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Coinbase Credit Card Processing 2023: Reviews & Complaints
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Note: The 2023 SEC lawsuit against Coinbase has led us to recommend caution to businesses considering Coinbase for any major payment services until the lawsuit is settled.
Founded in 2012, Coinbase (coinbase.com) is a virtual currency processor that helps users make transactions with digital currencies like bitcoin, litecoin, and ethereum. Coinbase’s platform is available to developers, consumers, and business owners, but this review will primarily focus on how Coinbase helps businesses accept cryptocurrency payments from customers.
2023 SEC Lawsuit
A major and likely industry-defining lawsuit was brought by the SEC against Coinbase in 2023. According to the US government:
“The Securities and Exchange Commission […] charged Coinbase, Inc. with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency. The SEC also charged Coinbase for failing to register the offer and sale of its crypto asset staking-as-a-service program.”
This suit is currently ongoing and its results will determine the history of not just Coinbase but likely the entire cryptocurrency segment of the world economy.
No More Fiat Payouts
Like its competitor Bitpay, Coinbase previously enabled businesses to accept an online bitcoin payment from a customer and then receive that payment as a deposit to the business’s bank account in fiat currency. However, it appears to no longer offer this feature, which means that merchants must accept payments in their chosen cryptocurrency and then exchange that currency themselves. This leaves businesses vulnerable to fluctuations in market pricing for their given cryptocurrency.
Favored by High-Risk Merchant Types
Bitcoin (like other virtual currencies) is an appealing payment method for many high-risk merchants because of its reputation as “digital cash,” meaning that it is not regulated by bank policies and that all sales are final. However, Coinbase monitors accounts for illegal and high-risk activity, and the company will deactivate accounts that violate its terms of service. For this reason, Coinbase should not be relied upon as a payment processor for fringe products such as e-cigarettes, CBD oil, medical marijuana, gambling, firearms, adult products, or nutraceuticals.
Cryptocurrency Trading on Coinbase
The core service of Coinbase is to allow users to trade cryptocurrencies. The platform supports a wide range of digital currencies, providing users with an easy-to-use interface to buy, sell, and trade these assets.
Coinbase’s Wallet Service
Coinbase offers a digital wallet service, enabling users to securely store their cryptocurrency assets. This feature provides a high level of security and easy access to digital currencies, fostering a secure and convenient user experience.
Cryptocurrency Payment Processing by Coinbase
For businesses, Coinbase provides a cryptocurrency payment processing service. This feature allows businesses to accept cryptocurrency payments from customers, opening up new avenues for commerce and enabling businesses to tap into the growing pool of cryptocurrency users.
Coinbase’s Merchant Solutions
To further support businesses, Coinbase offers merchant solutions. These services provide tools and integrations to allow businesses to seamlessly accept cryptocurrencies, convert these into local currency if desired, and manage these transactions efficiently.
Cryptocurrency Conversion Service by Coinbase
Coinbase provides a cryptocurrency conversion service that enables users to exchange one type of cryptocurrency for another. This service ensures seamless trading experience across multiple types of digital currencies.
Security Measures from Coinbase
Security is a primary concern for Coinbase. The platform uses a combination of online servers and offline “cold” storage to protect users’ assets. In addition, it provides features like two-factor authentication and insurance coverage to enhance user security.
Location & Ownership
Coinbase is not partnered with an acquiring bank and is headquartered at 548 Market St, San Francisco, California 94104. Brian Armstrong is the CEO of Coinbase.
Table of Contents
Coinbase Customer Reviews
Here's What Their Clients Say
|Total Online Complaints||30+|
|Live Customer Support||No|
|Most Common Complaint||Account Termination|
Low-to-Moderate Complaint Total
We are currently able to locate more than 30 negative Coinbase reviews on other review websites and forums, although the total could be much higher when considering the overall number of general comments about the company’s service. Common complaints include account closures, software bugs, poor exchange rates, and a lack of customer support, and some of these complaints describe the company as a ripoff or a scam. If you have your own Coinbase review to make, please do in the comments below.
One general sentiment that is often voiced about the company is that its willingness to work with mainstream banks and accept large amounts of venture capital runs counter to the decentralized, stateless vision of cryptocurrency held by many bitcoin enthusiasts. This philosophical approach by Coinbase limits the service’s appeal for high-risk businesses. High-risk businesses that are hoping to capitalize on the anonymity and freedom of cryptocurrency by selling their products through Coinbase will be especially susceptible to having their accounts monitored and terminated, and they are advised to not use the platform for their products.
Coinbase is currently the defendant in class-action lawsuit alleging that the company manipulated the prices of currencies on its exchange in violation of its own terms. There is no current information available about the status of this lawsuit, but it is unrelated to the company’s payment processing services and will not have a major impact on its score in this review.
The SEC sued Coinbase in 2023 in a major move to regulate crypto. See above for more information.
Coinbase Customer Support Options
Coinbase offers phone and email support to all users, but widespread complaints about account termination and a lack of live customer support have lowered the company’s grade in this category. The service appears to be best suited for cryptocurrency newcomers hoping to exchange, manage, and experiment with digital currencies. It is not ideal for high-risk or high-volume merchants who need a robust payment platform for bitcoin and its equivalents.
Coinbase Online Ratings
Here's How They Rate Online
Over 1,200 Complaints
Coinbase currently has an “F” rating with the Better Business Bureau and is not BBB-accredited. The company has received 3,553 complaints in the past three years. Coinbase has resolved 1,593 of these complaints to the satisfaction of the user, while 1,960 complaints either were resolved to the dissatisfaction of the user or did not receive a final response from the user. This low response rate is a major factor lowering the company’s BBB rating.
What Users Say
Coinbase has received 9 positive informal reviews and 484 negative informal reviews to its BBB profile. This profile receives feedback from merchants and non-merchants alike. The most recent review that is applicable to the merchant experience describes a frozen account:
I have been locked out of my account for more than 6 months due to moving countries and having my old phone stolen. Because of that, I have not been able to update the 2 factor authentication. They method to resolve is to verify my ID but it is not verifying any of my 3 forms of ID. I have semt them 4 different emails about the issue and only the first one got a response from and it was clearly a copy/paste. They did not look into my issue otherwise it could’ve been resolved. I just want to access it so I can get ahold of my investment in there and to of course update all my information. Their chat support is complete garbage. If you cannot sign in to your account it will always go back to suggesting ways to access it. Their phone support is literally just to lock your account. No way to speak to a real person.
Business owners should understand why credit card processors hold funds and apply those same rules to their use of Coinbase.
An “F” Performance
The BBB is unable to locate an accurate address for Coinbase and does not appear to have received a response from the company since January 2018. We therefore agree with the BBB’s rating for the purposes of this review.
Coinbase Fees, Rates & Costs
A Closer Look at The Contract
|Monthly & Annual Fees||No|
Free Cryptocurrency Processing
Coinbase enables all users to convert their money between fiat currency and multiple virtual currencies through a bitcoin exchange at variable conversion rates, but its merchant processing solution is for accepting virtual currencies only. Uses can receive their payments from customers in bitcoin, bitcoin cash, ethereum, or litecoin. All payments are free to receive and are deposited in a secure online wallet. All deposits are subject to Coinbase’s terms of service and do not come with any monthly or annual contract obligations.
Virtual Currency Price Fluctuation
Businesses should be aware that although accepting payments in bitcoin will spare them a processing fee, they will then be subject to market fluctuations in bitcoin’s pricing. The same is true for other virtual currencies. This could result in a loss on the transaction if exchange rates go down, but it could also be attractive to users who are optimistic about a specific currency’s eventual value.
Prohibited Business Types
By opening a Coinbase Account, you confirm that you will not use your Account to do any of the following:
Unlawful Activity: Activity which would violate, or assist in violation of, any law, statute, ordinance, or regulation, sanctions programs administered in the countries where Coinbase conducts business, including but not limited to the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), or which would involve proceeds of any unlawful activity; publish, distribute or disseminate any unlawful material or information
By opening a Coinbase Account, you confirm that you will not use Coinbase Services in connection with any of following businesses, activities, practices, or items:
High risk businesses: any businesses that we believe poses elevated financial risk, legal liability, or violates card network or bank policies
Coinbase outlines other specific instances of prohibited use, such as e-cigarettes, medical marijuana, weaponry, nutraceuticals, adult content, multi-level marketing, and other high-risk industries. Coinbase does note that certain money services, charities, games of skill, and religious organizations can use the platform with express written consent from the company following extensive disclosure.
An Easy Solution for Crypto Payments
Coinbase Employee Reviews & Sales Tacitcs
Should You Work For Them?
|Uses Independent Resellers||No|
|Discloses All Important Terms||Yes|
Transparent Price Quotes
Coinbase appears to primarily market its services through traditional advertising and corporate partnerships. There is no indication at this time that the company uses industry-standard independent sale agents or telemarketing to sell its services. Coinbase discloses its pricing and contract terms on its website, but some of this information is not prominently listed. Business owners are encouraged to thoroughly read through the company’s “Help” section if they have any questions about pricing or contract terms.
No Red Flags
Coinbase’s commitment to disclosure, as well as the absence of “teaser” quotes on its website, has earned it an “A” rating in this section. If you suspect that the company is charging you hidden fees, you may be able to find and eliminate those costs with a third-party statement audit.
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