on the crypto
Cryptocurrency lending company BlockFi has taken its first step into the payments space.
BlockFi ready to launch the revolutionary credit card
BlockFi, the New York City-based company known for its lending operations, crypto interest-bearing products, and trading desk, announced this week that it will launch its long-awaited bitcoin credit card. buy bitcoin) in the first quarter of next year.
CEO Zac Prince said the credit card will be the first of its kind in an industry that's already saturated with bitcoin debit cards. “Many of the existing debit cards in the crypto ecosystem are geared around the idea that a user wants to spend their cryptocurrencies, which at least BlockFi's customers aren't interested in doing,” Prince said in an interview.
"They want to keep their bitcoin and earn a return on it." While BlockFi is working on features that will allow users to pay off their BlockFi credit card debt with cryptocurrencies, Prince said the company will encourage customers to use the card for daily grocery shopping, not for accumulating debt. BlockFi's loan interest rates are much better than the annual percentage rates on the credit card, Prince added.
Launch delayed due to COVID-19
The cryptocurrency lending company is rolling out the new product about a quarter behind its original schedule due to the effects of the COVID-19 pandemic that has forced many of its partner associations to work from home.
"It is necessary to work with some partners to bring a credit card to market," Prince said in August of this year. "Some of them haven't really managed the transition from being fully in charge to being completely remote as easily as companies like BlockFi have."
Visa acts as the card issuing network, Evolve Bank & Trust provides the bank identification number (BIN) which allows BlockFi to connect to the payment network, and Mererve manages the payment flow technology.
BTC cashback
The card pays in dollars but earns bitcoin rewards. The rewards received consist of 1,5% of fiat purchases and the users who receive the bitcoins deposit them in their BlockFi accounts. The annual fee to hold the card is $ 200.
For the first year, BlockFi offers users who spend at least $ 3.000 on the card in the first three months a $ 250 bonus. Revenue for BlockFi will come in part from the interchange fee (which will be split between premiums and customer revenue), in part from the annual fee, Prince added.
"This will add payment receipts as a category" to the budget, Prince said. "Payments are generally a kind of revenue that gets pretty healthy multiples in the capital markets." Since the credit card is a premium Visa card, BlockFi plans to offer more credit and debit cards in the future that are also tied to crypto customer accounts.
