It is a trend that is growing globally and regionally given the interest of users for the benefits it provides in the crypto ecosystem
The term cash-back It was not known practically anywhere until recently. But today, those who follow the world of fintechthe virtual wallets and the cryptocurrenciesthey are familiar with this concept that rewards for buying.
In the case of the latter, crypto assets appear as the main sector in Argentina where this methodology is being carried out, through the prepaid cards offered by different platforms to trade crypto in the country.
What is cashback?
But what is cashback and how does it work? According to Damian DiPace, economist and director of the consulting firm Focus Market, cashback “is the possibility offered by prepaid or debit cards to pay in pesos and save in crypto.”
It describes that the virtual wallets that operate with a VISA or Mastercard allow make purchases in a large number of stores and even get adhered, automatic debit of different services and even pay with cryptocurrencies.
Among the benefits, Di Pace highlights that “you can earn annual interest that is credited daily or weekly“.
Among the most prominent in the country are Belo, Lemon Cash and Buenbitas pioneers in issuing cards with a cashback system and annual interest.
Cashback is the possibility offered by prepaid or debit cards to pay in pesos and save in crypto
Instant cryptocurrency withdrawal
Likewise, explains the economist, it must be taken into account that these cards return a percentage of the purchasethat is, they refund a part of the purchase in the customer’s account, immediately in cryptocurrencies.
Among the main cryptocurrencies in which cashback is applied, there are Bitcoin (BTC), Ether (ETH) and the stablecoin ICDwith a 2% cashback In most cases.
“Also, we must bear in mind that cashback, being in cryptocurrencies, fluctuates a lot in value, as well as the yield obtained,” synthesizes Di Pace.
Crypto cards, a regional and global phenomenon
In dialogue with iProUPthe economist, researcher and consultant Ignacio Carballo, indicates that crypto cards “are a regional and global trend in which several interesting cases are found”.
“But the main factor that refers to them is that they are plastic, obviously issued by regulated institutions that can be card issuers, but with the particularity that they are strategically driven by Visa and Mastercard“, details the specialist, also Director Ecosystem Fintech & Digital Banking (UCA) and Payments Practice Southern Cone Affiliate (AMI).
For Carballo, “these two brands, in addition to promoting them together with allied institutions, they have their own crypto cards“. And he adds that they have as object “give him a more everyday use as a means of payment“. His success in Argentina responds to two questions:
- “The regional boom of everything related to cards linked to cryptocurrencies”
- “The conflict with our currency and the obstacles to the foreign exchange market“
There is a boom in prepaid cards in the crypto sector in Argentina
The pioneers: what each one offers
“Last August, we were the first in Argentina to launch a card that connects with the crypto world in a very simple way, without cost of issue or maintenance, and that also refund 2% in cryptocurrencies on each purchase made by users”, explains Emiliano Limaexecutive of goodbitin dialogue with iProUP.
“It’s a prepaid card International MasterCardso that it serves to online or face-to-face purchases at any store adhered to the world’s Mastercard network”, he highlights.
It adds that “it can be used to pay services and taxesset to automatic debits (such as Netflix or Spotify) and make cash withdrawals at local and foreign ATMs.
Franco BiancheCMO of LemonCashexpress to iProUP that in November the firm launched the Lemon Card, an international contactless VISA card which allows to pay in any trade that accepts Visa both with pesos and with cryptocurrencies.
All three wallets offer a virtual card to start using it right away, without waiting for the plastic to arrive.
“Besides, users receive as cash-back 2% in Bitcoin of each purchase. It can be used both in physical and digital stores, such as Rappi and Steam, for example. It is a concrete way of giving usability to cryptocurrencies in everyday purchases. Just by accepting Visa, the merchant can already receive payments with the Lemon Card”, he remarks.
Bianchi emphasizes that “the user can choose pay in pesos, stable or volatile cryptocurrencies like Bitcoin or Ethereum. In all cases, the merchant receives the funds in local currency.”
In the first month after its launch alone, the company issued more than 100,000 cards and delivered more than $4 million Bitcoin withdrawals.
For its part, Manuel Beaudroit, CEO of Beloreveals to iProUP that company card “allows, for example, spend your salary in cryptocurrencies. As a user you can choose what currency do you want to spend and the order: DAI, Bitcoin, Tether. In addition, you can configure not to spend Bitcoin and select the currency that you are going to use to pay.
The executive remarks that “every time the plastic is passed (prepaid mastercard), you receive a cashback ranging from 0.1% to 21%randomly”. He emphasizes that it can be used in any location or website in the world that accepts that brand of card, in addition to obtaining a return on the account balance automatically and pay daily.
Belo, another of the card platforms that offers cashback in cryptocurrencies
What each crypto card offers
Limia confides in this medium that “at the time of activating the card in the app of goodbit, the user automatically get a digital version while you wait for the plastic to be delivered to your home.
“The advantage of accessing the digital card automatically is that they can start using it the same instant you activate it for online purchases, while the version physical receives it within 72 business hours at the address indicated,” he details.
Buenbit, one of the first to offer a prepaid card for crypto withdrawal
Bianchi, for his part, remarks that “the cash-back offered by the Lemon Card is from 2% fixed in Bitcoin and that is something that users value a lot, because they see it as a store of value. There are other tools with variable return percentages and they can rotate the cryptocurrency in which the withdrawal is executed,” he says.
Bianchi says that, in addition, once a month the CashBack Day takes place. “In this action, without prior notice, a certain number of chosen people are awarded randomly with a 100% refund in Bitcoin of any purchase made with the card in recent days,” he stresses.
“The Lemon Card is the first card in Argentina that has the Bitcoin and Ethereum logos. It is an important milestone because it brings the cryptocurrency revolution closer to everyday purchases. We took a tool from the traditional financial system, such as a card, and hacked it with blockchain technology to expand crypto adoption across the country.”
Beaudroit points out that “the fundamental difference is the cash-back“ and stresses that the Belo Cash card “is unique in the market, due to its random refund system and a very high percentage“.
“Belo’s proposal is integrate all functionalities that the product has: from the cryptocurrencies and rates it offers to being able to configure the application”, he concludes.
What other things can be done with crypto cards
To help beginner users, cashback could be defined as one of the easiest ways to get digital currencies “without buying them”, since it consists of obtaining a free prepaid card and access crypto withdrawals every time it is used.
In fact, these plastics can be used for following functions:
- Associate it in Mercado Pago to pay bills, QR and purchases in Mercado Libre
- Add it to other wallets and delivery apps
- Pay subscriptions to digital services, such as Netflix, Amazon Prime, Spotify, Steam, Google Play, etc.
- Buy at any physical or online store that accepts Visa (Lemon) or Mastercard (BuenBit and Belo) in the world
To use these crypto cards, the user must have balance in the wallet: can be recharged with weights through transfer banking or collection networks such as Easy Pay Y rapipago. Then you can pay and, after doing so, immediately a notification will arrive on the cell phone in which the refund in digital currencies will be reported.
Crypto cards can be associated with Mercado Pago and other wallets
While you sign as Ripio, Let’s Bit, SatoshiTango and Binance advance their own proposalsCarballo refers to the aspects still absent in the ecosystem so that the interaction is complete and integral.
“What these cards do is transform the value of crypto deposited in your wallet at fiat currency. There is an exchange rate cost, which makes the merchant receivesin this case, Argentine pesos“, emphasizes the specialist.
Carballo affirms that “the next step will be to advance in the closed circuit, acquisitionso that it can transact fully with cryptocurrencies. In this way, who provides the good or service you will receive crypto deposited and not pesos when charging for a POS or QR”, warns the expert, although he points out that in this case “regulatory bells are rung”.
Leading digital currency wallets want these assets to be used anytime, anywhere, taking adoption to a new level. And keep to the Argentina as one of the most important crypto hub in the world.