What is a Bitcoin Debit Card?
In the developed countries more than 60% of the people own debit cards. Visa and Mastercards are the two biggest companies that support debit/credit card payments. This system became ubiquitous in the early 21st century.
There are financial organizations around the world that have designed Bitcoin or cryptocurrency Debit Cards. Bitcoin debit cards are actually issued by banks which works with the company that facilitates Bitcoin exchanges and wallets.
How does a Bitcoin Debit Card Work?
A Bitcoin Debit Card works like an ordinary Debit Card except the balance is deducted from the Bitcoin wallet rather than bank accounts. The cards are delivered to the customer in a physical form and virtual copy via an App.
Bitcoin Debit cards are issued by the banks that backs these companies and are licensed by Visa or Mastercard or both. The cards can hence be used to make apparent crypto-payments that is integrally linked with the current systems.
Benefits of Bitcoin Debit Cards or Pre-Paid Cards
Bitcoin Debit cards or Pre-paid cards are an efficient way to reduce cost for the merchants. An average Bitcoin transaction today takes around $3.25, the banks charge around the $3 (often) to $13 to the merchants. If globally employed Bitcoin Debit cards would decrease the total amount of transaction cost drastically which would also be affected by the updates in the Bitcoin protocol.
The value is stored in Bitcoin wallets instead of being held by banks which then create a credit system from the liquidity provided by the customers. The ledger stores the value independently and gives more control to the user, hence provides assurance of equality in the economy.
Bitcoin Debit cards are centralized to some extent given the companies acts as custodians of the cryptocurrency. This is however nothing new, we have trusted the banking system for far too long as well which works on a similar paradigm.
Listed below are some of the popular Debit Card Providers:
CryptoPay is a renown name in the Debit Card segment for Cryptocurrency founded in 2013. It supports EUR (Euros), GBP (British Pounds) and BTC (Bitcoins). They offer virtual and physical VISA branded cards that can be loaded with SEPA, UK FPS or BTC transfer. It is currently available only in Russia.
The company is registered in London and was founded by George Baziladze. CryptoPay was a popular Debit Card name not only in Russia but also in Europe. They provide their own wallet through an App. After the regulations were imposed by VISA which affected WireX, Xapo and CryptoPay, CryptoPay had earned the trust of its customers by transferring the amount held in the cards which were no longer valid in 24 hours.
CryptoPay is working to expand its reach and will soon begin operations in EEA, Singapore and Australia.
Bitpay was founded in 2011 is another popular Bitcoin Debit Card provider. BitPay has integrated various merchants and promoted a healthy cryptocurrency payment channel. On May 2016, the cards comes branded with VISA, hence the payments in Bitcoin/cryptocurrencies can be made anywhere Visa is accepted. The company claims to reaching 2,000,000 transactions in Dec 2016 itself. It has expanded its reach ever since. However, there have been bad reviews regarding their customer service circulating around the internet.
BitPay functions like a pre-paid card, Bitcoins are used to upload equivalent USD on the card which can be used to make payment. This can be done almost instantaneously by buying or transferring Bitcoins. Bitpay also aim to offer settlements of other direct cryptocurrency payments made from anywhere in the world to the domestic fiat currency of the seller for a mere 1% charge.
Shiftpayments or Shift (popularly known) is based in the United states of America which is more trustworthy than the others because it links the card balance to Coinbase/Dwolla accounts. Coinbase is the most popular Bitcoin wallet with experienced developers and top notch security. Shift was founded by Meg Nakamura and Eugene Otto in 2013. The company has engaged 38 million merchants from around the world to accept cryptocurrency payments.
Shift payments are available in separately in VISA or MASTER CARD and can also be linked to the Dwolla Wallet. Due to regulatory limitations, Shift cards can be ordered from 46 US states only, the excluded states are Connecticut, Georgia, Minnesota, Hawaii. There is also an App for iOS and Andoid that can be linked to the card which keeps the transaction records made from the card and updates balance related information.
WireX is one of the biggest names in the coin Bitcoin Wallet and Card Segment. They support USD, GBP, EUR and Cryptocurrency (BTC, LTC, ETH and XRP). They offer zero fee transactions and payments. The company has offices in London, Singapore, Tokyo, Delaware, Toronto and Kiev. The company boasts of having a customer base of around 2 million. The WireX card is currently available in Europe only but can be used anywhere around the world where VISA is accepted.
Apart from being one of the most cost efficient card system in the world it also offers a lucrative reward system that works on a referral scheme. The customer is rewarded in Bitcoins which is the first of its kind cryptocurrency reward scheme. Their website is quite user-friendly and informative. It provides easy seamless ordering and management of the Debit Card.
Below is a comparison table which has shown all the related costs of using these debit cards:
While choosing these Debit Cards we are trusting the Blockchain and the organizational system built on it. Thorough research about the total charges, annual fees, security and legal certificates must be done before ordering a cryptocurrency Debit Card. These Debit Cards are a step ahead of most of their rivals and hence are in light of of the authorities, instead of promising to shambling the system it aims to revolutionize the current one.