Journalist, crypto investor
In 2020, the consumer has spoken and business has recognized the need to step up the game. In July, giant payment networks started to accept the need for a bridge between cryptocurrency and the traditional financial world. VISA pledged to advance their approach to digital currencies, while Mastercard expanded the cryptocurrency program.
But this happened not at the scale that the cryptocurrency community recognizes. As of the beginning of 2021, a consumer still struggles to pay with cryptocurrencies for the most basic things like coffee.
One solution to charge up the cryptocurrency adoption is the crypto debit card. In 2016 was issued the first debit card that was just like the traditional card but was charged up with Bitcoins. Previously, a cryptocurrency holder had two ways: either wait for the business to set up the crypto payment gateway or convert crypto on exchanges to fiat prior to purchase. Now they can just get their card and that is it.
But while the growth of the cryptocurrency market is skyrocketing, the usage of crypto cards is beyond modest. What stays in the way and is there a chance for a breakthrough in 2021?
In 5 years since the first crypto debit card, the market has certainly developed competition. Crypto cards differ in features, limits and even the way they offer control over funds. Let’s start exploring how the market has been evolving by considering four companies with the most favourable conditions for holders.
Despite being a pioneer in the market, BitPay crypto cards did not make further breakthroughs. The card stayed conservative on working only with four cryptocurrencies, including the infamous XRP.
But the advantage of a first-mover saved a company from high marketing costs. While now most of the crypto card issues have a referral program with bonuses for new sign-ups, the BitPay does not involve in this race for customer acquisition and loyalty. Moreover, cardholders can still withdraw funds no more than 3 times a day.
Indeed, a thin list of accepted cryptocurrencies and lack of perks might be overlooked for the innovative product. Almost 5 years ago it was enough to issue a card for US residents only that would automatically convert crypto into US dollars.
But the biggest barrier is that the platform asks to lose control over funds and practice trust. Users need to first create an account in the BitPay wallet, and only then can they charge up the card. To market the necessity of trusting to the Bitcoin community that advocates the principles like “not your key, not your Bitcoin” is tricky, so spoke the market numbers.
The British cryptocurrency platform Wirex that offers crypto cards since 2015. The Wirex crypto card evolved to accepting 10 digital currencies (BTC, LTC, ETH, XRP, WAVES, WOLLO, DAI, NANO, XLM), tokens of Wirex platform and 3 fiat currencies — the US dollars, euros and British pounds.
The company did not have the first-mover advantage and quickly stepped into the practice of attracting users with a referral program. But there is a catch: in order to participate in the program, a user needs to purchase the internal tokens of the Wirex platform.
While the card can be issued for free and the monthly fee is €1.2 per month, fees for cash withdrawal at an ATM can be seen as rather significant – €2.25+3% per transaction.
While the company widened the list of accepted currencies and rewarded clients for loyalty, the underlying principle remained intact. Big fees for withdrawals could be overlooked, but cautious cryptocurrency holders would still have to fight with all principles of the crypto community and first trust the digital wallet of Wirex, because the platform still does not offer direct deposits to the card.
CryptoPay is the UK and EU closest version of BitPay. The CryptoPay card also supports only four cryptocurrencies: BTC, ETH, LTC, and XRP.
While the monthly fee is lower than for British Wirex cards, the fees for operations might raise eyebrows: €3.5 for withdrawing funds outside the EEA (€2.5 for ATMs in Europe) and €3.5+3% for withdrawing funds other than the card currency.
Also, the card holder can withdraw funds only 5 times a day, which is better than BitPay’s limit of 3 times but the one-time withdrawal limit is only €450 for CryptoPay. With such limits, the card could post difficulties for holders or will only be used for small purchases.
As with above-mentioned cards, the issue of trust is still there. Users need to register, deposit funds to the platform account and then send the required amount to the card account. After crediting, the cryptocurrency is stored on the card in US dollars.
4. TTM Bank
TTM Bank cards are offered for residents of almost all countries. The delivery of plastic cards is free, while the issuance of a virtual card takes less than 15 minutes. The card can be used anywhere in the world where VISA cards are accepted. A truly international product required an innovative approach and they delivered it.
The key difference of the TTM Bank card in comparison with its competitors is the breakthrough from the previous practice of ignoring the most important principle in blockchain – the principle of decentralization. With TTM Bank card crypto holders charge up their card directly from a wallet of their choice. The platform has a wallet in the ecosystem for convenience but they are giving consumers a choice to take full control over funds.
As for details, TTM Bank card supports 5 digital currencies: BTC, ETH, USDT, BNB, and TRX. Cryptocurrencies credited to the TTM Bank card are immediately converted into euros. The company works under the EU jurisdiction, and the deposited funds are stored in a licenced bank.
Project has a prompt support team, a minimalistic fraud protection design, when the card number is hidden on the back of the card, and a contactless feature for Apple Pay users (The Google Pay users are promised to be included in this quarter).
The first crypto card held a promise to the crypto community but asked for a significant compromise on safety. Most crypto cards proved once again that real bridges between the cryptocurrency world and the world of traditional finance do not require sacrificing the main decentralization principle. With global reach, this breakthrough approach to keeping control over funds in the users’ hands, can bring the leadership position to the use of crypto cards. This is another way how the crypto adoption might be accelerated at an unprecedented pace.
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