The startup behind the bitcoin-friendly shopping app Fold just joined the Visa Fast Track Program to issue a card that offers bitcoin rewards instead of traditional reward points.
Fold founder Will Reeves said an email poll of roughly 30,000 Fold users revealed 90 percent said they would “switch spending away from their existing card” for a card with bitcoin (BTC) rewards for dollars spent. The waiting list is now open for the Fold card that starts shipping in July.
“You manage everything within [the Fold app], your card details, your rewards,” Reeves said in an interview. “We’re able to send out to your [bitcoin] wallet of choice. … You don’t have to wait to accrue too much of it [bitcoin].”
There are already several companies offering Visa cards so bitcoiners can spend cryptocurrency as dollars, including Coinbase, and options for shopping on desktop with most cards for bitcoin rewards, with the browser-plugin Lolli.
Both Lolli and Fold App have seen a dramatic increase in online shopping for essentials and home equipment since the coronavirus crisis hit the United States. Fold users are buying more gift cards for Amazon and Target, while Lolli shoppers are spending more at Sam’s Club, Vitacost, Best Buy and Newegg, according to Lolli’s head of communications, Aubrey Strobel.
“We’ve seen an uptick in volume the entire month,” Reeves said of the 24,000 transactions by Fold users in Q1 2020. That represents a 110 percent increase over Q4 2019, with “thousands of new users.” Across the board, companies that help retail users accrue bitcoin have generally performed well during the broader market turndown.
The goal of this new card is to “meet consumers where they’re at,” Reeves said, “giving users the ability to accrue and use bitcoin in their daily lives.”
Earning, not spending
Fold investor Meltem Demirors once owned one of the first bitcoin-affiliated cards, a Shift debit card for spending bitcoin. She said Fold’s new product is unique because the card enables people to earn rather than spend bitcoin.
“The capital gains [taxes] for [spending] are just such a pain,” Demirors said. “I’ve been spending [dollars] nonstop with Fold.”
Users can already shop directly through the app and earn rewards for using the Lightning Network option, for example, while they wait for the Visa program to roll out later this year. Users can choose to spend bitcoin with this feature, but most seem to prefer spending dollars for bitcoin rewards. The average transaction size in Q1 2020 was $55, according to Reeves.
Fold certainly won’t be the last team to explore bitcoin-related credit cards. When asked if the exchange Kraken was exploring a Visa card program like Coinbase or Fold, Kraken bitcoin strategist Pierre Rochard answered, “We’re always looking to better serve our customers.”
NFL player and Fold investor Russell Okung said in a press release the Fold Visa card now “represents a significant step towards mainstream adoption of Bitcoin.” In the press release, Visa Global Head of Fintech Terry Angelos said Fold joined a program that offers “unprecedented access to Visa experts, technology, and resources.”
Update (April 9, 15:21 UTC): The new offering from Fold isn’t a credit card. It’s a “debit card but has the rewards levels you’d expect from a credit card,” Fold CEO Will Reeves said after publication of this article.