7th Feb 2018
Lloyds Banking Group has become the first lender in the UK to ban customers from buying bitcoin using its credit cards. The ban also applies to other cryptocurrencies.
The bank is worried about customers being caught out by the volatility of bitcoin and not being able to pay back their debts after suffering considerable losses. Banks in America, including JPMorgan Chase and Citigroup, have already put a ban on buying cryptocurrency with credit cards.
The ban is not a total blockage. Customers wishing to buy cryptocurrencies will still be able to bill them to their debit cards.
Lloyds has put the decision down to wanting to protect customers from extreme losses. Customers of Halifax and Bank of Scotland will also be affected, as they are part of Lloyds Banking Group.
The banking sector has suffered a hit to its reputation since the 2008 financial crisis and many are attempting to win back the trust of their customers. One of the key themes for customer service this year is transparency and accountability, so this move, while protecting Lloyds’ own interests, may also prove helpful for the bank’s customers.
Bitcoin recently lost almost 15% of its value during morning trading, triggering losses for many traders. It ended that day in positive figures again, but swings like this are what have caused some banks to take action.
In the latest UK Customer Service Satisfaction Index (UKCSI), Lloyds scored 78.1. While this is the UK all-sector average, it is lower than the banking sector’s average score of 79.8.