You may have heard about how XAPO is charging excessive previously undisclosed fees on their Xapo Debit Card, but what you may not know is that they will reimburse you for the third-party monthly fees, in Bitcoin! Though, aside from the $15 shipping fees, XAPO included a few other hidden fees they consider to be “customary fees just as with any other debit card.”
XAPO has been under a lot of PR stress lately as they released the fee schedule from their debit card supplier. On August 4th, XAPO posted an update on their news feed which stated that not only are the third-party card supplier’s monthly fees reimbursed, but that they will not ship to you if you’re in the USA or India. Due to financial regulations in those countries, if you’re in the USA or India, your XAPO debit card pre-order will have to wait for XAPO to find a legal way to distribute cards to your country before you’ll receive your card.
XAPO seems to be sealing its own fate with the newly introduced ATM fees and their program not being compatible with certain countries, but at least there won’t be any monthly fees. No one wants to pay monthly fees and not everyone plans on using an ATM with similar fees as that of a cryptocurrency exchange. People can still get their balance online, and many people have a smartphone to go online while mobile.
In the USA, I’ve never heard of a bank charging for a debit card replacement, but other companies might have that fee if someone steals your card. It seems more like a fee for the “pleasure” of being robbed. Now, if you lose your card, then the fee makes more ethical sense. The fee is just labeled “Card Replacement,” so it sounds like they charge it either way.
In case you missed the fee schedule from earlier in the week, here it is again.
In a support email, Fernando of XAPO stated the following:
To be clear, there is a one-time $15 fee we will collect when users complete the invitation process. This fee will be debited from your Xapo Wallet. There will not be monthly service fees associated with the card. In other words, if you simply do not use the card you will not be charged anything.
There [are], however, customary fees just as with any other debit card. [That] includes ATM withdrawal fees, replacing a card that was lost or for foreign currency conversion. Those customary fees would be charged to you as [a] user. Refer to the Fees & Limitations Schedule to see what they are (don’t forget that Monthly Service Fee will be reimbursed).
XAPO stated in an email to me that you will only charge a one-time fee of $15 and that any third-party fees from your payment processor will be refunded to the customer’s account as BTC. Will these fees be credited transparently or will they potentially hinder usage of the card until you credit them? When will the fees be credited to the account?
The Xapo Debit Card will charge a one-time fee of US$15 when the card is ordered by [the] customer. This amount will be debited from your Xapo Wallet in bitcoins. We do not, however, intend to charge monthly fees or fees for everyday spending.
Xapo will reimburse users for any monthly service fees charged by our third party service provider, directly to their Bitcoin account. We are currently working through the details to make this as seamless as possible for our customers and will provide an update when more information is available.
Where does XAPO get the funding from to pay for these fees for every last customer they have? If that is quite costly for XAPO, will XAPO eventually start charging fees to it’s customers for their services in order to be more like an expensive bank? If so, this will almost undoubtedly result in many customers closing their accounts as one of the main goals of Bitcoin is to get away from excessive fees. XAPO is an expendable convenience.
We believe that [six] billion unbanked people worldwide deserve and will eventually have access to basic financial services because of bitcoin, in part because transactions using bitcoin are less expensive than existing methods.
Nevertheless, while bitcoin payments are virtually free, card programs are not. We are willing to cover a large portion of the expenses of the debit card program because we view the debit card not just as a key feature for our users but one that will help [broaden] adoption of bitcoin. Our card program bridges traditional merchants (that do not touch bitcoin) with Xapo users.
In what country is XAPO located? Does it treat international accounts any different than domestic accounts? Are fees different for international and domestic accounts?
Xapo is headquartered in Palo Alto, California and incorporated in Hong Kong.
The card will be denominated in US Dollars, Euros or British Pounds when issued. Similarly to using your local debit card when traveling abroad, purchases made in a different currency will be subject to an additional 3% Foreign Exchange fee.
We have worked hard on providing a way for users to conveniently transact with bitcoin and will continue to work towards this goal while complying with all levels of local and international regulations.
How do you feel about XAPO? Do you own a XAPO card or is yours on pre-order? Leave a comment below or discuss this in the CCN forums and let me know what you think.
Disclosure: I own an account with XAPO and I have a pre-ordered debit card, but I’m in the USA, so who knows how long it will take for me to get my card…
Last modified: August 7, 2014 17:56 UTC