People can buy goods using cryptocurrency-linked Visa cards, with rewards administered like airline miles
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Visa is partnering with 50 cryptocurrency firms to make it possible for customers to convert and spend digital currencies like Bitcoin at roughly 70 million merchants worldwide, even if they don’t accept cryptocurrency.
The global payments giant claimed customers spent more than $1 billion on crypto-linked Visa cards during the first half of 2021, with Visa being convinced the “crypto community” sees value in further integrating digital currencies with its global payments network.
The move will see Visa develop a series of payment card programmes with organisations like FTX and Coinbase, with their expertise combining with Visa’s treasury infrastructure to support blockchain-based payments.
“The merchants don't have to change anything,” Visa’s head of cryptocurrency, Cuy Sheffield, told Business Insider. “It will be the same as any other Visa transaction to them. But on the back-end, the crypto assets are instantly converted into fiat.”
“You have this growing number of consumers with assets on crypto platforms, trading crypto, holding crypto – and then you millions of merchants who don't really understand crypto. They don't want to have to update their point of sales and terminals and figure out what a blockchain is.”
The exact conversion mechanism, and whether there are any additional features, will vary depending on the exchange platform that supports the particular Visa card programme. Generally, however, Visa’s payments infrastructure will handle the instant exchange between fiat currencies and cryptocurrencies.
Users will also be able to benefit from rewards schemes that will see cryptocurrencies administered like hotel points or airline miles. Programmes will be modelled in a similar way to the BlockFi Rewards Visa Credit Card, which lets users spend conventional currency, and earn cryptocurrency rewards. Visa sees this as a means of engaging seasoned cryptocurrency users while opening the door to new adopters.
The announcement follows a series of moves the global payments giant has made in recent years to expand its support for cryptocurrencies. It follows companies such as Mastercard and PayPal also making inroads in the cryptocurrency ecosystem, with Visa keen to be at the centre of any trend that sees digital currency used on a much wider scale.
In March, the firm said it would allow the use of the stablecoin USD Coin to settle transactions on its payment network. The firm launched a pilot with Crypto.com and plans to expand this option to more partners later in 2021.
Previously, if a customer uses a Crypto.com Visa card to pay for anything, their digital currency held in a cryptocurrency wallet had to be converted to a fiat currency. The cryptocurrency wallet deposited traditional fiat currency into a bank account set to be wired to Visa at the end of the day to settle transactions.
Visa's move meant that it now uses the Ethereum blockchain to strip out the need to convert digital currency into traditional money for the transaction to be settled. The firm partnered with digital asset bank Anchorage to oversee the first payment, with Crypto.com sending USD Coin directly to Visa’s Ethereum address at Anchorage.
Keyword: Visa partners with 50 platforms to support direct crypto payments