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The drive to encourage consumers to use cryptocurrency to pay for transactions at the point-of-sale shifted into a higher gear Wednesday as BitPay Inc. announced the launch of a cash-back rewards program for its prepaid card.
Cardholders, who will be automatically enrolled in the rewards program, can earn up to 15% cash back on purchases made with the card at participating merchants. To use the card, consumers must download the BitPay Wallet app, which allows them to reload value onto the card using cryptocurrency. In addition, cardholders can use the app to view transaction history and manage card settings. A virtual version of the card can be used with Apple Pay and Google Pay on mobile devices.
Cardholders can also load the BitPay Card, which automatically converts cryptocurrency into dollars when making a purchase, from their Coinbase account. In addition, the BitPay app allows cardholders to access available deals when shopping such brands as Adidas, Costco, Office Depot, and Finish Line.
To help entice consumer adoption of the BitPay card and its rewards program, BitPay will deposit $10 into the account of cardholders who refer new prospects. BitPay is launching the rewards in conjunction with Cardlytics, which operates rewards programs for financial institutions and whose merchant network spans such categories as retail, dining, entertainment, and travel.
“Cryptocurrencies are becoming increasingly popular and widely used as many like the option to live life on crypto,” BitPay chief executive Stephen Pair says in a prepared statement. “Adding a reward program through Cardlytics offers crypto enthusiasts another incentive to get and use the BitPay Card.”
While offering a cash-back reward should help BitPay move the dial when it comes to consumer’s use of cryptocurrency at the point-of-sale, questions abound as to whether the program will encourage merchants to accept cryptocurrency for purchases, says Tim Sloane, vice president of payments innovation for Mercator Advisory Group, a Marlborough, Mass.-based consultancy.
“Since this is a Mastercard-branded card that converts crypto into fiat currency, merchants really aren’t accepting cryptocurrency as much as they are accepting Mastercard,” Sloane says.
Other questions also arise about who will fund the rewards and how disputed transactions will be handled, Sloane says. BitPay could not be reached for comment and Cardlytics did not immediately respond to questions.
Despite the questions surrounding the structure and working of BitPay’s rewards program, Sloane adds the program’s rewards are quite rich and likely to appeal to consumers who own cryptocurrency. “You would be hard-pressed to find cash-back rewards of up to 15% any place else,” Sloane says, adding, “This should help move the dial,” when it comes to enticing consumers to pay with crypto at the point of sale.
