Bitcoin Debit Cards – All You Need To Know
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Bitcoin and other digital currencies came into existence with the aim of streamlining the financial sector and helping the average person gain financial freedom. However, one of the challenges faced in this quest is making Bitcoin more liquid. Simply put, liquidity is how fast and easy one can convert Bitcoins into conventional fiat money or buy goods and services with it. In the past, one had to go to a Bitcoin exchange, trade his/her Bitcoins into a certain amount of fiat currency and then transfer the fiat money into his/her bank account before spending it. This process is not only tedious and time-consuming but also inconvenient for the average person. To address this issue, entrepreneurs reacted by introducing Bitcoin debit cards. Before digging deeper into Bitcoin debit cards, let’s briefly point out how to acquire Bitcoins.
What is a Bitcoin debit card?
A Bitcoin debit card is a card similar to a regular debit card. This card allows you to top-up your Bitcoins onto it and then use it to make payments for goods and services anywhere in the world. Thus, Bitcoin debit cards eliminate the need for visiting exchanges every time you need to make payments with your Bitcoins. They also eliminate the need for transferring money to bank accounts which in turn saves the user the transaction costs incurred during this process.
What are the types of Bitcoin debit cards?
Typically, Bitcoin card service providers issue either a virtual Bitcoin debit card or a plastic bitcoin debit card. A virtual debit card is used for making online payments in places where Visa/MasterCard is accepted. This type of card is preferred by people who do not want to walk around with physical cards in their pockets. On the other hand, a plastic debit card is a physical card that is used for making both online and offline payments in places where Visa/MasterCard is accepted. Plastic debit card holders can also withdraw cash from ATMs all over the world, something that is not possible for virtual debit cardholders.
How do Bitcoin debit cards work?
Some Bitcoin debit cards hold your Bitcoin top-up in BTC and then convert it into fiat money instantly at the time of the transaction or payment. Other Bitcoin debit cards convert your Bitcoins from BTC to the preferred fiat currency at the time of top-up. In both cases, your Bitcoins are pulled from your Bitcoin wallet and converted to fiat money using the exchange rates in the Bitcoin market. After topping-up Bitcoins to your Bitcoin debit card, you can swipe the card at various card terminals to buy commodities in-store, or you can enter their numbers when shopping online. In both cases, only the amount of cryptocurrency spent during the purchase is converted to fiat currency and then wired to the merchant in a seamless process you aren’t aware of. Supported fiat currencies are mainly US Dollars (USD), Euro (EUR) and Great Britain Pound (GBP). This can, however, differ from one Bitcoin card service provider to another.
Why do you need a Bitcoin debit card?
Bitcoins are accepted directly by a handful of business organizations all over the world. However, debit cards such as Visa and MasterCard are accepted by virtually all businesses worldwide. A Bitcoin debit card links your Bitcoins to a debit card hence enabling you to use your Bitcoins anywhere in the world where debit cards are accepted. In short, you can spend Bitcoins even in places where the merchant does not accept Bitcoin payments. This streamlines payment using Bitcoins and is very handy especially for regular travelers and tourists. Here are other benefits of using Bitcoin debit cards:
- Enables you to hold a larger proportion of your money as Bitcoin; In places where the local currency is volatile or inflationary, Bitcoin debit cards are a life saver since you can hold large amounts of your money in the form of Bitcoins and spend only what you need. This also enables you to hold more than one fiat currency at a time since you can convert BTC to any fiat currency you prefer such as USD, EUR or GBP.
- Enables you to buy anything with BTC; Bitcoin debit cards enable you to spend your Bitcoin holdings in just about anything. From buying groceries, ordering pizza, paying for gas, paying for your travel and hotel costs, etc.
- A quick and cost-effective way of converting BTC to fiat currency; Bitcoin conversion is now painless and invisible thanks to Bitcoin debit cards. Conversion is also done at fair exchange rates and without extra transaction fees making it an unbeatable way of converting your BTC to fiat currency.
- Privacy and anonymity; Most Bitcoin debit cards enable you to remain anonymous especially when spending small amounts of money on your purchases.
- Flexibility; Bitcoin debit cards can be issued either virtually or physically. This allows one to access and use his/her coins even without a physical card.
- Incentives; Most Bitcoin debit cards offer reward schemes when using their cards which have proven to be more advantageous over spending cash.
What are the Bitcoin debit card fees?
Bitcoin card providers usually charge fees to their clients for the various services provided when using Bitcoin debit cards. There are different kinds of fees charged depending on the type of card issued and the transaction. Here is a list and a description of the various kinds of fees.
- Card issuing fee–This is an initial fee charged for issuing the card to the user. This fee is charged by virtually all Bitcoin card service providers. Card issuing fee varies from 5 USD to 15 USD for plastic cards and 0.5 USD to 3 USD for virtual cards.
- Annual fee – This is a service fee charged every year for using the card.
- Monthly fee – Most Bitcoin card providers have monthly service charges for using their cards.
- Exchange fee – This is the number of Bitcoins charged for converting Bitcoins into fiat currency. This fee is dependent on the exchange rate at the time of the transaction.
- ATM fee – There are two kinds of ATM fee depending on the location of the user when making the transaction. These are Domestic ATM transaction fee and International ATM transaction fee. The domestic transaction fee is the fee charged for ATM withdrawals made locally within the country where the service provider is based while international transaction fee is the fee charged for ATM withdrawals made in foreign countries. The domestic transaction fee is usually higher than international transaction fee. ATM fee is only applicable to plastic cards.
- Loading fee – This is the fee charged for topping-up Bitcoins from your Bitcoin wallet into the card. This fee is usually charged in terms of a percentage of the number of Bitcoins topped-up for instance 1 percent. This fee is applicable for both virtual and plastic cards. Some companies charge a higher loading fee for all top-ups made by third parties that are not affiliated with the company.
- Foreign transaction fee – This is a charge, usually 3 percent, for all transactions made abroad, that is countries apart from the country where the card was issued. This fee is applicable only for plastic cards.
How to choose a Bitcoin debit card?
Here we discuss some of the features and parameters to look for when choosing a good Bitcoin debit card. Later we will compare these parameters between different debit cards and then select the best Bitcoin debit cards to use.
- Fees – As aforementioned, there are numerous fees involved when using a Bitcoin debit card. Choose a debit card with average fees and one that best suits your needs. For instance, if you won’t be withdrawing money at ATMs, then it’s fine to choose a card with slightly high ATM fees but with top quality services.
- Reputation–The reputation of the company issuing the debit card is paramount when choosing a debit card. Use online sources to research about the company and find out what other users are saying about the card before settling on it.
- Anonymity – Some users usually don’t want the government or other people snooping on their financial activities. This is perfectly fine, and it’s one of the reasons why Bitcoins were invented. Some companies usually share their client’s data and information with the police and local governments as part of their policy. Hence, it’s important to check this out and ensure your privacy is protected by using a given card.
- Supported countries–Always check if the particular card you’re about to choose is issued in your country. If you’re a traveler, ensure the countries you visit frequently are also supported to avoid any inconveniences.
- Limits – Typically, different companies have different limits in terms of loading amounts, ATM withdrawal amounts, online transaction limits and so on. Always check out this information before settling on a given card.
- Features – Other important features to look for include supported fiat currencies, incentives, online payments and if the card can be connected to other payment options such as PayPal. Another relatively new feature is card unloading which allows you to unload coins after topping-up. Comparing these features will help you select the best BTC debit card to use.
What are the best Bitcoin debit cards to use?
More than 30 different Bitcoin debit card options are available from different companies out there. Some of the best companies offering Bitcoin debit cards include:
Wirex, previously E-Coin, is a UK-based company with offices in London, England, and Tokyo, Japan. The company was started in 2014 and has been issuing debit and pre-paid cards ever since. The company offers both plastic debit cards at a fee of 17 USD and virtual debit cards which are issued for free. Wirex charges a monthly service fee of 1.50 USD, a domestic ATM fee of 2.50 USD and an international ATM fee of 3.50 USD. It supports payments in USD, EUR, and GBP. Wirex also offers a fully-featured mobile app which users can use to create and manage their Wirex accounts and a Bitcoin wallet for storing coins.
Monaco is a Swiss company that offers a Visa card, mobile application and a web platform all of which enable users to exchange and spend different cryptocurrencies anywhere in the world where Visa cards are accepted. Monaco currently supports 23 different cryptocurrencies and is supported in 120 countries worldwide. It charges a 1 percent flat transaction fee for all transactions and does not charge any annual or monthly maintenance fees. In addition to this, Monaco offers free shipping for all the Visa cards they offer. Currently, Monaco only offers a physical card hence there is no virtual card. Monaco offers a range of different physical cards to choose from which are either plastic or metallic.
Founded in May 2011, BitPay is an American based company that provides payment services mainly for US and European citizens. BitPay’s Visa debit card is issued by Metropolitan Commercial bank for US citizens and Wavecrest Holdings for European citizens. It’s the first Bitcoin debit card available for US citizens in 50 states in the country. The card costs 10 USD to order and charges a 2.25 USD for domestic ATM withdrawals and 2.75 USD for international ATM withdrawals. All Point of Sale (PoS) services are free, and all foreign transactions attract a 3 percent fee. BitPay also offers a mobile application for users to manage their cards on the go.
SpectroCoin is a company based in Vilnius, Lithuania, that offers both virtual and plastic debit cards that can be used in over 20 million shops and outlets worldwide. The debit card supports cryptocurrencies such as BTC and DASH among others. Spectrocoin cards can be loaded with either USD, EUR or GBP. Spectrocoin’s physical card costs 5 USD/EUR/GBP while virtual cards are sold at 0.5 USD/EUR/GBP. Spectrocoin charges a top-up card fee of 3 EUR and a monthly service fee of 1 EUR. Local ATM withdrawals cost 2.25 USD/EUR/GBP while international ATM withdrawals cost between 2.75 EUR to 3.50 EUR. Foreign transactions attract a flat fee of 3 percent.
ESR Wallet is a universal payment and credit service that offers a prepaid plastic MasterCard and virtual card for its users. The company was founded in 2017 and is currently based in Ras Al Khaimah in the United Arab Emirates. ESR Wallet issues a plastic debit card for 5 USD/EUR and 1 USD/EUR for the virtual card. Both cards attract a loading fee of 0.99 USD/EUR and a domestic ATM withdrawal fee of 1.99 USD/EUR. Withdrawals made to ESR Wallet are free, and there are no monthly or annual service fees for cardholders. ESR wallet also charges an exchange fee of 2.95 percent and a card issuance fee of 9.99 USD/EUR. Supported cryptocurrencies include BTC, BCH, LTC, DASH, ETH, and ZEC while supported fiat currencies are USD and EUR.
Cryptopay Visa Debit Card
Cryptopay is a company registered in England and Wales that was founded in October 2013. It’s the oldest and most established Bitcoin debit card provider in the world with over 23,000 cards issued. It offers both a virtual and a plastic prepaid card that can come either as a USD card, EUR card or GBP card depending on the preferred currency. The card costs 15 USD/EUR/GBP to acquire and attracts a monthly service fee of 1 USD/EUR/GBP. Domestic ATM transaction fee is 2.50 USD/EUR/ 2.25GBP while international ATM transaction fee is 3.50 USD/2.75 GBP. Cryptopay charges a standard loading fee of 1 percent and a third-party loading fee of 1.99 percent. Foreign transactions attract a flat fee of 3%.
In a Nutshell
Bitcoins are now finding meaning for everyday users thanks to the integration of Bitcoins into already established payment channels such as Visa and MasterCard debit cards. Using Bitcoin debit cards brings power back to the user since it enables even the unbanked to quickly and easily make payments while also enjoying the benefits of using cryptocurrencies such as security, anonymity and low transaction fees. In the future, we will witness even cheaper fees, improved usability and better user experience as more entrepreneurs hop into this space.
I hope this article has been able to answer your questions in regard to Bitcoin debit cards. Kindly visit our site for more curated content on cryptocurrencies and blockchain technology; we are committed to being part of your growth in crypto investments by providing you with a wide scope of crypto-related coverages.