Mastercard and Mercuryo partnered to establish a novel bridge between cryptocurrencies and traditional finance through the launch of a new debit card.

This innovative financial product named “Spend” will allow users to make payments directly from their self-custodial crypto wallets in what is considered another huge leap to integrate digital assets into people’s daily lives and transactions.

Spend was launched on Thursday and it was presented as a multi-chain crypto card that facilitates making payments without the need to involve a bank or turn to a risky peer-to-peer (P2P) exchange.

Users will be able to maintain control of their digital assets – a well-regarded benefit of self-custodial solutions – while still being able to use these financial instruments to make ordinary payments.

Christian Rau, Senior Vice President of Mastercard’s crypto unit, emphasized the significance of this development by stating: “We are providing consumers who want to spend their digital assets with an easy, reliable, and secure way to do so, anywhere Mastercard is accepted.”

New Crypto Card Will Be Accepted by Over 100M Merchants Worldwide

Over 100 million merchants globally will accept this new card. The payment instrument will be denominated in euros and it can even be integrated with popular payment processing platforms like Apple Pay and Google Pay.

One of the most innovative features is the possibility of making payments by using a wide range of cryptocurrencies. This was made possible by establishing secure bridges that use blockchain networks including Ethereum, Solana, TON, ZKSync, and others to allow users to pay with virtually any digital asset they own. Bitcoin (BTC) is, as usual, the primary alternative due to its popularity.

The flexibility offered by this “Spend” card will surely be one of its most appealing features. Meanwhile, the cost of making transactions with these instruments is quite low considering that it generates an issuance fee of €1.60 ($1.8), a monthly maintenance fee of just €1 ($1.1), and a withdrawal fee of 0.95% per transactions.

Even though the withdrawal cost is a bit high, it is still lower than the average transaction cost charged by other similar cards offered by crypto exchanges and blockchain-based platforms.

For example, the Coinbase card charges a 2.49% liquidation fee while the BitPay debit card generates a 3% foreign transactions fee along with ATM fees. Meanwhile, other similar instruments from Crypto.com and Binance generate 1% and 0.9% transaction fees respectively.

The Spend Card Will Only Be Available in Europe for Now

For now, the Mercuryo card is only available to customers in the European Economic Area (EEA). The company will be testing the card and its adoption rate in this region first but is already planning to expand coverage and accessibility to other countries.

These expansion plans align with the public’s growing interest in digital assets considering that they provide an anonymous and permissionless alternative to traditional banking services.

The card’s support of self-custodial wallets is an important feature that could make it more attractive than other available options as customers will have full control over their assets instead of having to rely on third parties and exchanges whose financial and operational stability is uncertain.

Also read: Binance and Mastercard Partner to Provide Crypto Payments at 90 Million Stores

Raj Dhamodharan, Mastercard’s blockchain and digital asset lead, highlighted the importance of this feature, noting that many crypto holders “try to avoid” centralized exchanges. He stated: “The complexities of this process have been an obstacle for both buyers and sellers as it limits both choice and the purchasing power of stored crypto.”

Self-custodial wallets enhance security by allowing users to retain control of their private keys. They reduce the risk of financial losses caused by protocol hacks or administrative errors.

They also provide greater privacy as transactions can be made without sharing extensive personal information with centralized entities. The card improves accessibility by eliminating the need to transfer funds to an exchange before making purchases, which streamlines the process of using cryptocurrencies for everyday purposes.

Mastercard and Visa Compete to Facilitate Crypto Payments

spend card users will be able to integrate cryptos to apple and google pay

Mastercard has been making efforts to integrate cryptocurrencies into its huge payments ecosystem as it recognized the public’s growing interest in digital assets. The company has a presence in over 210 countries and serves more than 3 billion customers. Hence, their role in bringing cryptos closer to mainstream adoption cannot be underestimated.

In May this year, Mastercard launched a program called the Crypto Credential system that aimed to simplify P2P transactions. The service is available across various exchanges in Europe and Latin America, facilitating the task of sending digital assets among users through the use of aliases.

Moreover, the company announced the support of various stablecoins in February 2021 as interest in these instruments kept rising. They have worked alongside various vendors including Circle, the issuers of the USDC stablecoin, and Coinbase, one of the largest exchanges in the United States, to launch payment instruments including crypto-linked debit cards.

Also read: Visa Launches an Interoperable Digital Payments Platform Called Visa+

Visa has taken similar steps by partnering with companies like the Swiss-based Tangem to connect cryptocurrencies with the traditional global financial and payments system. This is an ongoing competition to see who manages to establish the most robust crypto-fiat bridges to dominate the market for crypto payments.

By making it easier for users to spend their cryptocurrencies, the Spend card could drive increased adoption of digital assets. The ability to use crypto for purchases at millions of merchants worldwide significantly enhances the practical utility of these assets beyond just a speculative investment.

Blurring the Lines Between Digital Asset and Traditional Finance Helps Fuel Mainstream Adoption

The Spend card establishes an important bridge between the crypto and fiat worlds. It allows users to store their wealth in digital assets while still being able to interact seamlessly with the traditional financial system. This could lead to a more fluid and integrated global financial ecosystem.

As major financial institutions like Mastercard increasingly integrate cryptocurrencies into their services, it may prompt regulators to develop more comprehensive legal frameworks for these assets.

This could result in greater clarity and stability in the crypto market. Additionally, the ability to spend directly from self-custodial wallets may reduce reliance on centralized cryptocurrency exchanges for liquidity. This could potentially shift the role of exchanges in the ecosystem and encourage innovation in decentralized finance (DeFi) services.

One of the key challenges to increasing the rate of adoption for cryptocurrencies is related to user experience (UX), particularly for those who are new to the space. The Spend card aims to address this by providing a familiar interface – a debit card – for interacting with digital assets.

The card’s integration with platforms like Apple Pay further enhances its usability. Users can add their Spend card to these popular mobile payment platforms, allowing for contactless payments by using their cryptocurrencies – a significant step towards making crypto use a normal thing.

Mercuryo has emphasized the quick and easy onboarding process for the Spend card, including instant card issuance. This would allow users to start “swiping” their virtual card within seconds of approval.

Meanwhile, although the Spend card offers numerous benefits, it also raises important considerations regarding security and risk management. As the card connects directly to self-custodial crypto wallets, users must be vigilant about their wallet security. This includes safeguarding private keys and using robust security measures to protect against unauthorized access.

Mastercard’s extensive experience in fraud detection and prevention will likely play a crucial role in securing transactions made with the Spend card. However, users should still be aware of the unique risks associated with cryptocurrency transactions.

The volatile nature of cryptocurrency prices poses a challenge for a card that allows direct spending. Users will need to be mindful of potential value fluctuations between the time they load their card and the moment when they complete a purchase.

As the lines between traditional finance and the crypto ecosystem continue to be erased, products like the Spend card will likely shape the future of global finance. The success of this venture could pave the way for further innovations in the space and potentially accelerate the adoption of cryptocurrencies as a normal medium of exchange in everyday transactions.