The world’s largest cryptocurrency exchange, Binance, has launched a line of Visa cards for customers in the European Economic Area (EEA). The EEA includes all the 27 European Union (EU) countries plus Iceland, Liechtenstein, and Norway but not Switzerland. The United Kingdom’s membership within the EEA may end on 31 December 2020, depending on the outcome of Brexit negotiations.
Customers will be able to use their Binance Visa card just like a normal debit card to charge against crypto assets in their Binance account and can use the cards at all 60 million locations around the world that accept VISA. Binance says it will not charge any subscription or maintenance fees and zero transactions fees for payments made in Euros.
To promote the new product, Binance are offering up to 8% cashback on all purchases, dependent on the level of BNB coins in your account.
How it works
The new Binance VISA card is powered by the popular payment platform Swipe and supports Binance Coin (BNB), Bitcoin (BTC), Swipe (SXP), and Binance USD (BUSD). Both a physical and virtual card is available, so you can also use it to make NFC payments on your phone via platforms like ApplePay or GooglePay.
Rather than link directly to your Binance trading account, Binance card customers will get their own virtual Card Wallet to top up with assets from their Binance account. At the point of sale, it converts crypto assets into the fiat currency of choice to pay the retailer. However, Binance have not yet released any details regarding currency conversion rates – so we’ll be interested to see the true financial viability of the system.
Crypto VISA cards: a terrible history
Several other cryptocurrency platforms have tried to launch VISA cards, with most failing to find much success with the endeavour. In June this year, major crypto exchange Crypto.com had to cancel its VISA card offering when third-party provider Wirecard was suspended by the UK’s Financial Conduct Authority (FCA). The suspension followed reports that the German company was missing $2.1 billion worth of company funds, which eventually led to it filing for insolvency.
Back in 2018, a similar situation unfolded when card provider WaveCrest terminated its contract with VISA. The result was an immediate cancellation of all Wavecrest-issued VISA cards, many of which were linked to cryptocurrency wallets via platforms like Wirex, TenX, and Cryptopay.
Although the idea of using crypto for everyday payments seems like an excellent step forward, the process continues to receive criticism for its lack of decentralization and off-chain transactions. Using third-party payment providers and converting crypto to fiat negates the purpose of using crypto in the first place and, some say, creates another central bank system.
It remains to be seen whether VISA will ever develop their own blockchain-based payments solution to provide a truly on-chain card payment experience.