U-card business faces challenges, industry outlook is uncertain

Recently, a well-known cryptocurrency card service provider, Infini, suddenly announced the suspension of its card services, sparking widespread discussion within the industry. The company stated that it would suspend the use of all cards and new applications starting immediately, and it would refund the card issuance fees to affected users.

The company's co-founder explained that the decision to stop the business was mainly due to high compliance costs, thin profits, and a heavy operational burden. He stated that the U Card business consumed 99% of the company's time and costs, yet generated almost no revenue. In the future, the company will shift its focus to wealth management and asset management businesses.

Industry insiders analyze that the U-card business faces numerous challenges. Firstly, there is a high compliance risk; a single internal report or investigation could result in hefty fines, potentially exceeding the cost of obtaining a license. Secondly, U-cards are easily abused by criminals, and the platform needs to directly bear the risks at the retail end. In addition, card organizations and upstream banks often transfer all fines related to anti-money laundering loopholes onto the issuing entity.

From the user's perspective, the actual cost of the U card is much higher than the apparent transaction fees. In addition to the card issuance fee and exchange loss, there are also friction costs during the recharge process. Without substantial subsidies, ordinary users find it difficult to accept such rates.

Nevertheless, the U Card track is still favored by capital. In March of this year, a certain U Card service provider successfully completed a $40 million Series A financing. At the same time, some large cryptocurrency exchanges are also actively laying out in this field.

However, compliance risks remain the biggest obstacle for the U Card business. In some countries, using the U Card may involve foreign exchange management regulations or bans on the use of cryptocurrency. Users need to understand the relevant legal requirements in their location when using the U Card to avoid legal violations.

Moreover, while some hope to avoid taxes through U cards, this practice is actually not feasible. Most U cards still rely on international payment networks, and transaction records can be tracked by tax authorities. Cross-border transactions are more easily detected by regulatory agencies. Therefore, evading taxes through U cards is not only unachievable but may also lead to severe penalties.

In general, although there is a certain market demand for U card services, the challenges and risks faced should not be underestimated. Whether it can find a balance between compliance and profitability in the future will be a key factor in determining the development prospects of this industry.