The advent of blockchain technology has largely contributed to the evolution of the cryptocurrency market with more than 10,000 listed coins in the market. To facilitate faster transactions and wider acceptance, crypto payment cards have come in handy to bridge the gap for consumers who wish to spend their coins. Until recently, cryptocurrency holders have been using the services of other exchanges that act as intermediaries between the buyer and the seller to get fiat currency.
How Crypto Prepaid Cards Work
Crypto prepaid cards allow the crypto holders to access their coins from their wallets and conveniently make payments to the goods and services, without having to go through exchange platforms to exchange them for fiat.
The current method requires the holder to sell the cryptocurrency on the exchange and wait for the funds to be transferred over to their personal bank account before they can spend it – a time-consuming process that could take days.
Crypto prepaid cards are simple and straightforward as they are linked to the wallet. The users, therefore, move their crypto coins from their wallets to the prepaid cards where they can readily spend them.
With technological advancement, the crypto exchanges can issue their own Visa cards, allowing a user to have a crypto exchange card that is also a Visa card. So customers may go into any store and pay with crypto, which will be instantly converted to AUD or local currency based on the exchange rate, and the merchant will receive regular AUD.
Crypto Transactions in Australia
In a country like Australia, the transactions have a denomination of Australian dollars and all the transactions are channelled to the bank as well as to the payment providers. It is worth noting there are other international providers, especially ones that utilise the Singaporean dollar and the United States dollar. These providers have strongly influenced international fees because of the massive use of the crypto prepaid cards in making daily purchases.
In Australia, interest in cryptocurrency ownership is fast growing. Research from Finder in January 2021 revealed that 1 in 4 people (25%) invest in or plan to invest in cryptocurrency. Similar findings from YouGov reported that around four million Aussies say they are likely to purchase cryptocurrency in the next 12 months.
However, cryptocurrency as a means of payment is still in its infancy in Australia. The proliferation of fintech innovation, such as in the case of Novatti and Visa-backed CryptoSpend, is set to change the scene. CryptoSpend’s entry into the market will be the first time cryptocurrencies can be spent using a payment card issued in Australia that runs on the Visa network, making it easier for users to spend cryptocurrency to pay for everyday items. Their features include:
Market Challenges and Future Opportunities
Crypto prepaid card providers have to deal with a raft of measures that have the potential to impede innovation, for instance, the taxation laws that threaten the market within the crypto industry. It also faces the herculean task of having to convert the entire financial system of the world to the crypto model despite the industry having massive growth with blockchain technology being wisely embraced.
Despite the challenges, the innovation towards crypto payment acceptance has more benefits to the users like reduced transaction cost, as well as opening the untapped avenues that would widen the market for the retail traders with the crypto-supported means of payment.
How Novatti can Enable your Crypto Business
If you are a fintech looking for a payments solution in cryptocurrency, Novatti can partner with you from ideation, build, test to launch and beyond.
As there is a lot of interest in enabling crypto to make payments online or via point-of-sale, Novatti works closely with clients to cover all aspects of their value proposition.
Through Novatti’s Real Time Funding™ solution, we can authorise the transaction in seconds – from pointing back at the exchange and the crypto holders account to make funds available to pay in real-time.
By offering a branded crypto Visa card and digital wallets, crypto companies seeking disbursements can tap into an ecosystem where they can create their own spending rules and brand loyalty.
A very important piece of the puzzle is navigating around complex compliance requirements, including AML/CTF and KYC/KYT or “Know your Customer/Transaction”. Our focus is to help businesses to comply with local and global regulations, and protect their customers from fraudulent activities.