What sparks can collide between the past and present of U Card and the compliance of stablecoins?
What exactly is U Card?
Logically, there is indeed no problem, and its value is very significant. Users can recharge stablecoins into U Card and directly use it for daily consumption, buying cigarettes, water, at supermarkets, gas stations, restaurants, and any aggregation code you see; it can be used with a scanner. This solves the pain point of small withdrawals in cryptocurrency. A few years ago, this was just an ideal vision of a beautiful life with blockchain, but now it has become a reality. Coupled with the concept of the metaverse, it should have gained immense popularity.
But why hasn’t it taken off and is only used by a small group of people? Today, I will talk about the past and present of various U Cards and how the name U Card came about.
The various U Cards we see now gained popularity around October 2022. The transaction fees were high, and only a few banks supported withdrawals. At that time, no one could understand the value behind it, so many bloggers were unable to promote it effectively. Of course, they also didn’t understand the industry trend and thought it was an IQ tax.
As a self-media person focused on OTC compliance research, I understood it and established some industry rules in this field. Only then did other bloggers slowly realize that the "leeks" (new investors) didn’t care about transaction fees but were concerned about safety. Yes, you read that right; I was three years ahead of my peers in understanding.
In the past, all coin merchants made a profit of 0.3% on OTC transactions at exchanges, while retail investors were even willing to incur a 5% loss for extreme safety.
When I got the permission, I thought of giving the product a name. Since it was a Mastercard channel, I casually named it "Mastercard U Card." Now this term has become an industry jargon, which is indeed a bit ironic.
Initially, the company behind Mastercard U Card was called Paytend, and the full name of Mastercard U Card was Unioncash. However, Paytend was quite problematic, suppressing agents and not providing services, and commissions were not paid. This was also a mainland company, with policies changing frequently. After the market director achieved results, they were suppressed and forced to resign, leading to a desire to run their own business.
As a result, the Unioncash business was sold to a payment company called ALC around September 2023. The foreign currency channel for OKEx uses this company's channel, and this company also has its own token called ACH.
It is important to note that you should never apply for those so-called virtual cards, as there is a risk of asset loss. Remember: the cost of various virtual cards is zero; any retail investor can set up a website to generate virtual cards.
Thus, the market was flooded with so-called agents, leading to chaotic promotion and advertising. Coupled with some scammers, the official immediately revoked the agent permissions.
Initially, the agent rights were very expensive, with high agent fees and an annual performance requirement of 40 million dollars, which kept many people out. Meanwhile, those second-hand dealers thrived, as they were not subject to official supervision, promoting everywhere on platforms like Douyin with false promises.
Many of the later U Cards were similar. International U Cards supported more banks, while Mastercard U Card only supported a few major banks and had a limit of only 7,000, not supporting binding with WeChat or Alipay. In the early stages, binding with Alipay was restricted after about three transactions due to risk control.
At the same time, various virtual cards were released, with Depay being the best. The physical cards were Mastercard U Card and International U Card (which later had its business suspended due to chaotic promotion by agents). Of course, the latter was superior, allowing direct QR code consumption at gas stations, convenience stores, supermarkets, etc. These functions can now be realized by various U Cards.
By the end of 2023, everyone understood U Card, and various self-media people began to promote it wildly in short videos, with the most common being the so-called Hong Kong U Card and Laos U Card.
They can bind to third-party payments, and the technology is already very mature. The functions are basically similar, with no significant differences. They can be used in daily convenience stores, supermarkets, gas stations, and restaurants. Some can even scan their own merchant code for consumption, with a loss rate of about 5%. There are fees of about 2% for recharging U into the card and around 3% for consumption, with slight fluctuations depending on the policies of each company.
So it’s not that mysterious. The core is that the issuer may be a legitimate foreign bank, and they don’t even know what their card is called U Card. They have opened API interfaces, allowing third-party operating companies to use the underlying logic of this card to do anything.
For example, if you establish a company and apply for an API interface, you can add your own functions. Thus, many U Cards are the same card, but the operating companies and apps are different, which is the reason.
To elaborate, if you apply for an API interface at an exchange, you can independently develop a quantitative trading software.
Looking at many so-called lawyers in the industry discussing U Card, they actually don’t even understand the core of U Card. U Card is just a code; its true nature is a consumption prepaid card issued overseas. Its biggest function is to pre-charge US dollars (not CNY) onto the card, allowing you to swipe it for consumption or withdraw cash at ATMs in most regions, automatically converting to the local currency. If you don’t have US dollars pre-charged, in some compliant regions (countries) for digital assets, you can use third-party platforms (websites, mini-programs) to first convert digital assets into US dollars, and then entrust a third party to recharge the US dollars into your card.
It’s like OTC at an exchange, where you give digital assets to a coin merchant, and the merchant gives you RMB or US dollars. What does this process have to do with the card issuer? They don’t even know what U is.
It’s just that the intermediaries have played it badly. Retail investors can use it normally without any issues; if there are problems, it’s with the third-party exchange platform, but they operate in compliant regions.
In fact, if you have US dollars in hand, you can design a so-called U Card yourself. You can take a legitimate bank or supermarket prepaid card and claim to support U, recharge U into your account, and then transfer the safe funds into this prepaid card. Users can then use it for consumption at major supermarkets.
What you need to do is diversify the consumption scenarios as much as possible, making it perfect if it can be used in every scenario.
In fact, the international issuers may not even know what happened, how it became a U Card. It must be stated that Chinese people are really clever.
But how were these U Cards played badly? Originally, it was fine to promote within their private domain, but these unscrupulous intermediaries went to publish a lot of Douyin promotions, and those who couldn’t promote resorted to these things to scam and create Ponzi schemes.
This led to attention from those who weren’t paying attention; if you’re not regulated, who is?
So, it was really those intermediaries who played it badly.
There is no currency exchange behavior (not occupying foreign exchange quotas), and there are no illegal points. It’s a transaction behavior generated from your own U cashing process, and there is no business operation involved.
It’s equivalent to a personal process of cashing out cryptocurrency, and this high transaction fee also prevents some criminals from arbitraging, so it is safe.
It’s such a simple thing; don’t be fooled by intermediaries.
What’s even more despicable is some lawyers who don’t even understand and go around criticizing currency exchange and legal risks. Are you breaking the law by buying a recharge card at the supermarket? The Supreme Court just said a few days ago that holding virtual currency is not illegal. Not being illegal in law means it is legal; you should understand that as a lawyer.
You are converting your legally sourced virtual currency through a third-party intermediary into US dollars, and the other party recharges it into a card that has completed KYC. You use this US dollar account for consumption, and it automatically converts to legal tender at the merchant. What law are you breaking?
As for the so-called promoters, just don’t act as agents. You just send the registration link to retail investors, and they register and apply themselves. What law are you breaking? After being a lawyer for so long, do you see everyone as a suspect?
So, these half-baked lawyers on the internet, especially those in the cryptocurrency circle, should learn and reflect instead of making a fool of themselves.
If you write about OTC, go open an account and test the OTC process yourself. If you want to write about cryptocurrency deposits and withdrawals, actually buy and sell some coins. If you want to understand the principle of U Card, spend 100 U to go through the process. If you want to write about how a sewing machine smokes, go in and experience it for 37 days. Oh, I got it wrong; they wouldn’t dare to do that.
You do nothing and just search for some advertisements written by self-media online, and you call that understanding the underlying logic? Then you come out to teach and educate users?
To summarize: U Card is indeed suitable for retail investors for small U transactions and daily consumption. However, it’s not that magical; it is essentially a legitimate card with third-party redemption, posing no risk or legal responsibility. But be clear, it is suitable for daily small consumption; it is not suitable for large withdrawals and is not a storage channel for your digital assets.
This is the beautiful imagination of blockchain, where you can use it for consumption scenarios like dining, shopping at supermarkets, watching movies, and refueling your car.
Earlier, I spoke from the perspective of retail investors; it is indeed a good thing. However, from the perspective of the operating party, U Card actually has many issues.
First, from the business model perspective, let’s look at costs and revenues:
The profit of U Card is thin; it is not a high-profit business. Its business model consists of two parts: recharge and withdrawal fees and earning commissions from consumption, with revenue around 1%-2%.
The maintenance cost is very high. The costs of U Card business include technical maintenance costs, user support costs, compliance costs, etc. When the user base grows, a customer service team needs to be maintained to handle refund and consultation requests.
Compliance risks and operational models are highly dependent on traditional financial intermediaries, such as payment giants like Visa and Mastercard, as well as issuing institutions.
U Card still belongs to a Web 2.5 product, which is very centralized. Users send stablecoins to the platform, and the platform gives you a card limit. When the funds deposited by the platform are large enough, the platform will have a strong incentive to run away with the money or be targeted by hackers.
As some platforms gradually accept stablecoin payments, the usage scenarios for U Card will be directly impacted.
Sustainable, high-return, low-risk—U Card clearly does not fit the criteria for a good entrepreneurial business. However, U Card business is more suitable for large players with user traffic and ample resources to attract users, but for most entrepreneurial projects, the returns are not proportional.
Although stablecoin payments are very popular now, whether this new business can be done still depends on the most basic business model and whether the main business can be integrated to create a 1+1>2 effect.
Therefore, the compliance of stablecoins combined with small payment methods will spark innovation, but there is still a long way to go. There are still many big players in my circle who have found a way, such as opening a bank in the United States, which only requires 15 million dollars in registered capital + 1 million dollars in deposit insurance + a business address.
- Crydit Card
Issuing Location: Denmark
Core Function: Supports hundreds of blockchain assets for online and offline transactions, with a wide range.
Fees: 1.5% for recharge, 2.5% for cash withdrawal
Advantages: Multi-currency support, high security
Disadvantages: Strict KYC review, high threshold
- VCard
Issuing Location: United States
Core Function: Provides physical and virtual cards.
Fees: 1.35% for recharge, 2% for ATM withdrawal
Advantages: Low rates, no strict KYC required
Disadvantages: High management fees, physical cards take longer to mail
- PokePay
Issuing Location: Hong Kong
Core Function: Supports HKD settlement, can bind AlipayHK
Fees: 1% for consumption, additional 1% exchange rate loss for non-HKD transactions
Advantages: No minimum recharge limit, wide coverage for online and offline scenarios
Disadvantages: Average security, stability fluctuations
- Dupay
Issuing Location: Not specified (old virtual card)
Core Function: Covers overseas subscription services
Fees: 2.2%-2.5%
Advantages: Large user base, low card opening threshold
Disadvantages: Frequent system maintenance, previously exposed to withdrawal risks
- THpay
Issuing Location: Hong Kong
Core Function: Supports global cash withdrawals
Fees: Exchange loss 1.5%-2%
Advantages: Supports mainstream e-commerce platforms (Tmall, JD, etc.)
Disadvantages: Average security, overall costs are high
- NEXA CARD
Issuing Location: Lithuania
Core Function: Cardholders can receive NFT airdrops and ecological rights.
Fees: 0.5% for consumption, 2% + 3U fixed fee for cash withdrawal
Advantages: Virtual card activated on the same day
Disadvantages: Physical card shipping to Europe takes 15-20 days, high fees
- Bybit Card (currently ❌)
Issuing Location: Bybit platform
Core Function: Directly linked to exchange account, USDT automatically converted to fiat for consumption
Fees: Transparent but slightly higher than market average
Advantages: High fund security, supports global cash withdrawals
Disadvantages: Strict KYC, limited support for domestic consumption
- Hyperpay
Issuing Location: Lithuania
Core Function: Supports multi-currency deposits and withdrawals.
Fees: 0.85% for cash withdrawal, 0.75% for consumption
Advantages: High security and convenience
Disadvantages: Requires overseas KYC, limited applicability
- Panda Bank
Issuing Location: Cambodia
Core Function: Supports direct deposits and withdrawals of USDT
Fees: 0.5% for cash withdrawal, 0.8% for consumption
Advantages: Fully licensed in Cambodia, strong compliance
Disadvantages: Low limits, only suitable for small users
- SpeedPay
Issuing Location: Not specified
Core Function: Focuses on cross-border payments (studying abroad, travel, etc.), requires opening a card through an agent
Fees: 1.9% for cash withdrawal, 1.9% for consumption
Advantages: Addresses enterprise-level cross-border payment needs
Disadvantages: High fees, high threshold for individual users.
Everyone can choose according to their personal situation. Most U Cards have a card opening fee; avoid using free or unknown ones carelessly, be careful not to lose your U.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
