David Baskin discusses Visa and Mastercard
The mainstream adoption of Bitcoin is getting a boost from credit card giant Visa Inc., which joined startup Fold to offer a card that earns rewards denominated in the cryptocurrency instead of airline miles or cash.
As much as 10 per cent of cash purchases made with the co-branded credit card from San Francisco-based Fold and Visa will be credited to users in Bitcoin, Fold Chief Executive Officer Will Reeves said. He expects it can bring a wave of consumers to the world’s most-valuable digital asset.
“People are not interested in spending Bitcoin right now, but are interested in accumulating it,” Reeves said in an interview. “If people don’t understand Bitcoin as money yet, they certainly will understand it as a better reward.”
Visa’s approach to crypto has been evolving. Just two years ago it was in a public fight with the Coinbase Inc. exchange over issues related to purchases made using its cards. Then, in February, Coinbase and Visa announced the Coinbase Card, which allows users to spend Bitcoin using the Visa debit card.
The Fold partnership was announced Thursday in a statement from the companies, and Reeves said cards are expected to be issued in July. He declined to name the banks that are backing the card.
Bitcoin is a challenging technology for retail users, who must establish an account on an exchange and set up a virtual “wallet” to help protect from hackers. Reeves said his firm is working to make the process simpler. Fold users also have the option to spend Bitcoin within the company’s system to buy U.S. dollar-denominated gift cards at companies including Starbucks Inc. or Uber, he said.
Placing Bitcoin rewards next to familiar incentives like airline miles, loyalty points or cash shows a maturity in how people are viewing cryptocurrencies, Reeves said.
Bitcoin “enters the pantheon where it’s that much closer to everyday consumers,” he said. “I fundamentally believe there are more shoppers than speculators.”