Payments giant Visa is launching its first crypto rewards card in partnership with crypto services company BlockFi.
BlockFi initially announced its plans for a credit card in December 2020. At the time, the exchange released a waiting list for US-based clients, which has now amounted to over 400,000 people. BlockFi CEO Zac Prince said he expects each person on the waitlist to receive their card towards the end of July.
BlockFi also stands to benefit from utilizing the card as a customer acquisition tool. This is because the new offering provides clients with a simple way to acquire bitcoin. This means without having to pay fees or navigate the sometimes complicated onboarding processes at exchanges. BlockFi stands to benefit as well from the fees it will receive through money spent on the card.
BlockFi Visa Rewards Cardholders can earn 1.5% back in bitcoin on every purchase. This payout then increases to 2% on every dollar spent over $50,000 annually. As an incentive to new users, they will receive a 3.5% bitcoin rewards rate for the first 90 days, or until receiving $100 worth of bitcoin. The card also provides other benefits, such as rebates on trading fees. It also comes with no annual fee or foreign transaction fees.
When compared to the returns of more traditional cards, the rewards prove quite competitive. For instance, Bank of America’s Customized Cash Rewards credit card offers 3% cash back in one spending category of the customer’s choosing. This also includes 2% back automatically on grocery purchases or 1% back on all other purchases.
However, this could be outdone by US crypto exchange Gemini, depending on a customer’s spending habits. The Winklevoss-led exchange launched a crypto rewards credit card this summer in partnership with Mastercard.
Currently, Gemini will give clients 3% back on dining purchases in any cryptocurrency offered on the exchange on purchases without annual fees or exchange fees. However, the rewards drop to 2% on groceries and 1% for all other purchases. Meanwhile, BlockFi can only offer rewards in bitcoin for now.