For the first time in history, a major credit card company is working hand-in-hand with one of the world’s leading crypto exchanges. Visa has granted full membership benefits to Coinbase – one of the largest and most popular crypto trading platforms in the United States – and is allowing the company to begin issuing cryptocurrency-based debit cards to its customers.
Coinbase and Visa – Together At Last?
The cards are being released starting this month, though the partnership was initially announced last December. What’s even more impressive is that Visa is removing all middlemen from its processes, allowing users to transfer bitcoin, Ethereum (ETH) and Ripple (XRP) immediately to their cards for spending. Thus, the cards are entirely in the possession and under the control of their users.
Zeeshan Feroz – the CEO of Coinbase UK and the figure who received the membership – stated in an interview:
Your bitcoin holdings have never been liquid because you have to sell them. You need to go through a process, withdraw the money and then spend it. It’s never been an instant, ‘Oh, I’ll buy this cup of coffee with bitcoin.’ What the card is trying to change is the mindset that crypto is tucked away, takes two days to access, and can now be spent in real time… A direct membership gives us more cost efficiency, and ultimately, as we scale the program, the goal is to pass those cost efficiencies to our customers… Being a principal member of Visa actually extends beyond just the issuing of cards.
Coinbase allegedly saw about 40 percent less business in 2019 than it did during the previous year. This makes sense in many ways considering 2019 started out on a lowly note where bitcoin was trading at a measly $3,500.
While the currency eventually rose up throughout the remaining 12 months, it still ended on a rather unspectacular note, and 2018 – while technically worse for bitcoin – was still riding on the heels of 2017, which is widely considered the best period for bitcoin and the moment when the currency reached its all-time high of nearly $20,000 per unit.
Still, the company is likely looking for more ways to increase its revenue streams, and the issuing of credit and debit cards (which is likely to come with fees) could be a way to do this.
It also doesn’t matter if the customer is using their card with a retail merchant that doesn’t naturally accept crypto. The card is accepted anywhere Visa is accepted, and the digital currency is automatically transferred into fiat upon the purchase point.
Giving Power Back to Users
Terry Angelos – Visa’s global head of fintech – later explained:
Our work with…Coinbase includes helping them scale, partnering with them on issuance and giving them access to APIs so they can build new products on our network.