Thanks to the rapidly growing demand of cryptocurrencies, many fintech firms are offering crypto rewards on their debit and credit cards. A few months back, Quontic became the first bank to offer bitcoin rewards on debit card purchases. Coinbase has launched its own crypto debit card, and the Winklevoss brothers’ crypto firm Gemini is launching a credit card that lets you earn up to 3% back in bitcoin for every dollar spent.
Crypto management platform BlockFi was one of the first to announce its own bitcoin rewards credit card, which will begin shipping to U.S. consumers in Q2 2021. “Cardholders will earn 1.5% cash back on all purchases that will automatically be converted to bitcoin and placed into a BlockFi account every month,” said Zac Prince, co-founder and CEO of BlockFi. “Since bitcoin earned from card transactions is deposited into a BlockFi account, it’s regarded as standard crypto funding, and it can be withdrawn, traded, or used as collateral toward a crypto-backed loan.”
BlockFi cardholders will receive a $250 bonus after spending $3000 or more in the first three months. Other benefits include a bitcoin rewards rate boost after 3 months of card ownership, a trading bonus for cardholders who trade cryptocurrencies with BlockFi, as well as a bonus for every new client referral.
Challenger bank MoneyLion has also announced the launch of crypto-based investing and rewards on its debit card. “The MoneyLion cryptocurrency offering will be connected to our RoarMoney Debit Mastercard which offers 2-day early paycheck deposits, access to our Instacash program, Mastercard’s price protection program, and other modern and secure banking features,” said Dee Choubey, co-founder and CEO of MoneyLion.
The new features will enable members to participate in a crypto-based rewards program that allows them to earn digital assets in the same way they currently earn cash back, which can then be traded or invested through the MoneyLion platform. Cardholders can also utilize a spending roundups feature that allows them to round up debit card purchases to the nearest dollar through investments in digital currencies. MoneyLion's crypto features are expected to go live later this year, and interested users can currently sign up on a waitlist.
Digital money management platform Unifimoney is the latest to launch a competitive card with crypto rewards, called the Unifi Premier credit card. It offers users the chance to redeem rewards in the form of bitcoin, gold and equity. The card is expected to go live in Q3.
While most credit card rewards programs are designed to encourage higher spending, Unifimoney’s credit card helps consumers invest and grow their wealth as they spend. “Dining and travel rewards are a difficult sell during COVID, so we see a lot of people looking for alternatives in the credit card space. And that's what we're offering,” said Ben Soppitt, founder and CEO of Unifimoney. “Our value proposition is designed to help people grow their wealth as they spend, and we give our customers the choice of redeeming their rewards in three different asset classes: bitcoin, gold, or an equity investment into their robo-fund.”
According to Soppitt, Unifimoney is the only fintech offering credit card rewards in multiple asset classes. “We'll definitely be the first credit card in the world to offer three different asset classes as a redemption mechanism,” he said. “Not everybody wants to invest in crypto. Some people want to invest in equities, and others want to invest in gold. So rather than restrict consumers’ choices, we want to provide them as many options as we can.”
The credit card is produced from recovered ocean plastic, and the company makes donations to the Ocean Foundation for every swipe. Soppitt believes that COVID has caused a shift in people’s perception of credit cards. “The established companies in the industry like to sell credit cards, particularly in the premium segment, as some sort of lifestyle product. Like a red Ferrari or jewelry, it's a way of signaling your affluence or your social status,” he said. “We’ve rejected that cliché of the metal card phenomenon for affluent consumers. No one cares that you have a metal card when you're sitting at home shopping online during COVID.”
Soppitt points out that despite the increasing popularity of cryptocurrency, the vast majority of people still haven’t invested in it. “People who are currently involved with crypto are a minority, and they’ve been using very esoteric apps for it,” he said. Soppitt believes that platforms like Unifimoney could serve as a great starting point for new entrants. “If you're a hardcore bitcoin miner, you probably won’t come to Unifimoney. But if you want to have a balanced portfolio that includes crypto and other alternative assets, that's really what we're there for.”