The U-card business faces challenges, with compliance costs and profitability dilemmas prompting industry reflection.

Recently, a well-known cryptocurrency payment card service provider suddenly announced the cessation of its U card business, sparking widespread discussion in the industry. The company stated that it would immediately suspend the use of all cards and new applications, and promised to refund users the card issuance fees paid within 10 working days.

The company's senior management explained that the main reasons for deciding to exit the U Card business are high compliance costs, slim profits, and heavy operational burdens. They pointed out that the U Card business consumed 99% of the company's time and resources, yet failed to generate substantial revenue. In the future, the company will shift its focus to wealth management and asset management businesses.

Industry experts analyze that the U Card business faces multiple challenges. First, the compliance risk is enormous; a single internal report or investigation could lead to hefty fines, potentially exceeding the cost of obtaining a license. Second, the U Card is prone to misuse by criminals, increasing the platform's risk management difficulties. Additionally, compared to traditional credit cards, the U Card lacks competitiveness in small transaction scenarios, making it difficult to attract ordinary users without substantial subsidies.

However, despite facing numerous challenges, the U card market still attracts the attention of investors. Recently, a U card service provider successfully completed a $40 million Series A financing round, with investments from several well-known venture capital firms. At the same time, some large cryptocurrency exchanges are also actively laying out U card business, attempting to extend stablecoin payments from on-chain to the physical consumption field.

The operation of U Card involves multiple links, including card organizations, BIN providers, issuing institutions, card program managers, fiat-crypto exchange vendors, and card production and technology integration service providers. These roles need to work closely together to jointly support the operation and compliance of the U Card business.

However, U Card users still need to be aware of potential legal risks. In certain countries, using U Cards may violate foreign exchange management regulations or cryptocurrency usage bans. Additionally, using U Cards for tax evasion is also not feasible, as tax authorities can track fund flows through various channels.

Overall, although the U Card business faces many challenges, it still attracts market attention. In the future, how to balance compliance requirements, user experience, and profit models will be key factors determining the development direction of the U Card industry.