How do Crypto Debit Cards Work?

Until recently, participants looking to utilize their digital assets toward the purchase of goods and services in the traditional economy first needed to convert them into fiat currency. This was often done using a vetted exchange, such as CEX.IO, which also provides trusted vectors to buy and sell crypto. This could be further complicated by the waiting period involved before that value was credited to their bank account or linked payment card.

This process would often require multiple steps, and cause participants to expand precious time and effort. Oftentimes, this resulted in crypto enthusiasts keeping their digital assets separate from funds used for everyday purchases. 

This proved to be a significant barrier to encouraging wider crypto adoption, and often relegated digital assets to remaining speculative investments, rather than currency available for on-the-go use. 

Thankfully, the introduction of crypto debit cards has simplified payments for eligible participants by empowering them to spend their crypto whenever they need it most.

Join us below as we explore how to use and where to acquire a crypto debit card with CEX.IO.

Crypto debit cards explained

A crypto debit card is a payment card that enables participants to use their cryptocurrency holdings to conduct daily transactions. This is achieved by converting available digital assets at the point of sale to the accepted fiat currency designated by online or brick-and-mortar merchants. 

Crypto debit card users don’t need to convert their assets in advance or wait for approval — such payments are instant. 

Crypto debit cards can establish intuitive bridges between traditional and decentralized financial systems by allowing transactions to flow seamlessly between both worlds. In other words, crypto debit cards can conveniently integrate the digital economy into the daily lives of digital asset enthusiasts.

Where are crypto debit cards accepted

Much like card issuers in the traditional economy, crypto debit cards are often connected to major payment networks, such as Visa and Mastercard. This helps expand the reach of crypto debit cards by allowing them to share these operational systems.

Since most online and in-person retailers accept Visa and Mastercard transactions, this dramatically enhances the utility of cryptocurrencies. It empowers users to pay with digital funds for a variety of purchases by using the crypto analog of a standard bank card. 

How do crypto debit cards work?

When initiating a transaction with a crypto debit card, the affiliated company’s payment processing network, such as Visa or Mastercard, carries out the transaction. This process typically involves the following steps:

  • Initiate the transaction: The card issuer receives a request for payment in fiat currency from the merchant;
  • Digital asset conversion: The issuer converts the required amount of cryptocurrency from your linked crypto wallet into the merchant’s preferred fiat currency at the current exchange rate;
  • Payment processing: The converted fiat currency is then sent to the payment network (Mastercard, Visa, etc.), which completes the transaction by transferring the funds to the merchant;
  • Transaction completion: The purchase is completed, and the amount in fiat currency, along with any applicable fees, is deducted from your wallet.

Eligible participants may utilize crypto debit cards to complete online and in-person transactions wherever their card-issuing payment network is accepted. In turn, some crypto debit cards offer perks, such as crypto or fiat rewards, for completing certain transactions. 

Why use a crypto debit card

There are many possible advantages for using a crypto debit card, such as:

  • Additional security: Crypto debit cards often employ standard security measures, like chip-and-pin technology, and demand multifactor authentication before completing transactions;
  • Cashback and rewards: Some crypto debit cards offer rewards or cashback programs, offering users the opportunity to save money, or receive additional cryptocurrency;
  • Greater digital asset mobility: Eligible participants can spend their cryptocurrency wherever and whenever card-issuing payments are accepted, allowing greater latitude to utilize digital assets for daily purchases;

Crypto debit cards vs. crypto credit cards

Crypto debit cards share some similarities to prepaid credit cards. Where both can be linked to a crypto wallet, prepaid cards are loaded with a set amount, while crypto debit cards draw from portfolio holdings as a funding source. In other words, once a prepaid card is depleted of funds, it often cannot be topped up; crypto debit cards enjoy repeated use as long as digital assets remain available to complete purchases.

However, it’s important to remember that some crypto debit cards may incur maintenance fees, such as when initiating ATM withdrawals, or completing certain transactions. Vetted exchanges will often share a transparent fee structure outlining where users can expect to receive additional charges. For example, CEX.IO users who request a crypto debit card after completing the verification process can begin funding transactions by linking their crypto wallet.

This enables digital assets to be used in the real-world for the purchase of goods and services both online and on-the-go, wherever Mastercard transactions are accepted. Just like a traditional debit card, this functionality will remain as long as there’s crypto to back up any initiated transactions. Users may also top up their cards with additional crypto assets to ensure purchases can be met with readily available funds. 

Crypto credit cards function identically to traditional credit cards, in that transactions are completed in exchange for debt to be paid off at a later date. Purchases made on products or services with a crypto credit card can be deferred over a certain period, allowing for payment at a later date. Typically, participants who opt for crypto credit cards must pay off a portion of their balance every month, or risk incurring late fees and interest. 


How to withdraw cash from a crypto debit card?

For the most part, withdrawing cash from a crypto card is no different than using a traditional fiat debit card. ATMs, or merchants that allow cash back transactions with participating cards, are popular methods for executing withdrawals. After inserting or tapping a crypto debit card and entering the associated PIN, participants can receive fiat currency relative to their crypto holdings, and at current market rates.

How to send money from a crypto debit card?

Some crypto cards offer the functionality to send fiat or crypto to another user or card owner. While there are unique features associated with each platform’s card, this process typically involves connecting to the recipient’s linked card wallet, and transferring funds directly.

Do I need to pay for a crypto debit card?

In most cases, requesting a crypto debit card is free, or comes with some operating fees. In the case of the CEX.IO crypto debit card, it is completely free and available to all EEA residents. Just download the CEX.IO App, a mobile app for crypto payments, and request a free crypto debit card.

Can I use my crypto debit card anywhere?

Crypto debit cards may be used wherever card-issuing payment provider cards are accepted. In the case of the CEX.IO crypto debit card, payments may be initiated in 150+ countries at merchants that accept Mastercard-affiliated payments.

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