Crypto payment cards: the complete guide to using your cryptocurrencies in the real world

Key Points

Crypto cards represent a bridge between the digital world and everyday purchases. They allow you to instantly convert your cryptocurrencies into fiat currency to pay wherever Visa or Mastercard is accepted. Unlike traditional cards, crypto prepaid cards must be loaded with digital currency and offer benefits such as cashback in crypto. However, they carry risks related to price volatility and important tax implications. Major exchange platforms and authorized banks issue these cards, requiring KYC and AML procedures before activation.

Introduction: when decentralized finance meets the everyday

Although much of the interest in the crypto sector is related to speculative investments, the ecosystem offers concrete utilities such as value transfer. Bitcoin was created as a global digital payment system, not as a means to accumulate wealth. Today, crypto cards are turning this original purpose into reality, allowing users to spend their digital assets in stores, restaurants, and e-commerce platforms around the world. They represent a practical tool for integrating cryptocurrencies into everyday life while also earning crypto rewards.

What exactly are crypto payment cards?

A crypto card works on a logic similar to your traditional debit card. You can use it to pay for goods and services at any merchant that accepts the payment service provider. However, the mechanism behind the scenes is more sophisticated: although it seems that you are paying directly with cryptocurrencies, the seller always receives fiat currency in their account.

The process is as follows: your crypto card withdraws the cryptocurrency from your digital wallet, converts it into the local currency of the country where you are making the transaction, and then uses these funds to complete the payment. This happens in a few seconds, ensuring a smooth and transparent experience.

Both Visa and Mastercard collaborate with authorized fintech companies and exchanges to issue these cards, ensuring acceptance at millions of merchants worldwide. Some cards also offer reward systems that reward purchases with cashback in cryptocurrency, functioning like traditional credit cards that provide loyalty points.

How crypto cards work: from theory to practice

Let's take a concrete example to clarify the mechanism. Suppose you have 500 dollars in a cryptocurrency in your funding wallet linked to the card. When you pay a 100 dollar bill at the restaurant with your crypto card, the platform's system automatically performs the following operations:

1. Insert the card into the payment device
2. Accept the transaction
3. The platform instantly sells 100 dollars of cryptocurrency from your account
4. The funds converted into fiat currency are charged to your card.
5. The restaurant receives 100 dollars in traditional currency
6. You have 400 dollars in cryptocurrency remaining in your wallet.

The entire process takes place in a matter of seconds. Additionally, many of these cards also support withdrawals at ATMs, using the same instant conversion mechanism.

Differences between crypto cards, debit cards, and credit cards

Although the superficial functioning is similar, there are important distinctions between these three financial instruments.

Traditional debit cards: are preloaded with fiat currency and allow you to spend funds already available in the account. No extended credit.

Traditional credit cards: allow you to buy now and pay later. Expenses are settled in fiat currency and often offer rewards in the form of points or cashback.

PrepaGate crypto cards: work like debit cards, but they must be loaded exclusively with cryptocurrencies, not with fiat currency. At the time of payment, the cryptocurrency is converted and the merchant receives traditional currency.

Crypto credit cards: combine the credit line of traditional credit cards with cryptocurrency rewards. You can purchase and repay in fiat currency, but you receive crypto bonuses on the money spent.

A crucial aspect: to obtain a crypto card from any authorized issuer (exchange, bank or fintech), you will need to complete identity verification procedures (KYC - Know Your Customer) and anti-money laundering checks (AML - Anti Money Laundering), just like with traditional cards.

Concrete advantages of using a crypto card

Practicality for Daily Use: the main advantage is the ability to use cryptocurrencies for everyday purchases. Normally, spending crypto is complex and requires the merchant to accept direct payments in digital currency, which is rare. Additionally, many cryptocurrencies like Bitcoin require long confirmation times (up to 30 minutes), whereas crypto cards offer instant transactions.

Managing Volatility: with a crypto card, you are not exposed to price fluctuations during payment. The conversion happens instantly at the current exchange rate, eliminating the risk of paying more or less than expected due to volatility.

Rewards and incentives: many crypto cards offer cashback in cryptocurrency, discounts on subscriptions like Spotify or Netflix and other benefits similar to those of traditional cards. It is important to compare the various offers available to find the most convenient card for your usage profile.

Hold your cryptocurrencies: you don't need to fully liquidate your crypto into fiat currency. The card only converts the necessary amount at the time of payment, allowing your funds to continue participating in potential market upswings.

Speed and simplicity: compared to the traditional process of manual conversion and bank transfer ( which can take days ), a crypto card allows you to access your funds in a few minutes.

Risks and Important Considerations

Despite the advantages, crypto cards carry certain risks that should not be underestimated.

Value Volatility: if you hold cryptocurrencies in your wallet, the fiat value of the account will constantly change. This means that you may not have the exact amount you think available, as it depends on the current exchange rates. If you wait before spending, the value may have increased or decreased significantly.

Tax implications: in many jurisdictions, spending cryptocurrencies creates a taxable event. It doesn't matter if you buy a coffee for a few euros or a car for thousands of euros. If you have realized gains or losses with your crypto over time, you will need to pay the appropriate taxes or deduct the losses from your tax return before using the card. This tax obligation applies regardless of the smallness of the transaction.

Tracking and compliance: the use of crypto cards is fully tracked and reported, which means that tax authorities can easily verify your transactions. It is essential to keep accurate records of all your transactions.

Exchange fees: some platforms apply hidden fees during the conversion process from crypto to fiat. Always carefully check the terms before using the service.

Solution to volatility: one way to mitigate the risk of volatility is to use stablecoins. These cryptocurrencies maintain a fixed or very stable value compared to a traditional currency or an underlying asset, almost completely eliminating the risk of price fluctuations.

The landscape of available crypto cards

The main exchange platforms and fintech companies have launched their crypto cards in the European market. These cards are available in many European countries, including Italy, Germany, France, Spain, the United Kingdom ( where applicable ), and many other nations of the European Union.

Typical advantages include:

• Absence of administrative or processing fees
• Cashback up to 8% in crypto ( depending on the average monthly balance maintained)
• Virtual cards available instantly, usable for online purchases
• Protection of funds through high security standards
• Universal acceptance at any merchant that accepts Visa or Mastercard

In recent years, some platforms have also introduced virtual cards that can be added directly to Google Pay and Apple Pay, allowing payments from smartphones in just a few clicks. Some of these innovative solutions offer reduced exchange fees, for example, 0.5%, and support ATM withdrawals up to considerable amounts per month.

How to apply for a crypto card

The application process is generally straightforward if you are already a user of an exchange platform or a specialized fintech app:

1. Log in to your account on the chosen platform and navigate to the payment cards section.
2. Check geographic eligibility: verify if your country of residence is included in the list of supported countries.
3. Complete the KYC and AML procedures: provide identity documents, proof of residence, and any other required information.
4. Select the card type: choose between a virtual card (available immediately) or a physical card (shipped by mail)
5. Customize the details: decide how to display your name on the card and other details
6. Accept the terms: read and accept the Privacy Policy, the Terms of Use, and the Agreement with the cardholder.
7. Place the order: complete the order and wait for confirmation
8. Load funds: transfer cryptocurrencies to the funding wallet linked to the card

Many platforms offer a virtual card that you can use immediately for online purchases while you wait for the arrival of the physical card. The complete process, including verifications, can take anywhere from a few minutes to several days depending on the platform.

Innovative solutions: crypto virtual cards

In recent months, more innovative solutions based on integrated virtual wallets have emerged. These platforms allow for:

• Instant issuance: the card is created within minutes after the completion of KYC
• Reduced fees: often charged only 0.5% for conversions, with no hidden fees.
• Mobile integration: add the card to Google Pay and Apple Pay directly from the app
• Multi-currency support: directly use Bitcoin, Ethereum, USDT, and other digital assets
• Cash withdrawals: access to ATMs with NFC readers to withdraw up to 20,000 euros per month
• Free transfers: send cryptocurrencies without fees to family, friends, and acquaintances
• Referral programs: invite other users and earn percentages on their trading fees.

These solutions represent the new generation of crypto payment tools, combating traditional complexity with ease of use and total transparency.

Conclusion: the future of spending in cryptocurrencies

Crypto cards are one of the most practical and fastest ways to integrate cryptocurrencies into everyday life. If you have cryptocurrencies that you no longer wish to hold long-term, a crypto card greatly simplifies the process of converting to traditional currency and immediate spending.

Without a crypto card, converting and transferring funds requires several manual steps and can take days depending on the bank and platform used. With a crypto card, the process is instant and transparent.

However, it is essential to always remember:

• Monitor your expenses: keep track of all transactions to comply with the tax obligations of your country.
• Understand the risks: consider price volatility and tax implications before using the card
• Compare the offers: carefully check the fees, the exchange rates, and the available bonuses.
• Use stablecoins: if possible, load the card with stablecoins to eliminate the risk of volatility

Crypto cards are likely to continue evolving, offering more features, better mobile integration, and lower transaction costs. They represent an important step towards the mainstream adoption of cryptocurrencies as a practical and everyday payment method.