Current Selection of Crypto Cards Under Fire: The Fees Are Just Not Worth It (Yet)
Crypto debit cards became quite a hit when they appeared a few years ago. This is completely understandable, considering the hype regarding cryptocurrencies at the time. Digital currencies were just emerging from the shadow, and promising people security, ever-surging prices, and the ability to spend these new and interesting digital assets wherever they want.
Some cardmakers, even the biggest ones, such as WaveCrest, did not receive a warm welcome by Visa after that. However, there were a few who managed to make it through this period, and crypto card users got as close to using digital currencies in their everyday lives as they could. In fact, many believed that mainstream adoption is just around the corner, as connecting crypto wallets to physical debit cards and having the ability to use the coins was considered a done deal.
However, it was not long before people started realizing that things are quite far away from perfect. That using cryptocurrencies via debit cards does not seem to work as expected. Of course, they were perfectly able to pay with cryptocurrencies. What they didn't expect were enormous fees that came along.
The Cost of Using Crypto Cards
Simply put, paying for something with Bitcoin came at a quite high additional price — a price that grew larger if users made larger purchases. Paying a £100 bill would result in a total of £102.50 just for the benefit of using the card. Of course, this does not seem like much — what is £2.50 when people are ready to pay £100 for a dinner or a wide selection of items. But, as they kept using the card, the extra fees kept piling up, eventually showing just how high the cost of using cryptocurrencies is.
Soon enough, the hype regarding the cards started dropping, and so did orders, which is particularly obvious in the UK, where Coinbase's Visa cards were recently issued. Of course, this is not only the situation with Coinbase — BitPay's card saw similar reactions due to their 2% loading fee. While it does not charge transaction fees, people reacted pretty much the same.
It quickly became clear that crypto cards are not the key to adoption, at least not the way they are right now. The public was quite skeptical about them — and cryptos — from the start. Charging extra fees and making them more expensive than regular cards was not the right way to go. Despite the fact that they bring additional privacy, the offer was just not attractive enough for regular people who cannot afford such costs.
In the end, many started considering these cards as rip-offs, and attractive marketing stunts. Crypto enthusiasts around the world were thrilled when they got the chance to use them, and all they ended up with is huge costs of doing so. Of course, not everyone thinks so, and there are those who believe that extra cost is not that bad. They don't necessarily like it, but they are still willing to continue paying overpriced fees in order to avoid government surveillance. Some even consider it the novelty right.
Crypto Cards may still be a key to Adoption
Of course, blaming the card companies is not as easy and straightforward, either. The fees are as large as they are, but this is likely because MasterCard required extra payments for the privilege of having them as a partner of crypto-related firms. That is also understandable, considering that the world of institutions still frowns down on crypto, as well as those who work with them.
As for Coinbase, the company can pretty much charge as much as it wants, considering that it has no competition in the US. With that in mind, there is yet hope, as new, better offers might arrive in the future. Companies like Gemini and Bakkt might start their own payment processing systems in the future, and firms like Microsoft and Starbucks openly support them.
At the same time, many expect that the Lightning Network will bring a much cheaper way of making transactions, and it will likely not be long before a new solution arrives, one that would connect all of these firms and other aspects into a working crypto card. Until then, however, users should be careful as to what they use their cards for, as the price of using them comes in addition to the price of what they are using them for.