Soon enough, paying with cryptocurrencies will likely become a common gesture as more and more companies are jumping into offering crypto credit and debit cards. Competition in this niche is rising, and not only among cryptocurrency companies. Traditional payment networks like Visa and Paypal are getting ready to offer Bitcoin (BTC) payments as well.
There is hardly a better example of cryptocurrency mainstream adoption than having a crypto credit card in your pocket. A crypto card is geared to make the whole process of spending your digital assets seamless. Also, it gives an actual use to your crypto, rather than sitting idle in a wallet.
Simply speaking, if you wanted to pay with your Bitcoin, you’d have to exchange it for fiat first. That process would incur exchange fees, and in some cases even withdrawal fees. A crypto card provider takes care of that process for you.
Cryptocurrency credit and debit cards have been on the market’s radar for some time. During the 2017 initial coin offering euphoria, several projects like $MCO received millions of dollars in funding to launch their crypto debit cards. Forward until 2020, and now we have several serious companies already established.
Industry leaders enter the crypto card niche
Back in early July, Binance announced the purchase of Visa card startup Swipe. This move is an apparently loud declaration of intentions from Binance to become more than a cryptocurrency exchange, and can potentially bring in millions of dollars in liquidity to the platform. Commenting on the development, Binance CEO, Changpeng Zhao, said:
“By providing a tangible way to transact, convert, and spend crypto for everyday use, we are furthering our mission of making crypto more accessible to the masses. Giving users the ability to convert and spend their crypto directly with merchants around the world, will make the crypto experience more seamless and applicable.”
The United States-based crypto exchange Coinbase was the first cryptocurrency company to become a Visa principal member. The company piloted their card program in the United Kingdom back in 2019, and it’s slowly reaching other countries. Zeeshan Feroz, CEO at Coinbase UK, wrote:
“Customers can use their card in millions of locations around the world, making payments through contactless, Chip and PIN, as well as cash withdrawals from ATMs. When customers use their Coinbase Card, we instantly convert crypto to fiat currency, such as GBP, which is used to complete the purchase.”
Revolut is showing a different approach toward crypto than the companies mentioned above. While the previously mentioned companies are expanding their offers, Revolut has rather narrowed it.
But there’s a catch. Unlike previous companies, Revolut users do not actually own their crypto. At least not in the same sense as it’s common with crypto. First of all, there’s no wallet or private keys to handle. All the crypto in Revolut is in a kind of common pool, and ownership is tracked in Revolut’s internal ledger.
Users can’t send their crypto outside of Revolut, and since the latest change in policy in June 2020, they can’t even pay directly with it. On the positive side, Revolut gave its users legal ownership of future cryptocurrency purchases.
A good demand from customers
Kris Marszalek, CEO of Crypto.com, one of the top players in the crypto card niche, told BeInCrypto that the crypto credit card sector sees a good demand from customers and the market is growing. According to him, crypto users are asking for crypto payment cards across the world, as this financial tool “acts as a bridge from the traditional financial world into crypto.”
Crypto users face many different challenges when trying to buy, sell or just spend their cryptocurrency, including price volatility, slow transaction times, and regulatory issues, among other things. However, one of the biggest issues here is that a very small number or merchants accept cryptocurrency as payment. Marszalek commented:
“Crypto cards offer users a physical financial tool that’s familiar, easy to use, accepted anywhere and can be used to purchase anything. This, coupled with the strong rewards and perks crypto cards like ours offer, make them incredibly attractive, especially as more people turn to crypto markets amidst the global economic uncertainties.”
When asked about the crypto card payment market evolution in the next few years, Marszalek said: “In one word: growth. Bitcoin’s recent bull run and the strong performance of crypto markets in 2020 bode very well for the card market moving forward, as we’ve seen many new users enter the crypto ecosystem and cards present a very familiar onramp for these users.” He continued:
“To compete with each other and attract new users, crypto card companies are rapidly expanding their perks, rewards, features and into new markets, while simultaneously the traditional financial world, i.e. JP Morgan Chase, and central governments around the world are rapidly warming up to crypto, paving the road ahead for an expansion of the broader market.”
Marszalek forecast a significant growth in terms of new users, transactions, rewards and support from mainstream finance in the coming years. “As with any global financial company, we’re in a regulated industry that requires significant compliance, security and privacy standards in place,” he added.
The big players are coming
As seen above, cryptocurrency companies are in a good place to gain a good share of the crypto card market. But they shouldn’t rest on their laurels. Big payment networks like Visa and Paypal are getting ready to offer cryptocurrencies themselves.
Visa is moving faster than many would think. The financial giant is gathering valuable know-how in crypto and has a dedicated blockchain team. They recently released an announcement regarding digital currencies:
“We believe that digital currencies have the potential to extend the value of digital payments to a greater number of people and places. As such, we want to help shape and support the role they play in the future of money.”
Visa continued pointing out that regulators and policy leaders still have questions and concerns regarding digital currencies on a number of issues such as consumer protection and payment resilience. The company believes that the best way to address those concerns is to work collaboratively with leading companies and the public sector.
Another big player moving in the same direction is PayPal. The digital payments network is collaborating with the European Commission to develop a legal framework for crypto assets. In a letter to the European Commission, PayPal stated:
“PayPal is continuously monitoring and evaluating global developments in the crypto and blockchain/distributed ledger space. Of particular interest for us is how these technologies and crypto assets can be utilized to achieve greater financial inclusion and help reduce/eliminate some of the pain points that exist today in financial services.”
Visa and PayPal are just two of the big names that are getting ready to offer cryptocurrency services. When they do, their extensive debit and credit card offerings might eat up most of the current market.
Best case scenario, they will bring cryptocurrency to their millions of users, and that in turn might make the total market cap valuation of crypto to go into the trillions of dollars.
When the big players arrive, native cryptocurrency card providers will likely have to fight hard to maintain their dominance. In any case, this competition brings a bullish sentiment to cryptocurrency, and hopefully, lots of capital too.
The post Crypto Cards as Another Step Toward Mass Crypto Adoption appeared first on BeInCrypto.