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Its original proposition was offering Bitcoin acceptance to merchants, but now BitPay Inc. is adding a reloadable Visa prepaid card to its consumer-facing products.
The card provides utility to merchants and consumers in that it will enable cardholders to make purchases at the millions of Visa-accepting merchants in addition to the relative handful that accept Bitcoin, the best-known virtual currency. Why the greater focus on consumers from a processor that last year provided Bitcoin acceptance to about 60,000 merchants?
“This is an extension of our focus on bringing Bitcoin users and merchants together,” a BitPay spokesperson says by email. “One of our main missions as a Bitcoin payment processor is to make Bitcoin every merchant’s favorite form of payment. This card lets us leverage our payment-processing technology to give Bitcoin users another way to get the most out of their Bitcoin.”
The card won’t be BitPay’s first consumer-facing product. The Atlanta-based firm already offers its own Bitcoin wallet called Copay. The new card, issued by New York City-based Metropolitan Commercial Bank, can be loaded from any Bitcoin virtual wallet or by direct deposit. Balances are denominated in U.S. dollars.
The card has a number of fees, but most of them apply to dollar-based transactions rather than Bitcoin. A $9.95 fee, payable via Bitcoin, is charged to get a new card, which can be ordered online. After that, there are no reload fees or Bitcoin transaction fees in the U.S. But ATM cash withdrawals incur a $2 fee, and automated clearing house debits are charged $5.
Fees for cash reloads through Green Dot Corp. or The Western Union Co. locations vary, but can go up to $4.95.
“Our pricing is competitive with similar cards in the prepaid space, and with 0% fees for Bitcoin top-ups, it’s favorable,” says the spokesperson.
The spokesperson would not give details of the company’s marketing plan for the card, but indicates it initially will be focused on consumers familiar with virtual currency.
“We want to get this card into the hands of the Bitcoin community first, so right now we’re focusing on grassroots engagement with many of the same people who already pay BitPay invoices at checkout or use our Bitcoin wallet Copay,” he says.
BitPay’s card joins at least one other major-brand prepaid card in the virtual-currency space. Last November, Bitcoin wallet provider Coinbase Inc. introduced the Shift Card, a Visa-branded card also issued by Metropolitan Commercial Bank and managed by independent sales organization Shift Payments. Coinbase calls the Shift Card the first U.S.-issued Bitcoin prepaid card.
Metropolitan Commercial Bank did not respond to a Digital Transactions request for comment.
—Jim Daly
