A payment card that allows you to spend cryptocurrency anywhere in the world and at most merchants. This concept appeals to Visa and Mastercard issuers. For two years, both companies have been looking to partner with cryptocurrency exchange platforms that manage several million cryptocurrency wallets to equip them with a payment card.
This week, Mastercard CEO Michael Miebach announced that he is working with Binance to soon provide a compatible payment card to more than 90 million merchants worldwide. For him, cryptocurrencies are a great way forward, and the blockchain industry will already reach a certain maturity within a maximum of 5 years. As a result, by 2027 there will no longer be international registry systems such as SWIFT.
Mastercard has already worked on cryptocurrency payment cards with other platforms and is now taking on Binance. As with the neobanks, Mastercard is at war with Visa. The two issuers regularly alternate positions with partner companies. Currently, Visa already offers a Binance payment card. It is difficult to say whether the current work between Mastercard and Binance will lead to the displacement of Visa from the crypto platform.
Cryptocurrency payments without crypto
In France, Ledger is also working on a payment card for its customers and their physical crypto wallet. The hardware is experiencing a bit of latency, while card issuers should not prioritize the French nugget, given that the number of clients is much smaller than platforms like Binance, Coinbase, FTX or Crypto.com.
It is important to note that these so-called “crypto cards” do not pay merchants in digital currency. In fact, Visa and Mastercard are developing cards that convert the amount requested by the merchant into fiat currency during each transaction. Cryptocurrencies stored in the client’s crypto wallet are converted into euros or other fiat currency so that the seller can accept it.
The big advantage of crypto cards are the ceilings, which are much higher than in a traditional bank. On the other hand, the exchange between cryptocurrency and fiat currency is important to consider from a tax point of view. As a reminder, you are only subject to capital gains tax in cryptocurrencies if you convert them to fiat currency. An important point to be taken into account.
Please also note that the current Binance Visa card available to French customers does not accept Bitcoin payments. To be able to use the card on a payment terminal, you must use a wallet containing BNB, BUSD, USDT, BTC, SXP, ETH, EUR, ADA, DOT, XRP, AVAX, SHIB, LAZIO, PORTO or SANTOS.