Global cash payment network ZipZap has temporarily halted digital currency transactions, after partner and non-bitcoin payment processor PayPoint said it needed more clarification on surrounding regulations.

ZipZap CEO Alan Safahi told CoinDesk the company had not ended its relationship with PayPoint, adding that it was still working with them for non-digital currency clients, and to add more payment locations. He said such issues were a fact of life for bitcoin businesses who needed to operate within the traditional fiat world. He added:

ZipZap had allowed customers to buy bitcoins with cash by first registering at its site and verifying ID, printing out a barcode on a payment slip and then taking it to a cashier at a physical location to hand over the money.

The service operated in five countries and customers could also login via existing accounts with Bittylicious, BuyBitcoin.sg and BIPS Market, using exchanges ANXBTC and ANXPRO. ZipZap had plans to also include Kraken, CoinMKT and BTCX.se.

There were 28,000 physical stores for customers to pay – all of them PayPoint clients.

PayPoint had reportedly halted deposits to ZipZap until the UK government and the financial conduct authority provide legal clarity on digital currencies.

Though the process of printing slips and visiting a store might seem a cumbersome way to acquire such currency, it remained simpler and much less risky then dealing with online bitcoin exchanges.

Identity and address verification requirements for exchanges have increased markedly in the past year and even seasoned bitcoin users have become reluctant to trust them with large amounts of money or customers' personal banking details.

ZipZap allowed customers to transact within their own country, as long as it was one of the five, and with registered businesses.

The company had apparently had no problems with its partners in the traditional banking world, but payment processors like PayPoint and PayPal have been treading far more cautiously with digital currency related activities.

If a solution cannot be found with PayPoint, there may still be other payment processing options for ZipZap in the UK. There hasn't been any overt pressure from the UK's authorities for either financial institutions or the public to avoid bitcoin transactions.

Despite hints about eliminating sales tax, there is also no legislation related to bitcoin in the UK as yet, which appears to leave businesses free to try new models but which can actually stifle innovation, as entrepreneurs and investors become reluctant to enter the unknown territory.

ZipZap, still a relatively new business, has been trying to grow across the UK and other European markets. However, it may now focus on other overseas markets (like the US) after finding Europe's environment too challenging.

The company's site lists its headquarters in San Francisco, and it also has operations in India and Argentina.