Even with competition from digital wallets, the use of prepaid cards is rising across the globe, according to research by Worldpay, an American fintech company.
The study predicts that worldwide prepaid card transactions will exceed $1 trillion in 2024, an all-time high. The previous record of $906 billion was achieved last year.
If you are a prospective crypto investor increasingly transacting with prepaid cards, you may be wondering if you can buy crypto with prepaid cards and/or how to buy crypto with prepaid cards.
The answer is yes; it is possible to buy crypto with prepaid cards, and the steps to buy crypto with prepaid cards are pretty simple.
Read more about how to buy Bitcoin with a gift card here.
What Is A Prepaid Card?
A prepaid card is a payment card (such as a gift card) preloaded with a specific amount of money to be spent by the user.
Prepaid cards operate almost the same way as debit cards and credit cards and are commonly known as prepaid debit cards, prepaid credit cards, stored value cards, or pay-as-you-go cards.
Strictly speaking, however, a prepaid card differs from regular debit and credit cards. Unlike a prepaid card, a debit card is linked to a bank account.
Also, credit cards have credit lines to which they are linked, unlike prepaid cards.
Why Are Prepaid Cards Necessary?
Prepaid cards can be ideal in a variety of situations, for example:
- You wish to avoid carrying cash: Besides being simpler to move with than a stack of cash, carrying a prepaid card might also be better for your safety.
- You need account security: Unlike debit cards, which can allow thieves to steal from your bank account, prepaid cards only provide access to the amounts loaded on them.
- You wish to set a spending restriction: Using a prepaid card restricts you to spending only the amount loaded on it, making it a good tool for budgeting.
- You require an alternative to a bank account: Prepaid cards are a good choice if you lack a checking account but would prefer to use a card rather than cash.
- You don’t want to affect your credit score negatively: If you do not wish to lower your credit score through a hard credit check from purchasing a credit card, then prepaid cards might be a useful short-term alternative since they don’t require a credit check.
How To Buy Crypto With Prepaid Card
Suppose you are a beginner wishing to buy from a P2P crypto exchange. In that case, these are the steps you may likely follow on the exchange’s website (you can also buy through their app):
- Step 1: Create an account with any exchange of your choice.
- Step 2: If prompted, verify your identity or undergo a KYC process.
- Step 3: Click on “Buy Crypto” and select credit and debit cards as payment method.
- Step 4: Provide the amount of crypto you wish to purchase with the card and the currency to purchase with.
- Step 5: If the card is new, provide both card and billing information and click on “Pay Now”.
- Step 6: View the order details and click on “Confirm” to conclude the transaction.
- Step 7: Complete! Expect your crypto in your crypto exchange wallet.
Note:
- Choosing your local currency as your purchase currency frees you of a currency conversion fee.
- To avoid a failed transaction, use the billing address you provided on your prepaid debit or credit card as your identity verification/KYC address.
- If you bought through an app, your crypto will be sent to the app’s wallet
Tips To Buy Crypto With Prepaid Card
It may be easy to buy crypto with prepaid card, but that does not mean throwing caution into the wind. Here are certain things to consider:
- Research crypto exchanges thoroughly before selecting a competent P2P exchange (note that not all exchanges/wallets support prepaid cards).
- Prioritize security features such as two-factor authentication, multi-sig verification, and strong passwords, among others.
- Monitor crypto exchange rates, prices and other news to have an idea of the best possible prices.
- Prepaid cards may often attract higher costs than other payment methods, so part of your research should focus on the fees charged by each exchange before making your choice.
- Always buy crypto with prepaid cards using highly protected devices, preferably your personal computer.
Top Prepaid Card Networks And Their Crypto Industry Activities
Visa and Mastercard are two prepaid card operators that most crypto exchanges accept. Both companies dominate their market significantly.
Digital currencies and blockchain technologies may seem like threats to traditional operators such as Visa and Mastercard. However, both organizations are seeking ways to benefit from the rising adoption of cryptos.
For example, they’ve been experimenting with how to utilize blockchain networks to make their cross-border payments faster. Another area they are interested in is crypto cards for payments and rewards.
Visa Partnering Blockchains To Enhance Payments
Recently, Visa has been involved in projects and partnerships aimed at “exploring which blockchains have the potential to enhance payment rails, piloting real-world ways to help reduce friction for end users, and getting a clear sense of what consumers want from this quickly evolving tech,” according to Cuy Sheffield, Head of Crypto at Visa.
For example, it is partnering with over 70 crypto platforms (Kucoin, Crypto.com, Bitpanda, etc) to provide crypto-linked debit and credit cards, ensuring ease and convenience for card users looking to change their cryptos to fiat money and purchase things.
In March last year, Fold, a Bitcoin rewards business, announced it was expanding the scope of its partnership with Visa. Under the arrangement, Visa will become Fold’s exclusive prepaid debit and credit card global network partner in Europe, North America, Latin America, and the Caribbean.
This new role comes after Fold introduced the Fold Visa Debit Card in 2020. The card was its first Visa co-branded Bitcoin rewards debit card. The company has helped process almost $1 billion since launching the card.
Furthermore, Visa and Circle, a company that issues USDC stablecoin, teamed up in 2021 to experiment with utilizing the Ethereum blockchain to facilitate cross-border payments with fiat currency.
In Australia, Visa gets USDC payments from Crypto.com in order to meet its Crypto.com Visa credit card program settlement obligations for cross-border volume. It plans to extend the program to other parts of the world.
Visa’s stablecoin settlement ability increased in September last year via the Solana blockchain and partnerships with merchant acquirers Nuvei and Worldpay.
The arrangement enables Visa to move funds to acquirers through Solana. It covers areas where stablecoins may be preferred to fiat currencies for card payments.
Acquirers are finance-based organizations aiming to quicken settlement times by processing card payments for merchants and others. The number of blockchain and crypto industry merchants using the services of acquirers is increasing.
With its Circle account, Visa makes USDC settlement payouts to Nuevi and Worldpay, who can then send the payments to their merchant customers in the same USDC.
According to Visa, its choice of Solana was based on the blockchain’s faster speed of processing transactions and reduced transaction costs. It is among Solana’s earliest collaborations with a leading payment solutions provider when it comes to facilitating real-time settlement of payments at scale.
Mastercard Helping Customers Move Digital Value
Mastercard says its digital assets strategy seeks “to help provide customers, merchants, and businesses with more choice in how they move digital value“.
To achieve this, it has partnered with various companies to offer crypto cards. This is in addition to supporting blockchain technologies, NFTs, and stablecoins, among others. Among its crypto card partners are Metamask, BitPay, Mercuryo, Uphold, and Gemini
In 2023, Mastercard launched a “Multi-Token Network (MTN),” an app store powered by blockchain. The app seeks the security, scalability, and interoperability of transactions in the realm of blockchain and digital assets.
It also intends to make permissionless networks safer for financial organizations while making commerce and payment applications more efficient.
MTN is essential to Mastercard’s aim of integrating blockchain with many payment applications. The network’s beta version was trialed in the United Kingdom during the second half of 2023. The company plans to introduce MTN to some other countries in the future.
Among the first companies to partner with Mastercard for the network include Mercado Bitcoin, Uphold, and Bit2Me. Their involvement is meant to help facilitate cross-border transfers among the US, the Caribbean, and Latin America.
MTN includes a feature known as Mastercard Crypto Credential. Introduced in April 2023, the credential offers both the infrastructure and verification standards needed to ensure regulatory compliance by Web3 applications in areas like anti-money laundering (AML).
It is also designed to facilitate trusted blockchain interactions and interoperability across networks and payment tokens supported by Mastercard.
A number of public blockchains have decided to introduce the Crypto Credential to their app development teams. Some of the chains include Polygon and Solana.
Furthermore, Mastercard teamed up with Moonpay to work on building consumer loyalty through Web3. Moonpay is a provider of infrastructure for crypto payments.
Earlier this year, Mastercard unveiled “Artist Accelerator,” a platform that helps musicians in their creative, collaborative, and monetization endeavors via Web3 tools.
Conclusion
Prepaid cards can be useful in a variety of contexts, such as for those who don’t have a bank account or wish not to lower their credit score.
Buying crypto with prepaid cards is not difficult on a crypto exchange.
But always research any exchange or website you are transacting with to obtain relevant information and avoid unpleasant experiences such as scams.
FAQs
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Can I buy crypto with a prepaid card?
Yes. Many crypto exchanges have prepaid cards as payment options. You can easily buy crypto with a prepaid card on their websites or through their mobile app.
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How much time will it take to buy crypto with prepaid cards?
It shouldn’t take very long to buy crypto with a prepaid card. Transactions are usually fast enough to last minutes at most. However, purchase time may vary according to the processing speed of the crypto exchange or due to extra verification procedures for transactions involving prepaid cards.
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Is it safe to buy crypto with a prepaid card on a crypto exchange?
Yes. As long as the exchange implements all required security measures needed to ensure maximum protection for card data. For instance, all crypto platforms that process debit and credit cards are mandated to have PCI DSS certification.
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How do you buy prepaid card with crypto?
There are online services that offer people the opportunity to buy prepaid cards with crypto. An example is buycryptocards.com. Be sure to research any website you are transacting with to avoid unpleasant outcomes.
