If you’ve ever thought that your debit and credit cards are just a little bit to light and fragile, then digital bank Revolut may have the answer. The high profile fintech company has just launched a ‘metal’ debit card for its premium customers, and those that like to feel a bit of reassuring weight in their wallets may relish the fact that the new product is significantly heavier than its plastic counterparts. Perhaps more interestingly, the metal card also offers up to 1.0% cashback in both conventional and virtual currencies, such as Bitcoin.
Made from reinforced steel – and thus weighing three times as much as a plastic card – Revolut’s Metal is being marketed as a premium product, costing £12.99 a month and if the company’s blog is anything to go by, there is already a waiting list of customers.
The monthly price tag is justified by a range of ‘benefits’ that are of particular interest to those who travel a lot or transfer money into overseas currencies. Those benefits include
- interbank rates on foreign exchange (also available with the company’s no cost cards)
- unlimited currency trading volumes
- up to £600 worth of free ATM withdrawals every month.
Meanwhile, spending on the card generates cashback, with the option of taking the benefit in any conventional currency, or a virtual alternative, such as Bitcoin, Litecoin and Ether.
From Pounds to Bitcoins
So what does that mean in practice? Well according to Revolut, anyone spending £1,000 a month stands to earn up to £10 cashback pounds, just under $13.00 or around 11.00 euro, based on current exchange rates. Those who opt to go virtual can expect 0.4 Litecoin or 0.2 Ether.
Those figures need to be treated as broad indicators only. Not only do exchange rates vary but so do the percentages paid out in the form of cashback. For instance, spending in Europe generates a smaller amount of cashback (0.1%) because bank processing charges are higher. Elsewhere in the world, the rate comes in at the headline figure of 1.0%.
A Step Beyond Plastic
Revolut is not the only player to take a step beyond plastic. German-based digital bank N26 also markets a metal card that comes with a range of extras, including
- travel insurance
- hotel discounts
- free days at branches of the WeWork shared workspace chain.
It costs 15 euros a month.
Both cards are intended to make a statement – set them alongside your Macbook – and are pitched at an audience of relatively well-off and travel-focused millennials. Arguably Revolut is also hoping to attract those who have an interest in collecting or transacting with virtual currencies and that could be a growing market.
Boom and Bust
But that Begs a question. Are virtual currencies, such as Bitcoins – of any real use to the everyday consumer – even if that consumer is globetrotting millennial?
Until relatively recently, the main attraction has been the investment potential of cryptocurrencies. For instance, at the end of 2017, the value of a single Bitcoin rose to a staggering $19,000 (around £15,000) before falling sharply in the new year. As things stand, the currency is worth around $7,000 (£5,400) but some analysts are predicting it will rise again to above $20,000 before the end of 2018.
Given that many investors bought into the currency when it was priced in hundreds rather than thousands of dollars, huge gains have been made. Equally, those who bought at the peak of the market are currently looking at substantial losses.
Any profits that are made through virtual currency investment have traditionally been relatively difficult to spend. Essentially, you would have to transfer money out of the digital wallet that holds the currency, convert it into a conventional currency of choice, and then put it into a bank account.
But times are changing. Cryptocurrency usage may not as yet have entered the mainstream, but according to online statistics provider Statista, there are now more than 28 million people in the world who possess virtual coins in electronic wallets and they want to spend some of that cash.
Today, the simplest way to do that is to apply for a debit card linked to a crypto-currency. Unlike a traditional debit card, which withdraws money from your bank account when you spend, a crypto-debit card takes the money from your virtual wallet.
In practice that means the consumer can spend as normal in shops, restaurants, bars, etc, using cards that – from the merchant’s point of view – are no different from those issued by Barclays, Lloyds or indeed any of the High Street banks. Indeed, the crypto card will bear a Visa or Mastercard Logo. All payments are transferred to the merchant in the chosen local currency. It has to be said that Visa suspended some of these cards earlier in 2018.
From the point of view of the cardholder, there certain advantages to having a crypto debit card, not least that any rise in the underlying crypto-currency will mean a boost in spending power. The downside is, of course, that should the value of the currency in the wallet fall, you’ll have a lot less to spend.
The use of crypto debit cards is by no means common but they are gaining traction among those who have invested in one or more virtual currencies, That is, in turn, creating opportunities for innovative financial technology companies such as Revolut to create new products that incorporate cryptocurrencies into their wider banking and card offers.