On Sunday, iSignthis sent out a letter to its shareholders, notifying them that they will soon be ending its contractual relationship with Visa as a principal member. They will do so in an approximate of 90 days and cite the upcoming changes from the payments giant as the reasoning behind this move.
Not Agreeing With Rule Changes
In Particular, iSignthis cited the proposed rules that Visa will start putting in effect during October of this year. This change in regulations will severely hamper iSignthis, according to the letter, restricting its competition and trade. Thus, the company has decided to pull its relationship with Visa, preparing its submissions to various competition regulators within the European Union and Australia in regards to the impact of these proposed rule changes.
The payments identity company explained that Visa is currently trying to classify the various payment facility providers and regulated electronic money issuers, the same as they classify unregulated wallets. What this means in a real context, is regulated entities like Paypal and iSignthis will be set alongside entities like Apple Pay. What this means is iSignthis will be subject to Visa’s staged digital wallet operator (SDWO) ruleset.
Bunching Up Regulated With Unregulated Counterparts
Through the letter to their shareholders, iSignthis stated that the implications of these proposed changes are extreme. In short, the company would need to either be classified as a standalone SDWO or a principal acquirer. Should they wish to be both an SDWO and an acquirer, the company would need to hold an NTA of over $100 million.
This announcement comes after Visa suspended iSignthis, with the payment giant itself explaining that the suspension was enacted through its anti-money laundering division. Of course, iSignthis summarily rejects this implication and affirms that it has never processed unlicensed operators.
Forced To Adapt
This impact on iSignthis after Visa suspended its services have been many, according to the company. iSignthis has cited a decline in revenues during March and April thanks to an interruption of growth. However, as one would imagine, iSignthis saw an increase of augmented SEPA instant payment services during the month of May, as a result.
Citing this as a confident base, iSignthis stated that it was confident in its ability to cover Visa’s instant notification and instant payment services through EEA, classifying it as a direct substitute. iSignthis said that Visa’s acceptance rates when it comes to gaming and securities dealers stand lower when compared to other schemes, as well.
As it stands now, Visa was asked to comment about the matter but has yet to send a response at the time of writing.