Mastercard announced on Tuesday (27) the launch of a credit card with a reward system in bitcoin (BTC) or in more than thirty other cryptocurrencies. The new product is the result of a partnership between the payments company and the exchange Gemini, founded by brothers Tyler and Cameron Winklevoss.
Called a Gemini Credit Card, the card will be launched between June and September, but there is still no set date. Initially, it will be made available to all 50 American states and, later, it should reach the other countries where the broker Gemini is present.
The card had already been mentioned in January this year, but its official announcement was only made yesterday. Mastercard will provide the payment infrastructure for the Gemini Credit Card in its first such partnership with a cryptocurrency company.
How will the card and rewards work?
At first, it is a common card in its use and issuance, allowing physical and online purchases. The credit line will be defined based on several traditional factors, such as income and financial history. The physical card will be produced in metal, will work by approximation and will be focused on security, presenting only the user’s name, while all other information will be accessible only through an application.
According to an official statement from Mastercard, the main benefit of the new product will be a reward system, similar to miles and loyalty points, but with cryptocurrencies. Customers will receive up to 3% of the amount spent on qualifying purchases in more than 30 digital currencies available on the Gemini listing, including bitcoin (BTC). Operating under the Mastercard banner, the card will be accepted at the vast majority of merchants around the world.
Another difference is that the rewards system works immediately, or in “real time”, different from the majority that operates in monthly cycles. In this way, the moment a transaction is made, the return in cryptocurrencies is instantaneous and the user can already access it.
Initially, only dollar expenditures are eligible to receive rewards in bitcoin or other cryptocurrencies. This benefit will be divided into three categories: 3% return in digital currencies on meals, 2% on market purchases, groceries and the like, and 1% on other transactions, the statement said.
Mastercard expands adherence to cryptocurrencies
“As more consumers seek to enter the cryptocurrency market, the Gemini credit card offers them a simple entry point and an easy way to earn digital coins as a reward without having to change their daily spending habits,” said Tyler Winklevoss, CEO from Gemini. According to him, Mastercard “continues to evolve, to meet the demands of industry and consumers and to commit to the cryptocurrency market”.
Linda Kirkpatrick, president of Mastercard in North America, said that the company’s strategy center seeks to offer customers flexibility in the form of payments, while still anticipating future demands. “Our work with Gemini is based on this position, connecting consumer needs with next generation digital assets and providing an innovative experience that redefines the future of credit card rewards and benefits.”
Cryptocurrency plans go further
In early February, Mastercard announced that it will integrate cryptocurrencies into its payment system throughout 2021. This recent partnership with Gemini in the launch of the new credit card is the first concrete step taken by the company in this direction. However, his plans are more ambitious.
Mastercard wants to offer the processing of transactions with cryptocurrencies in a way still very little seen in the market: With direct payments with digital currencies, instead of making intermediary conversions to fiat money at the time of purchase.
“Cryptocurrencies still don’t move on our network. Our partners in the crypto industry convert digital assets into traditional currencies and then transmit them to the Mastercard network. Our move is to offer direct support for digital currencies, which will allow more merchants to accept cryptocurrencies, ”said Raj Dhamodharan, head of crypto products at the company, in a post on the official blog.
For him, offering this type of service in a fully accessible way and on a global scale is very important since “these digital assets are becoming a more important part of the payment world”.