Visa Inc. is partnering with cryptocurrency startup BlockFi to offer a credit card that rewards purchases with Bitcoin rather than airline miles or cash.
Visa will launch a credit card that rewards users in Bitcoin, instead of the traditional cash, or airline miles, in early 2021.
Visa, together with BlockFi crypto start-up, will issue a dollar credit card to which the cacheback will return in the form of bitcoins rather than the usual money or miles. Bitcoin Rewards credit card users will receive back 1.5% of their purchases in BTC, as well as $250 in crypto if they spend more than $3000 during the first three months in 2021, BlockFi said in a statement. The cost of servicing the card is $200 per year. The credit card will be issued in the first quarter of 2021.
BlockFi’s CEO Zac Prince said it will be the first credit card with a Bitcoin cacheback. According to him, the company will encourage customers to use the card for everyday expenses rather than to accumulate debt.
The interest rates on BlockFi loans are much better than those on a regular credit card, added Prince. BlockFi is also working to allow customers to repay their debts using the cryptocurrency.
Companies were supposed to issue their credit cards a quarter earlier, but plans have been disrupted by the spread of COVID-19. Visa acts as a card issuer, Evolve Bank & Trust provides a bank identification number (BIN) that allows BlockFi to connect to the payment network and Deserve manages payments, the publication explains.
BlockFi will earn on service and interbank fees, which will be divided into cachebacks and BlockFi’s income. Prince was unable to give an exact range of cash limits on credit cards, but expects the limits to range from $5000 to $25 000 depending on the credit rating of the client.
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