Why there are still far fewer cryptocurrency users than cryptocurrency holders who need cryptocurrency cards, and the benefits they have, is shared by the virtual bank TTM bank Vladislav Utushkin.
– The first crypto cards, analogues of bank cards that can be replenished with cryptocurrencies, appeared more than five years ago, but even among crypto-asset holders, not everyone can boast of having one. Why is the popularity of crypto cards lagging behind the growth rate of the crypto market?
– In fact, until recently, not every cryptocurrency holder had a crypto card. This is due to several limiting factors that have hindered the development of this sphere and in some cases still hinder it. First, the card is primarily about everyday payments: shops, restaurants, or plane tickets. Most of these companies do not accept payments in cryptocurrencies directly. Not to mention Russia, where it is illegal to accept payments in cryptocurrencies. In order to use crypto cards, there must be a work scheme with instant conversion of cryptocurrencies to fiat money, called a payment gateway, through which the crypto is converted to fiat with minimal losses in the exchange rate difference. Second, there is still no such crypto card available to a resident of a jurisdiction. The American market has its own leaders, the European and Asian markets are dominated by other players, while we are the only company in the Russian market that offers crypto cards. The reasons for this are difficult to explain. I suspect this is partly due to the creators’ lack of expertise in how to operate under different jurisdictions and how to adapt to local regulations.
Third, almost all crypto cards assume that they will deposit money from the wallet on the associated platform. Simply put, to top up most crypto cards, you must first transfer coins to the virtual wallet on the appropriate platform, and then transfer money to the card account. In addition, the cryptocurrencies are converted into one of the fiat currencies at the time the card is topped up. This means that a user agrees to store some funds in a third-party wallet. What if it gets hacked? What if the project turns out to be a fraud? And a million “what if”. The main advantage of cryptocurrencies is that their holders have complete control over their funds. However, if a user agrees to transfer money to a third-party wallet, how is such a card different from a card issued by a traditional bank? This benefit disappears as the holder has to take more actions to get the card.
– What is the primary target group for crypto cards?
– Most often these are people who receive a salary in cryptocurrencies and the number of these people is growing every year because of their advantages in the field of international payments. These are also people who want to use cryptocurrencies not as an investment or trading instrument, but as a payment method for their daily purchases. These are people who prefer to convert cryptocurrencies to fiat only in cases of absolute necessity or in certain situations.
– Would you say that the crypto card market has matured and now has sustainable market leaders?
– In my opinion, no. As I mentioned earlier, most projects with crypto cards have a lot of limitations, mainly geographic ones. In the US, for example, BitPay could be the market leader. Before the problems with the Wirecard payment system occurred, the European market was dominated by Wirex. TTM Bank is the market leader in the Russian market.
– So it seems that there are already at least a dozen companies in the market that work with prepaid crypto cards. How is TTM Bank different from you?
– Firstly, cryptocurrencies that are credited to the TTM bank Card are instantly converted into fiat money. Other similar products have a time delay and the user must wait for the replacement process to complete. Second, TTM bank cards are accepted anywhere in the world that VISA cards are accepted. We have almost no geographic restrictions. TTM Bank is the only cryptocurrency card available to citizens of Russia and the CIS. It is a practical and reliable tool for daily shopping in online and offline stores. This is kind of a connection between the traditional financial system and the world of digital currencies.
– You said that when credited, crypto assets are instantly converted to fiat So the credit on the card is not stored in cryptocurrencies?
– It is now possible to top up the TTM bank card with currencies such as BTC, ETH, TRX and USDT. We also plan to add two more cryptocurrencies in the near future: BNB and Bitcoin Cash. To refill the card, users need to transfer the required amount from a personal wallet to the card account. I mean that users can deposit funds from any personal wallet of their choice. There is no need to transfer money to another wallet on another platform. When crediting, the cryptocurrencies are converted into euros. The volatility inherent in the digital market therefore does not in any way affect the currency stored on the card. This is a very important aspect of everyday shopping.
– Is it possible to pay with a card, for example for utilities?
– Of course! It is possible to pay for goods or services, including online shopping or booking a taxi.
– Is it possible to use the card to store funds? How convenient is it?
– The TTM bank card was not designed to store cryptocurrencies. It is not a warehouse. The card is intended for online and offline purchases. Your digital assets are stored in your wallet and you have full control over them. If you need to pay for goods or services, you can send the required amount of cryptocurrency to the TTM bank card. The credit is credited to the card and converted into euros within a few minutes.
We deliberately opted for such an approach. Any attempt to make storage space out of a crypto card leads to nowhere. We wanted to create a card that is convenient to use in everyday life and that can be charged with cryptocurrencies. The market needs crypto cards for daily shopping, no additional storage or wallet for bitcoins. At the same time, users don’t have to transfer their coins for safekeeping – they control their assets independently, avoiding unnecessary risks.
Imagine you are sitting in a restaurant, receive a bill and want to pay with cryptocurrency. All you have to do is log into your own (not our) wallet – the one you are used to, where you normally keep coins – and send the required amount of cryptocurrency to top up the TTM bank card. The money is credited immediately so that the TTM Bank cardholder can easily pay the bill.
– How is the TTM Bank crypto card connected to the VISA payment system?
– We work with the financial services operator who is a member of the Visa payment network. Our partner UAB Walletto is a well-known company that is registered in Lithuania and has accounts with a licensed bank. Thanks to this partnership, TTM Bank’s crypto card can be used almost worldwide, with the exception of countries like Afghanistan, Somalia, Sudan, Syria, Yemen, Venezuela, the Gaza Strip and a few other regions.
– Are there any restrictions on deposits or transactions?
– Yes, and these limit values are set in European legislation. The maximum card is 5,000 euros, the same limit applies to purchases per month via POS terminals or online platforms. The monthly limit for withdrawals from ATMs is 2,500 euros.
However, users hardly notice these “restrictions” as the TTM bank card is designed for daily shopping and its costs can rarely exceed the specified limits. Even very wealthy people don’t go to restaurants where the bill is in excess of several thousand euros that often.
For customers who exceed these limits, we recommend ordering multiple cards. With TTM Bank, our customers can issue up to five cards per user, which formally increases the spending limit fivefold. You can distinguish these cards according to the type of spending: one for stores, one for online purchases, one for restaurants.
– How profitable is it to pay with such a card?
– If you have cryptocurrency income, it will be more convenient for you to spend on digital coins. But there is a trick: now it seems that almost everyone can make money from cryptocurrencies, but few people know how to spend what they earn in everyday life. And the TTM bank card solves this problem perfectly, because with it you can easily go to the nearest supermarket to buy groceries.
The successful POS transaction from TTM Bank is EUR 0.25 per transaction. The monthly service fee per card is EUR 2.00. The highest is the payout at the ATM: 2.50 EUR + 2.00%. However, this is the standard fee for most virtual bank cards without their own ATM network.
– At the end of 2020, TTM Bank’s user base was more than 40,000 active users per day. How did you manage to grow the number of users so quickly?
– I believe that other projects have helped us, or rather their significant shortcomings. For example, some crypto cards are tied to a hot wallet that stores digital assets, thereby removing control of their money from cryptocurrency holders. Other companies are trying to introduce internal tokens to raise funds for this purpose through ICOs, and this method doesn’t have a very good reputation after the 2017 boom with numerous scam projects. Some projects have a number of limitations – they don’t work in certain regions or with citizens of certain countries.
But even those professionals who are familiar with cryptocurrencies need a user-friendly, convenient and secure card with which they can pay for goods and services around the world, book flights and withdraw cash worldwide.
– The TTM Bank website states that the crypto card is reliable and secure. What does it mean exactly?
– Firstly, a few months ago we changed our jurisdiction from Hong Kong to the European Union. And this is not only a more convenient way for the citizens of Russia and the CIS, but also safer, as Europe has already learned to be “friendly” with crypto assets and has even developed a reliable data protection regulation (GDPR) that protects Your funds from unnecessary risks. Your credit is now safely protected.
Second, we have developed a fully secure cryptocurrency wallet for our users that is part of the TTM Bank infrastructure. This allows our customers to use private keys that are stored in the system and never leave them. In addition, all cryptocurrencies are now stored in one place.
Finally, we changed the card design to make it more secure. Until recently, our customers could accidentally compromise their card number or personal information by posting them on Instagram or other social networks. This problem was quite acute as it harmed the interests of both the cardholders themselves and the company, but we also solved it. The current design has become more concise and simpler. We removed a logo and personal information from the front of the card. Now our customers can easily share photos and videos with the card without any security risks.
Thanks to the new concise design of the cards and the use of the EU General Data Protection Regulation (GDPR), the personal data of our users are reliably protected from hacking or compromise.