The once booming encryption payment card (U card) business is now facing a decline.

On June 17, Christine, the co-founder of Infini, posted on X, announcing the halt of its consumer-facing encryption U card business, while also elaborating on the reasons behind it:

Compliance costs are high, profits are slim, and operational burdens are heavy.

She admitted that the to C card business accounted for 99% of the company’s time and costs, yet it brought almost no revenue contribution. This announcement also marks Infini’s strategic withdrawal from the to C card business, shifting its focus to wealth management and B-end services.

But 1-2 years ago, the U card was seen as a breakthrough innovation in the integration of encryption and traditional finance.

By supporting stablecoins like USDT and USDC for direct consumption, the U Card quickly attracted users in the encryption community; at that time, ChatGPT had just emerged, and many people wanted to experience subscription services, but due to the lack of overseas bank cards for payment, the U Card also became a new payment channel in this AI craze.

Withdrawal and ChatGPT, the former represents the encryption circle’s desire for channel security, while the latter activates new payment scenarios.

However, from the current perspective, with the development of the industry, it seems that neither of these demands has a strong need for U cards. As more U card projects continue to collapse, the difficulty of this business becomes increasingly apparent.

not an isolated case

The exit of Infini is not an isolated event.

We can find numerous examples of the U-card business being partially or completely shut down from public information, with some typical cases being:

• In September 2024, OneKey announced the cessation of new registrations and recharge functions, and will officially discontinue its U Card service on January 31, 2025. Although the official reason has not been detailed, industry speculation suggests it may be related to disruptions from upstream payment service providers or compliance pressures.
• In December 2023, Binance terminated its card services in the European Economic Area and ended partnerships 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, Visa, one of the largest payment networks in the world, terminated its partnership with WaveCrest due to compliance issues. The latter is an intermediary that provides card issuance and payment processing for encryption 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 such as Bitwala and Cryptopay.

These cases point to a fact: the U-Card business faces systemic challenges globally.

Upstream loss of control and high costs

From the perspective of an ordinary user, the U card is a very simple product — what you see is what you get, and it is ready to use; the only considerations to weigh and compare are the rates and wear.

But from the perspective of making U cards, the root of the problem lies in its complex upstream and downstream logic and high cost pressure.

First, the operation of the U-card relies on multi-party collaboration: users recharge stablecoins such as USDT, the card provider (such as Infini) converts it to fiat currency through off-ramp cash out, and the payment networks (such as Visa, Mastercard) settle with the issuing institutions and banks.

However, the upstream links - especially the payment networks and banks - are not under the control of the encryption circle. This makes U Card a “vassal” 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 cryptocurrency payment card?

When users see a card branded with a certain cryptocurrency exchange and bearing the VISA logo, what is not known behind the scenes is the collaboration model between the issuing party and the technology provider.

For example, Coinbase’s VISA card was previously supported by the technology provider Marqeta, enabling it to issue encryption 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 encryption payment cards has become relatively simple.

Technology providers offer a capability similar to “card issuance as a service”: by providing the necessary security technology, payment processing systems, and user interfaces to organizations that need card issuance, to support encryption card issuance, currency conversion, and payments.

The issuer only needs to call the API or SaaS solution of the technology provider to issue and manage encryption credit/debit cards.

At the same time, the “Card Issuance as a Service” offered by technology providers includes various functions such as transaction authorization, fund conversion, transaction monitoring, and risk management, helping issuers streamline operations and improve efficiency.

(For a clearer explanation, please refer to previous articles: “}Competing to issue cards, the business behind encryption payment cards>)

In other words, the U card in your hand is actually the result of collaboration among multiple parties including the issuer, technology provider, bank, and payment network.

At the same time, this also means that every party in the card issuance chain has a profit motive. Everyone wants a share of the pie, but the card issuance projects and brands that are relatively downstream in the entire chain can obviously gain very little benefit from it.

The income from the U card mainly comes from transaction fees, but the 1-3% fees charged by the payment network, the additional costs of stablecoin conversion, and the bank account maintenance fees will quickly erode the profits of this business.

Revenue cannot cover costs, but the bigger problem is that fixed costs cannot be cut.

Supporting the operation of U Card is not an easy task. Technical maintenance requires real-time processing of transactions and ensuring security, while customer support has to deal with refund and inquiry demands—such as the 10 working days refund arrangement promised by Infini, which also incurs a significant cost in terms of manpower support and response.

On the user side, individuals may encounter issues due to various payment scenarios, but the project team behind the U Card business must address these personalized problems; moreover, because the upstream chain is too long, when technical providers or card organizations encounter issues that lead to service suspension/abnormalities, they often find themselves in a position of being collateral damage.

compliance risk

In addition, the survival of U cards also faces stringent compliance requirements. KYC and AML (anti-money laundering) are basic thresholds, and if doing business in North America and Europe, registration with the US FinCEN and the EU MiCA regulations further intensify the requirements.

USDT itself is also one of the assets favored by gray industries (such as money laundering and score running), which naturally determines that U Card needs to spend more effort to handle risk control issues.

Moreover, when companies operating U card services adopt the model of “overseas registration, employees working domestically,” the unique nature of the encryption industry in the country makes this business more likely to face certain legal risks.

Recently, there have been reports on social media about certain U card services being suspended. We cannot know the authenticity and specific details of the event itself, but one thing is certain:

The efforts required for U card services to comply with local regulations, as well as the risks posed by other factors, are significantly higher than those of many on-chain businesses. Sometimes, it is not necessarily the card itself that is the issue; the funds involved, the users, and the relatively tightening public opinion environment can all cast a shadow over the brand and recognition of U card services.

It’s difficult to please and not profitable, which may be a common dilemma faced by most U-card projects focusing on the payment sector.

The current U-card business may be more suitable for CEX. CEX does not rely on U-cards to generate profits and income. When the trading business can generate sufficient profits, using U-cards for customer loyalty management and treating it as a differentiated brand service is a better choice.

For example, Bybit and Bitget currently 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 receive up to 4% Bitcoin back on each purchase, with the card supported by the American Express network.

The card is indeed something everyone wants to issue, but in the end, who can actually succeed will be more of a test of compliance resources and risk control abilities. From the current situation, the U card business is gradually moving towards oligopoly.

From vassalage to independence

On one hand, encryption is hindered in traditional business, while on the other hand, it has become a trend for traditional finance to continuously engage in businesses related to the cryptocurrency sector.

Whether it is stablecoins, RWA, or the recent hot topic of cryptocurrency asset reserves by U.S. publicly listed companies, traditional finance is leveraging its existing resources and compliance accumulation to “learn from” the crypto space and profit.

In the cryptocurrency space, besides the encryption-native business and the businesses surrounding trading and creating on-chain assets, there is an increasing feeling of being constrained when trying to gradually expand outward.

The predicament of U card services actually reflects the awkward situation of the entire encryption industry when interacting with the traditional financial system. As a “vassal” of traditional finance, the encryption industry has always been unable to take the initiative in the payment sector.

Perhaps reducing dependence on fiat currency conversion, initiating transactions directly from wallets, and conducting transactions through on-chain settlement to bypass traditional payment networks is the original form of encryption technology. However, under the premise of compliance and embracing reality, this path appears too idealistic.

However, if one tries to control the industrial chain due to being constrained by traditional business, such as acquiring banks, payment channels, and technology providers, it is likely to further increase the cost of operations, especially when it is uncertain how many users will use the card.

Furthermore, stepping back to look at the contradictions reflected in the U Card business, they are not only present in the payment sector but also permeate the extensive development of the entire encryption industry.

When innovation and enthusiasm can only thrive in the native soil of encryption, the grassroots, independent opportunities for breaking out in encryption have still not arrived.

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