VISA AND MASTERCARD FORCE PAXUM TO DROP BITCOIN
Established banks and payments processors are skittish about the cryptocurrency Bitcoin, it would seem, prompting Canadian e-payments service Paxum to drop its Bitcoin clients last week.
Paxum, an e-commerce payments solution popular with adult web sites, started working with Bitcoin exchanges more than a year ago. Paxum hooked up with leading Bitcoin exchange Mt. Gox in December 2010, major Bitcoin exchange Tradehill in July 2011, and more recently with BitInstant, a service that speeds up Bitcoin transactions by fronting customers the credit, and others.
But on Friday afternoon, the operators of Paxum’s Bitcoin-related accounts received an email with the subject line “Bitcoin termination.” Paxum’s banking partners, which include Mastercard, had called off the Bitcoin party.
Although Bitcoin is not illegal, Paxum’s partners consider the cryptocurrency “high risk,” Paxum explained. “We simply must cease all business with Bitcoin based on our banking partners/Mastercard etc. We don’t have a choice in the matter I’m afraid,” Ruth Blair, a representative for Paxum, told Betabeat via Skype.