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If you’re new to cryptocurrency, then chances are you’re thinking ‘How do I spend it?’ After all, while great for transferring money, a large number of online shopping experiences require you to input physical card details. With transfer fees to consider, crypto doesn’t always make sense to the serious shopper.
There are several companies out there who offer physical debit cards linked to a cryptocurrency exchange, but for the people I have spoken to, they are worried about the physical security of the cash. So I was intrigued to learn that one such debit-card offering company Wirex, based in London, was recently granted UK Financial Conduct Authority approval. A pretty large rubber stamp in the grand scheme of financial security.
Why is FCA approval so important?
After the 2008 banking crash, the FCA became more stringent. Its job is to measure the security of the banking industry, enhance market integrity and protect it, as it is accountable to the UK treasury. Currently, it regulates over 56,000 financial services and markets, but new applications can take 12-months to approve and can only be done by submitting governance and monitoring paper works that underline the integrity of an organization.
It also means that holders that have been approved and granted a license can then create e-money accounts in over 25 different currencies allowing the possibility to trade securely around the globe.
Called the E-money License, recipients of the certificate can freely operate in 23 countries from the European Union as well as issue personal International Banking Numbers, legal ATM cards, exchange services and hold client funds in segregated accounts instead of company accounts.
The Wirex platform already supports over 50 altcoins including NEM, NEO, XRP and LTC and all can be easily converted to euros, dollars, and pounds at the point-of-sale thanks to in-app API.
To suit both high street and online shoppers, the network is integrated with Visa’s vast merchant network, making it possible to use cryptocurrencies in over 40 million outlets – something that could really bring cryptocurrency to the masses.
What is Wirex?
Wirex is a London-based company founded in 2014 and the first company in Europe to offer its clients free, physical debit cards that are linked to cryptocurrency accounts. The move means that blockchain and crypto technologies are finally able to enter the mainstream and become usable in real-world transactions.
As millennials and Gen Z consumers are becoming more significant consumers of banking products, the banking sector is seeing a shift towards online-only banking with clients expecting lower fees and more responsiveness from their providers. This paired with a growing interest in cryptocurrency means that a product combining both of these elements could be a very attractive alternative to other more traditional forms of banking.
Pavel Matveev, one of Wirex’s founders, explains the reasons behind it:
We live in the digital era, and financial services have to keep up with the times – crypto and new digital user experience is what will drive payments in this century.” As the popularity of cryptocurrency is growing and it becomes more accessible to consumers, the ability to spend cryptocurrency in the real world could be a game changer.”
International transactions made more affordable
The use of cryptocurrency for international payments is attractive because it cuts out the need for currency exchange, allowing people to use digital assets for payments in the traditional payment infrastructure.
Streamlining the integration of cryptocurrency banking with conventional banking will enable consumers to make transactions globally in the most affordable way at any given time. The ability to quickly pay for products or services being sold for traditional currencies with cryptocurrency using a standard Visa card will open up a wide range of uses for the money beyond its current home on the blockchain.
Companies such as Wirex are hoping that by cutting out the middleman of exchange rates and transaction fees, it will make paying for international purchases in cryptocurrency more attractive. With the impending uncertainty of Brexit and its effects on exchange rates, securing funds in cryptocurrency to be used for global payments could become an attractive option not only for individuals but also for businesses and large corporations.
How the technology will evolve
It is expected that banking options such as Wirex that are currently seeing as being groundbreaking will become increasingly mainstream over the next two to five years.
Wirex’s founders have said they hope to establish the company as a viable alternative to high-street banks, attracting customers with the ability to use conventional and digital currency seamlessly. There is also an ambition to make affordable banking available to those who currently cannot afford or who do not have access to conventional banking options, Wirex estimate this to be some 2 billion people worldwide.
Come and join Wirex! Sign up, buy some crypto using your credit/debit card, and earn free Bitcoin!
Copyright Forbes: Why Debit Cards And Visa Could Save Cryptocurrencies