Coinbase launched its own debit card in an effort to promote the use of cryptocurrencies in payments as well as investing.
Visa said during its recent earnings call that customers made $2.5 billion in payments with its crypto-linked cards in its fiscal first quarter of 2022.
That was 70% of the company’s crypto volume for all of fiscal 2021.
“To us, this signals that consumers see utility in having a Visa card linked to an account at a crypto platform. There’s value in being able to access that liquidity, to fund purchases and manage expenses, and to do so instantly and seamlessly,” Visa CFO Vasant Prabhu told CNBC in a phone interview, providing insight as the company reported better-than-expected earnings and revenue after the bell Thursday.
“We will continue to lean into the crypto space and our strategy is to be a key partner to provide the connectivity, scale, consumer value proposition, reliability and security that is needed for crypto offerings to continue to grow,” Visa CEO Al Kelly said on the earnings call, as the stock moved up in after-hours trading and then opened strongly higher Friday.
The payments company also announced its network of crypto wallet partners is growing from 54 to more than 65, including Coinbase, Circle and BlockFi. The number of merchants accepting crypto as payment also grew to almost 100 million.
“Looking at the broad categories of spend, we don’t see the volume concentrated in a specific merchant vertical with these programs. People are using their crypto-linked cards to spend in a variety of ways — retail goods and services, restaurants, travel. They’re increasingly being treated like a general purpose account,” Prabhu told CNBC.
Back in July, Visa reported crypto-linked card usage reached $1 billion for the first six months of 2021.
Mastercard and crypto exchange Gemini plan to launch a card allowing customers to earn cryptocurrency as a reward. But cardholders will not be given direct access to their digital wallet. Gemini, the crypto exchange co-founded by billionaires Cameron and Tyler Winklevoss, expects to make the card available to customers on a waitlist in early 2022, following previous plans to launch over the summer.
Major cryptocurrencies saw their rapid growth slow in the second half of last year. Bitcoin, which hit an all-time high of nearly $69,000 in November, has dropped more than 45% since then.
“We’ve seen this payment volume continue to grow despite volatility in the crypto markets,” Prabhu said, “Crypto rewards are a significant part of the value proposition for many of these card programs, particularly for consumers who are new to crypto who may not be directly investing in it, but are excited for the opportunity to earn it as they spend fiat [currency like the dollar]. We’re watching these programs closely to see how they impact the rewards category as a whole.”
Visa has no plans to hold cryptocurrency on its balance sheet, but it’s created a crypto consulting service and made several recent investments in crypto platforms as it continues to push for adoption of digital currencies.