Big players are eyeing the LATAM region to launch crypto-backed prepaid cards

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The cryptocurrency ecosystem in the LATAM region has gained momentum with increase in investment, consumer adoption, and crypto-enabled usage cases in 2021. Consequently, more fintech providers are seen to build strategies to develop the future of crypto and payments for the customers, clients, and partners in the region, gaining market share in the region. 

Several crypto platforms are introducing crypto-backed cards using Visa and Mastercard as the rails, enabling consumers to make everyday purchases with cryptocurrency. For instance,

• In August 2022, Binance, one of the leading blockchain and cryptocurrency infrastructure providers, announced launching a prepaid card in Argentina with digital payments provider Mastercard. Notably, the launch of the Binance card marks the narrowing of the gap in using cryptocurrencies in everyday purchases in Argentina. 

The Binance Prepaid Card, issued by Credencial Payments, will enable all new as well as existing Binance users in Argentina with a valid national ID to make payments with cryptocurrencies at all merchant stores in the Mastercard network. At the point of purchase, the cryptocurrencies get converted to fiat currency in real-time, making users enjoy a smooth transaction procedure. Together with this, the users will also be able to earn up to 8% as crypto cashback on every purchase made and withdraw cash from ATMs without any chargeable fees. Additionally, to keep track of the purchases made, the cardholders can access the dashboard on the Binance App and the website. On the other hand, the merchants, who are accepting Binance Card, continue to receive fiat when the users are paying in cryptocurrency.

Though crypto adoption has a lot of room to grow, PayNXT360 anticipates that this product launch will mark a significant step in encouraging wider crypto use and global adoption for users from Argentina.

• In June 2022, a payments provider, Visa, announced that it is planning to launch Lemon Cash prepaid cards in Argentina through an agreement with crypto trading platform Satoshi Tango and Crypto.com cards. This came on the back of Visa's partnership with Argentinian crypto exchange Lemon Cash in 2021 to release Visa cards offering a 2% Bitcoin cashback against every transaction made. Similarly, Visa entered into partnerships in Brazil with neobank Zro Bank and crypto-specializing firm Alterbank.

The payments giant is also aiming to expand these crypto cashback cards in other countries such as Mexico, Peru, and Colombia. Additionally, Visa plans to build on crypto schemes in Latin America and the Caribbean through several tools to expand digital currencies and manage the emerging NFT economy.

Since crypto-backed card programs have a higher rate of cross-border transactions than traditional non-crypto programs, digital payments providers are introducing crypto-based multi-currency prepaid debit cards to gain market share. For instance,

• In March 2022, EfinanceBank, a key provider in digital payment, investment, and banking technology, announced to enter into a partnership with Wirex, a borderless cryptocurrency and fiat payment platform, to launch its prepaid multi-currency debit card. With the growing popularity of blockchain, EfinanceBank pursued adding the crypto payment functionality to its platform and connecting with the blockchain ecosystem. Now, this partnership will enable the people residing in the United Kingdom and other countries to make transactions seamless during travel and spend using multiple fiat and cryptocurrencies through this prepaid card and app.

Though Coinbase and Visa first issued crypto-backed cards in 2015, the adoption of these cards gained impetus over the last four quarters around the globe. Notably, surging growth in crypto assets combined with big players' interest has turned crypto into a transactive currency rather than just a store of value. Therefore, PayNXT360 expects more players will enter the arena of cryptocurrency enabling consumers to transact as they would with any other card.

To know more and gain a deeper understanding of the prepaid card market in Latin America, click here.