Despite the shake-up in the crypto market, Visa and Mastercard have continued to ink new alliances with crypto startups worldwide. Both of these payment giants are positioning themselves to become major players in the crypto space. The two firms are seeing significant growth in the crypto market and are taking steps to capitalize on this trend by forging strategic alliances with Web3 startups to launch crypto-linked prepaid cards.
- In March 2023, Visa announced an expanded partnership with Fold, a Bitcoin rewards firm, to serve more regions. Under the new partnership, Fold has selected Visa as its worldwide partner to provide prepaid debit and credit cards to customers across Europe, North America, Latin America, and the Caribbean. Since first partnering with Visa, Fold has experienced approximately US$1 billion in transactions. Furthermore, users have earned US$30 million in Bitcoin rewards.
The popularity of Bitcoin rewards and cashback deals is significantly driving the demand for crypto-linked prepaid cards. With inflation rising and the cost of living soaring, many are seeking to receive more value for their spending. Consequently, the demand for cashback offering crypto prepaid cards is projected to grow further in 2023. Mastercard, like Visa, is also seeking to tap into the growing popularity of cashback crypto prepaid cards.
- In February 2023, Mastercard entered into a strategic collaboration with Bit2Me, a Spanish cryptocurrency exchange. As part of the alliance, the two firms have launched a Mastercard-powered debit card offering 9% cashback to users. Besides payments at physical businesses, users can also use the crypto-linked prepaid card for online payments. Currently, the crypto debit card works with eight cryptocurrencies that can be linked to the wallet. However, the exchange is planning to add support for more cryptocurrencies in 2023.
- In March 2023, Mastercard also forged a strategic alliance with Bitso, the Mexican cryptocurrency exchange, to launch a Mastercard debit card, similar to the one launched in partnership with Bit2Me. The crypto-linked prepaid card will offer users crypto rewards on purchases. With more than 100,000 users already signed up to test the product, PayNXT360 expects Mastercard to make major inroads into the crypto payments space in the Latin American market in 2023.
The collaboration with Bitso has further enhanced Mastercard’s portfolio of strategic partnerships with crypto firms in Latin America. From Binance to Belo and Buenbit, Mastercard is aggressively expanding its presence across the region through strategic collaborations. In addition to Latin America, Mastercard is also accelerating its presence in the European market.
- In March 2023, Mastercard entered into a strategic collaboration with Bybit to launch a crypto-linked payment card. The payment card, available for eligible users in Europe and the United Kingdom, will enable users to convert their cryptos into fiat for making purchases. Initially, Bybit and Mastercard launched a virtual card for online purchases. In April 2023, the two firms are planning to launch the physical card enabling offline purchases.
Alongside Mastercard, Visa is also planning to expand its presence in the European crypto payments industry. The payment giant, in March 2023, partnered with Gate Group, the Lithuania-based crypto exchange, to launch the prepaid card. The payment card will enable users to convert their cryptos into fiat for making online and offline purchases.
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Notably, Visa and Mastercard’s decision to enter the crypto space is not surprising. The cryptocurrency market has grown significantly in recent years, despite the shakeup in 2022. Many investors and consumers have embraced digital currencies as a viable alternative to traditional currencies. The rise of cryptocurrencies has created a new market for payments, and Visa and Mastercard are well-positioned to take advantage of this trend.
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Alongside Visa and Mastercard, other players are also seeking to capitalize on the highly lucrative growth opportunity in the crypto payments market.
- In March 2023, Movii, the Colombian neo bank, announced that the firm has partnered with Binance. Under the collaboration the two firms have launched a crypto-linked payment card, allowing users of Binance to pay with crypto at all merchants accepting debit and credit cards. The crypto-linked prepaid card also provides zero-fee withdrawals and 8% cashback in rewards on selected purchases.
Binance, one of the largest cryptocurrency exchanges worldwide, has already launched similar crypto-linked prepaid cards in Latin America. In 2023, the firm forged an alliance with Mastercard to launch the crypto payment card for its users in Brazil. In 2022, the firm launched a similar offering for its users in Argentina. With the adoption of cryptocurrencies growing at a rapid rate across the Latin American market, amid rising inflation, PayNXT360 expects Binance to further launch such crypto-linked prepaid card offerings in strategic collaborations with payment giants.
Despite the downturn in the global cryptocurrency market, Visa and Mastercard have announced that they will keep monitoring the crypto industry and regulatory developments, as the two firms are foreseeing significant growth opportunities in the segment. Furthermore, amid the decline in consumer discretionary spending, revenue for Visa and Mastercard has also taken a hit. The collaborations with crypto exchanges and Web3 startups, therefore, can also drive revenue growth for both payment giants. These strategic collaborations, between Visa Mastercard and crypto exchanges, will also keep aiding the growth of the global prepaid card industry over the next three to four years. Consequently, PayNXT360 expects the prepaid card market to record robust growth from the short to medium-term perspective, despite the economic uncertainties and decline in consumer discretionary spending worldwide.