business more susceptible to certain legal risks.
Recently, there have been reports on social media about certain U card businesses being shut down. We cannot ascertain the truth or specific details of the events, but one thing is certain:
The efforts required for U card businesses to comply with local regulations and the risks brought about by other factors far exceed those of many on-chain businesses. Sometimes, it is not necessarily the card itself that is problematic; the funds involved, the users, and the relatively tightening public opinion environment can cast a shadow over the brand and perception of U card businesses.
Labor-intensive and thankless, worrying without profit—this may be the common predicament faced by most U card projects focused on the payment sector.
Currently, the U card business may be more suitable for CEXs. CEXs do not rely on U cards for profit and revenue; when trading businesses can generate sufficient profits, managing customer loyalty through U cards and treating them as a brand differentiation 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 back on each purchase, supported by the American Express network.
Everyone indeed wants to issue cards, but who ultimately succeeds depends more on compliance resources and risk control capabilities. From the current situation, the U card business is gradually moving towards oligopoly.
From dependency to independence
On one hand, the crypto industry faces obstacles in doing traditional business, while on the other hand, traditional finance continuously engages in crypto-related businesses has become a trend.
Whether it's stablecoins, RWA, or the recent surge in crypto asset reserves of US-listed companies, traditional finance has been leveraging existing resources and compliance accumulation to gain insights and profits within the crypto space.
In addition to crypto-native businesses centered around trading and asset creation on blockchain, the crypto space increasingly feels constrained when trying to gradually expand outward.
The difficulties of the U card business actually reflect the awkward position of the entire crypto industry in its interaction with the traditional financial system. As a 'dependency' of traditional finance, the crypto industry has never been able to grasp the initiative in the payment field.
Perhaps reducing dependence on fiat currency conversion, initiating transactions directly from wallets, and conducting transactions through on-chain settlement to bypass traditional payment networks for transfers is the original form of crypto technology, but under compliance and embracing reality, this path appears too idealistic.
If a company engaged in U card business tries to gain control over the industry chain by acquiring banks, payment channels, and technology providers due to constraints of doing traditional business, it is likely to further increase the cost of operations, especially when it is uncertain how many users will actually use the cards.
Furthermore, looking at the contradictions reflected in the U card business, they are not only present in the payment field but also pervade the extensive development within the entire crypto industry.
When innovation and enthusiasm can only continue in the native soil of crypto, the grassroots, independent opportunities for crypto to break out have still not arrived.
