BitPay Launches a Prepaid Mastercard to Bring Spending Utility to Bitcoin And Other Cryptos

Bitcoin may be the most popular cryptocurrency, but acceptance of any digital currency is limited to just a few thousand merchants. Crypto processor BitPay Inc. on Thursday introduced a solution with a service that lets users spend their holdings via a prepaid Mastercard that features an EMV chip and contactless capability.

The BitPay Card, issued by New York City-based Metropolitan Commercial Bank, allows users of the BitPay app to convert Bitcoin and three other cryptocurrencies into fiat currency. They can then spend the dollars or other familiar currencies on the card at physical or online stores that accept Mastercard. “It’s a normal Mastercard [transaction] to the merchant,” says Bill Zielke, Atlanta-based BitPay’s chief marketing officer. The service also supports four stablecoins in addition to the quartet of cryptocurrencies.

To Zielke’s knowledge, the new Mastercard is the only one of its kind in the market, though he adds that it replaces a similar Visa card BitPay launched in 2016. The EMV and contactless technologies are among the new features for this successor card. Users are not charged conversion fees, according to the announcement, though users convert sums for use over time, not in discrete amounts to cover single transactions. BitPay offers a separate service for merchant clients that handles discrete transactions.

Use of the card requires the BitPay app, with merchant processing handled via an application programming interface from Galileo Financial Technologies Inc., a Salt Lake City-based financial-technology firm in the process of being acquired by challenger bank Social Finance Inc. for $1.2 billion.

Observers see the new card as a way to enable nearly universal acceptance for coins that until now have suffered from severely limited utility. “This is one of the ways to wring part of the value out of crypto,” says Ben Jackson, chief operating officer at the Innovative Payments Association, Washington, D.C., and author of the Payments 3.0 column for Digital Transactions magazine. 

Galileo, whose roots are in prepaid technology, should prove valuable for the new service, Jackson says. “Galileo’s API is an extension of what they’ve learned over years of being a prepaid processor,” he adds.