The term “debit card” is derived from the English “debit” or “account debit” and is defined as a bank card that can be used for cashless payments as well as for withdrawing cash from ATMs.
The Cryptocurrency prepaid credit card
Prepaid cards as a means of payment do not grant interest-free loans either, but they do offer the same advantages as regular credit cards, e.g. in terms of worldwide acceptance. To use the prepaid card, credit must be topped up. In contrast to the above mentioned, the card cannot be overdrawn. Therefore this payment method is well suited for people with low creditworthiness or young people.
Crypto Debit card number
Just like credit cards, debit cards have a card number, the debit card number. The debit card number has 13 to 19 digits and is shown on the front of the card, as well as the validity period and the name of the cardholder. On the back of the card is the so-called Card Verification Code (CVC). This is a 3-digit check digit that is used for verification.
Crypto Debit card security
A personal identification number (“PIN”) is stored on each debit card. This must be entered during a card transaction, such as a cash withdrawal from an ATM. This prevents unauthorized third parties from accessing the account. In Germany, debit cards include a dielectrically embossed identification code, which is read out capacitively. In contrast to the magnetic stripe, the so-called MM feature is difficult to copy. In some countries the MM-characteristic is not read out. Here the number of fraudulent withdrawals of money by means of doublets is also increasing.
The difference between Debit Card and Credit Card
There are three major differences between debit cards and credit cards.
If a customer pays with a debit card, the account is debited directly or within a few days. The credit card, on the other hand, only collects the amounts paid by credit card once a month.
Due to the delayed debit, the credit card holder must be classified as creditworthy. Depending on his creditworthiness, he is granted a corresponding credit limit. This is not necessary with the debit card. Accordingly, every bank customer can also receive a debit card from the bank.
Credit card acceptance is very high internationally. Therefore, purchases abroad are usually paid for by credit card. Debit cards can only be used to a limited extent in other countries. The use of debit cards is also still not very widespread for online shopping.
Shopping with the Crypto Debit Mastercard – online and in stores
The Debit Mastercard differs from the Mastercard credit card in that all amounts are booked directly from the account. Otherwise, the card offers the same possibilities as the credit card. It can be used in stores worldwide – classic or via NFC technology by simply holding it up to the payment terminal. If the purchase amounts are less than 25 euros, no PIN entry or signature is required. If the customer only wants to pay by cell phone, he can use Google Pay. There, the app stores and encrypts the card data. At the checkout, the customer holds the decrypted smartphone in front of the payment terminal and payment is made again without PIN entry for low amounts and with authentication for larger amounts.
When shopping online, the Debit Mastercard is used for payment in a similar way to the Mastercard credit card. The customer confirms the payment process with an online PIN number. This PIN number is the same number that is used when shopping in a store. In some companies such as hotels, the Debit Mastercard is not activated and can therefore not be used
Start-ups, banks and technology companies have been trying for some time to make crypto payments and trading more accessible. In addition to user-friendly, secure platforms for crypto transactions, new solutions are establishing themselves to better integrate the Bitcoin world into the daily financial routine. These include crypto debit cards: the cards, which in their physical form look like ordinary bank cards, make it possible to pay for meals in restaurants or purchases in supermarkets with crypto-currencies. Users can easily convert Bitcoin and other crypto currencies into Fiat currencies.
What can crypto debit cards do?
The conversion of crypto to Fiat money works differently depending on the provider: Bitcoin and Co. can either be converted automatically when making a deposit or manually via a corresponding app only when needed. The crypto cards are offered both as plastic cards “to touch” and in virtual form. Advantage here: Users can manage their money from any location, usually via an app. Many crypto debit cards also offer features such as contactless payment, automated billing and cashback options, where users receive rewards for their purchases.
Read more on Forbes about the race to dominate the crypto debit cards market.
Multiple currencies on one card
The crypto debit cards make life easier not only for heavy shoppers but also for frequent travelers: With many Bitcoin debit cards, several Fiat currencies can be stored in separate accounts. When shopping in Delhi or Denver, no excessive currency conversion fees then become due. This advantage also applies to cash withdrawals: Different Fiat currencies can be withdrawn without the need for currency conversion. In addition, some of the crypto cards offer travel insurance and fraud protection. It’s worth comparing: the card issuers charge fees for the crypto service. For example, withdrawals can be free of charge up to a certain amount, after which a fee is charged.
Not anonymous, but secure
While many crypto-fans appreciate the anonymity of digital currencies, the use of a debit card is over – there are no anonymous crypto-debit cards. The reason is simple: card issuers must comply with the banking laws of the jurisdiction in which they are located. These laws require that crypto card issuers also require basic identity information from their customers. So anyone who wants to apply for a crypto-debit card usually has to present at least one form of identification, such as an identity card or passport. This ensures transparency – and more security.
Bitcoin like cash
The Californian company Xapo pioneered the crypto-debit card in 2014. The Xapo card enabled users to spend Bitcoins like cash at any online or offline merchant that accepts Visa. Cryptopay was also an early adopter – the Cryptopay debit Visa Card has now been issued more than 23,000 times.
The dynamic crypto scene is going up and down: Wave Crest Holding, a company that issues Bitcoin debit and virtual cards, announced in January 2018 that it would close its Visa prepaid cards due to a change in the operating license. As a result, all crypto-currency cards issued in Europe could no longer be used for payments and withdrawals – customers of well-known providers such as Cryptopay, Bitpay, TenX, Wirex and Bitwala were left behind.
New solutions for Europe
In the meantime the Visa debacle is however to some extent digested and the possibilities of using crypto currencies via Debitcard as means of payment are constantly increasing: Thus for example the Litecoin BlockCard available in the USA is to come already soon to Europe. The product of a cooperation of the Litecoin Foundation with the Bitcoin stock exchange Bibox and the Blockchain company Terio promises application possibilities for the card in retail and online trade.
And the crypto-platform Coinbase is introducing a crypto-debitcard in Germany as well, following France, Ireland, Great Britain, Spain, Italy and the Netherlands. With the card Coinbase users can pay online or stationary at the points of sale accepted by Visa with Bitcoin, Ether and Co. The crypto-debitcard should also make it possible to withdraw cash from vending machines. The cash is converted into the Fiat currency of the respective country via the connected crypto-wallet.