Hackernoon logoCrypto Cards in 2021: How Far Have We Come? by@julie99

Crypto Cards in 2021: How Far Have We Come?

A debit card for Bitcoin and other cryptocurrencies works in much the same way as regular credit cards. They are designed to make it easier to use cryptocurrencies directly as needed, even if the merchant does not accept payments in them. The cards work in tandem with MasterCard and Visa payment systems. They contain not only cryptocurrencies but also fiat money (dollars, euros, etc.) These cards contain no intermediaries, which simplifies and reduces the cost of transactions with cryptocurrency. There are three main scenarios on the market right now.
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Julie Stephan Hacker Noon profile picture

@julie99Julie Stephan

Technologist and product experience leader that bridges business, engineering, and design. Part time researcher.

A debit card for Bitcoin and other cryptocurrencies works in much the same way as regular fiat cards. You can swipe your card at the Point Of Sale in a store, you can use it at an ATM to withdraw cash, or enter its details for online purchases.

Usually, all expenses are converted to local fiat currency, ideally at the best rate and no other taxes. They are designed to make it easier to use cryptocurrencies directly as needed, even if the merchant does not accept payments in them.

Features of Crypto Cards

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Before using crypto cards, you need to understand their features:

  • The considered cards work in tandem with MasterCard and Visa payment systems. Simply put, the owner of such an accessory can pay with a card anywhere and anytime;
  • These cards contain not only cryptocurrencies but also fiat money (dollars, euros, etc.). Thanks to this, the exchange takes place quickly and at the internal rate, without markups and commissions. This is an automatic process;
  • The card will be linked to the account opened in this service. Thanks to this, you can get fiat money pretty quickly;
  • You can work with some cards without verification, absolutely anonymously;
  • The card provides round-the-clock access to funds;
  • There are no intermediaries, which simplifies and reduces the cost of transactions with cryptocurrency.

How crypto cards are used?

If you have registered on an online banking or bitcoin exchange at least once, you are unlikely to have problems registering and ordering a crypto card. It is simple, like ordering your debit or credit card.

Let's get to the main thing - how to "withdraw" BTC using it. There are three main scenarios on the market right now. They depend on how the issuer's system is arranged.

Scenario 1

This is how the Coinbase card works. The card is linked to an account on the exchange with the same user's name. The user orders the card and when they receive it, they can link it to their Coinbase account using the app. Once registered and linked, the user can start making transactions with the card.

But how does it actually work? No doubt, the purchases are still paid for in fiat currencies, while the cryptocurrency is taken over by the exchange. (This is, of course, a compromise solution, because stores around the world are not ready to accept Bitcoin and other coins.)

Scenario # 1 has two obvious drawbacks. The user needs to switch wallets from which they draw funds: BTC, LTC, XRP, ETH, etc. And also track the exchange rate so that the exchange is profitable.

Scenario 2

This is how AdvCash works. At the disposal of the user are accounts and a card. The crypto owner can chooses which currency account they want to use for transfering crypto: dollar, euro, or any other. To do this the user is provided with a key, which is linked with their account. By inserting this key in the withdrawal window of the wallet or on the exchange, crypto is transfered to the fiat currency of their choice.

Once the crypto is converted to fiat, it can be sent to the crypto card.

An important nuance: When transferring money from a wallet or exchange, be careful. To the amount of bitcoin that AdvCash will calculate for you, add the commission that the wallet/exchange will charge you. Otherwise, the enrollment may not take place or may be delayed. ePayments have the same card recharge scenario.

Scenario#2 has one drawback: you still need to first transfer the crypto into fiat currency.

Scenario 3

CryptoPay works in this way. In this scenario, the user has at his disposal a bitcoin wallet, fiat account, and a crypto card in one place, an app. Consider it like a mobile banking app, where your credit and debit cards are connected and can be operated through the app.

This is the most convenient solution for all crypto cards because everything you need is available in one place. A person can store cryptocurrency and fiat together. You can also check the transaction rates using the card when converting the crypto into fiat i.e. dollars, euros, etc.

However, it is funny that Cryptopay can be used without KYC verification, but with some restrictions (there is a limit to the maximum amount this card can hold). This may raise questions on its usage as a possible way of money laundering. But, restriction to the maximum amount makes it less of a threat.

Scenario #3 seems to be the most convenient way crypto cards can be used.

Brief conclusion: As you can see, cryptocurrency cards are not difficult to use. If you have seen an online banking app, traded on a crypto exchange, or accepted funds to a crypto wallet, you will not have to learn anything new.

As of 2021, there is a huge collection of crypto cards: Revolut, SpectroCoin, Uquid, Amon, Bitwa.la, Bitpay, Xapo, Bitnovo, Bitcard, TTM bank ... What about all this variety?

Top 6 Crypto Debit Cards

I have arranged a list of the best crypto cards currently on the market.

1. Binance Card

At the end of March, the largest cryptocurrency exchange Binance announced the launch of its crypto debit card. It will be possible to replenish it with bitcoins or internal tokens of the BNB exchange, and in the future, it will be possible to pay, with it like a regular card from about 46 million merchants in more than 200 regions and countries.

So far, the card is available only in Malaysia, but later it will appear in other countries of Asia, and then in the rest of the world. However, you can leave your email address on the Binance webpage if you want to get notified when the Binance card is available in your country.

Initially, only a $15 virtual card can be obtained, and physical cards will be issued at a later date. For virtual cards, there will be no commissions for servicing the card or account. The Binance Card can be linked to the balance on the exchange, and, if desired, replenished from any crypto and your BNB wallet.

Also, the Binance Card team has already released an application on Google Play that allows transactions with the card. However, it has minimal functions: a map page (not working yet), a built-in crypto wallet, and personal data, notifications, and security settings. No history of transactions, statements, and other options familiar to an online bank has yet been provided.

Most likely, when paying with a card, cryptocurrencies on the account will be converted to local currency, but Binance did not provide any details on this topic. It is also unknown which bank issues the card and based on which payment system it will work.

2. AdvCash

AdvCash is perhaps one of the most famous financial services for freelancers, presented in the form of a payment system and a digital wallet. The AdvCash crypto card is supported in almost all countries, except for sanctioned states and bear corners. When registering, you can add several fiat currency wallets at once.

Last year, the service launched its crypto cards - both physical and virtual. The main difference between the first type and the second is in the cost of production. Also, you will have to pay a small commission for replenishment from the virtual wallet AdvCash and in case of withdrawing cash in a currency other than the currency of the card account.

You cannot store cryptocurrencies as such in the service, but you can replenish your fiat account with several coins - BTC, ETH, LTC, BCH, XRP, ZEC, TRX, and USDT. The transfer will be converted into the currency of the account to which the funds are received. The same scheme works for withdrawals as well.

Note that due to the situation with the coronavirus pandemic, AdvCash temporarily stopped issuing new cards, but promises to return this opportunity soon.

3. ePayments

ePayments is another payment system with a cryptocurrency gateway and a plastic card.

As for commissions, the service takes money for issuing and reissuing cards, as well as for delivery. Mail delivery is free, but it will take several weeks. Express shipping costs $45. Also, you will have to pay a fixed fee when dispensing cash from ATMs. Transfers to and from card to ePayments accounts are free. 

For all other transfers from the wallet (for example, to Qiwi or Yandex Money) you will have to pay a percentage. Also, there is a conversion fee for purchases other than the card's currency.

Whether the service's problems are related to support for cryptocurrency transfers is unclear. The service is affiliated with the British crypto exchange DSX, and 20% of all ePayments transactions involve digital assets. 

4. BitPay

Even though BitPay was the pioneer of crypto cards, unfortunately, it did not make a great impact in the market. The card only supports 4 cryptocurrencies including the controversial ripple.

However, being the first one to launch crypto cards saved higher marketing costs. BitPay didn't have to invest much in marketing their launch for customer acquisition and loyalty, unlike others. Moreover, drawing funds 3 times a day makes it more convenient for cardholders.

It seems that BitPay missed the trick by not adding enough cryptocurrencies to the card.

But there's another major hurdle that stopped this innovative product from being popular. The platform asks the users to first create an account in the BitPay wallet, and then charge up the card using their wallet balance. This means that users will have to first lose control over funds.

5. TTM Bank Cards

TTM Bank made a big breakthrough by making their crypto cards available in almost all countries except the ones sanctioned by regulatory authorities worldwide.

Another benefit that TTM Bank offers is the free delivery of plastic cards along with a minimal time for issuance of virtual cards. Supported by VISA, this card can be used anywhere across the globe.

Crypto cardholders can charge their TTM Bankcard directly from any wallet. This gives customers full liberty to control their funds.

TTM Bankcard only supports 5 digital currencies i.e. USDT, BNB, BTC, TRX, ETH. TTM works under the EU jurisdiction and all transferred funds are stored in a licensed bank.

6. Wirex

In March 2021, Wirex, a UK-based digital payment platform also launched its long-anticipated multicurrency debit card in UK and EEA. With nearly 3.5 million customers, the London-based fintech company made headlines in July 2020, after becoming Mastercard's first crypto-native principal member.

Building on this partnership, the new Mastercard debit card is expected to make users' lives borderless by enabling them to spend up to 18 crypto and traditional currencies in real-time.

But there are some issues which can't be overlooked. For instance, the big fees for the withdrawals. The fee for withdrawing funds through an ATM is 2.5 euros and similarly, users will have to pay 3.5 euros plus a 3% commission per transaction.

As with all the 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. So, it seems that there is still some time before we consider crypto cards as the mainstream form of payment.

Julie Stephan Hacker Noon profile picture
by Julie Stephan @julie99. Technologist and product experience leader that bridges business, engineering, and design. Part time researcher.Read my stories

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