Bitcoin wallet provider Xapo, incorporated in Hong Kong and based in California, has reported that it will launch its bitcoin debit card this month.
The first news about the debit card appeared in the bitcoin community in April, the card will be operating by the end of June to be accepted by any business that works with debit cards or credit cards from its network partner. However, the company has yet to announce the name of the partner and the card network.
There was a possibility that Xapo and MasterCard would work together on the launch of a new card, but apparently the plans had changed.
Nevertheless, according to Payments Source news, Xapo has a number of partners that can be a good replacement to MasterCard and Visa. Such cards include Star, Pulse or MAC and they would allow businesses to accept debit transactions even if they are not connected a particular bank.
The biggest problem with bitcoin community is that big banks and card operators have assured that they are unwilling to be related to cryptocurrency businesses.
Madeline Aufseeser, a senior analyst at the Aite Group covering credit and debit card issues, believes banks actually could operate their bitcoin debit cards in theory, but in practice it could turn out not so well.
“Most non-financial institutions don’t realize the extent of due diligence and requirements of becoming a licensed issuer,” she mentioned.
Demand is high
Right after Xapo first mentioned the launch of its debit card, it started receiving pre-orders for its cardin April, charging a $15 fee, and allowing to have one card per wallet account. Even though the company told that the demand for cards has been high, it has not reveal the exact numbers.
There were other attempts to launch bitcoin debit cards. Coincard and Cryptex cards were introduced in early April. However, Xapo says that its card has advantages over these competitors.
In addition, while users of Coincard and Cryptex cards must pre-load them with bitcoins and manually convert bitcoins, users of the Xapo card do not, as it debits directly from the wallet.
There is an issue with bitcoin operating with traditional card networks. The users will still be charged the standard debit card fee. Nevertheless, there is a ghuge plus as users would be able to use a huge ATM and merchant network.