Cryptocurrency has become a viable payment option across many countries. Crypto cards have increased cryptocurrency usability by providing ease of spending it. Many crypto cards are available in the industry with different terms and conditions. Today we will find out what kind of transaction can be done using crypto cards.
What are crypto cards?
Crypto cards are payment cards that function the same as regular bank cards. But with these cards, you spend cryptocurrency on goods and services. These cards are available as crypto credit and debit cards. Users can earn certain cashback of up to 8% and perks for making purchases with these cards. Cryptocurrency credit cards work with the same principle, as traditional credit cards, except that they receive funds and pay rewards withdrawn from a digital wallet, as these cards aren’t connected to any bank account and aren’t controlled and held by financial institutions. Crypto credit card transactions are made by using an anonymous alphanumeric address, which changes with every transaction eliminating any risk of identity fraud.
The most popular crypto cards are Crypot.com debit card, BlockFi credit card, Coinbase Debit card, Binance Debit card, etc. Each card has different fees, limitations, and rewards structures. But most of the crypto cards do not charge annual fees, zero to low ATM withdrawal fees, zero foreign exchange fees. While with some crypto cards, you can use both crypto and fiat currencies. But for this, your card must support both.
How do crypto cards work?
Visa and MasterCard support crypto cards, so they have the same regulations and restrictions.
You must connect your card with a wallet, either your personal wallet or the platform’s dedicated wallet, for using a crypto card. By doing this, your crypto assets get connected to your card. After this, your card is ready for use.
With crypto cards, you do not directly pay with your cryptos. Instead, your card provider fetches your assets from your account converts them into fiat currency. Then the fiat currency is paid to the retailer. This all happens within fee seconds, making crypto cards convenient for purchases.
What kind of transactions can be done using crypto cards?
Crypto cards can be used at any retailer that accepts Visa and MasterCard payments, including food, clothing, grocery, accessories, online payment, etc.
Let’s consider the example of a Binance crypto card to understand what transaction you can make with a crypto card.
Binance, in cooperation with Swipe, offers Binance Swipe Card, which is a Visa debit card and can be used worldwide where Visa payments are accepted. It is a debit card that requires you to top up your card with the cryptocurrency of your choice for using it for purchases.
Using the Binance Swipe card, you can make the following transaction to retailers that support Visa.
Chip and PIN card payments
For this transaction, you insert your card in the terminal and input your PIN.
Magnetic Stripe card payments
You can make payment by signing the sales vouchers for the merchants who do not accept Chip and PIN card payments.
Contactless card payments
You can make payments by waving your card over a contactless card reader.
Mail order or telephone order card payments
Provide the necessary card details requested by the merchant and get your transaction done.
ATM cash withdrawal
Use your card to withdraw cash by inserting your card and entering a PIN at the ATM, like regular cards.
You can make E-wallet payments by adding your card to Samsung Pay, Google Pay or Apple Pay wallets on your mobile phone. The wave your mobile over a contactless card reader. These payments may involve biometric authentication.
Transaction not supported by crypto cards
Though users can make any transaction using crypto cards, some card issuers put certain limitations. The following are some activities for which crypto cards cannot be used.
- You cannot use BlockFi credit card for:
- Wire Transfer Money Orders
- Government licensed casinos
- Government-owned lottery
- Securities- Dealers/Brokers
- You cannot use Crypto.com Visa debit card for:
- Gambling services
- Cash advances
- Payments for financial institutions
The Bottom Line
Crypto cards have added the convenience of spending cryptos by providing an alternative over Bitcoin ATMs. Each crypto card is unique, with its own features. You can earn crypto cashback on your purchases. However, these cards are not allowed for certain payments, i-e illegal activities, due to several compliance reasons. Moreover, third-party ATMs do not support these cards except VISA and Mastercard. Therefore, you must do some research before choosing and using a crypto card. Always choose the one that offers multiple features without compromising security.