Updated on 2020/3/4 – Add a new paragraph for the top-up process and a transaction that spent with the card
What is a cryptocurrency prepaid card?
A cryptocurrency prepaid card is a kind of prepaid card that connects to a cryptocurrency wallet. As a cardholder, you can use the cryptocurrencies inside your wallet to top-up/load the balance of your card. Besides this, there isn’t any difference between a commonly-seen Visa/Mastercard prepaid card and a cryptocurrency prepaid card.
Usually, this kind of card charges you a bunch of fees, such as inactivity fees, a around 2% margin on the crypto-to-fiat exchange rate, and an annual fee, in exchange for the convenience it brings to the users.
What’s special about Wirex?
First of all, Wirex is really transparent on its rates and fees and currently, it’s quite cheap compared to its competitors. The fees that they charge me now are a transaction fee and the margin on the exchange rate – for the latter, they even have a dedicated site just for their live rates.
I believe the reason why Wirex could operate on such a thin margin compared to its competitors is that they just launched an initial exchange offering (IEO) and raised 3 million USD from crypto traders so their main focus now should be expanding their business rather than reaching profitability.
(Note: for those who don’t know what an initial exchange offering (IEO) is – a good analogy would be an airline company selling their airline mileages to raise funds from potential customers and use the cash to expand their business. Whereas for the mileage buyers, they can either enjoy certain benefits by redeeming the points to the company or sell the mileages when there is more demand for it. To know more about IEO, please check here)
Secondly, Wirex should be one of the few players in the market support multiple fiat currencies as the image below shows, which will come in handy if you travel several times a year.
What does the application process look like?
The whole application process is fairly fast and you can finish it entirely inside the app – all you need to do is to type your personal information (eg names, passport number, birthday and address) and upload a photo that contains a document for identity verification, after which you’re asked to record a video to prove that you’re a real human being (specifically, the app asks you to turn your head in series of directions, and then it shows a series of numbers that you need to say in English)
Once you finish the process above, the last thing you need to do is to wait for the result. The verification speed probably depends on the type of document you submit and your nationality, but for me, I waited around 5 mins to get my account verified.
If you’re verified, you can proceed to order your complimentary card in the app. Wirex provides 2 shipping options – normal and DHL. And at the time of writing, users located in Thailand can choose any one of the shipping options for free. (Thanks Wirex!)
Why do I need this kind of product?
- I need a convenient way to spend the DAI I receive
As a person who has bought some tokenized properties on Realt, a platform lets you buy a fraction of a real estate, I receive the rent payment daily in a form of DAI, a stable coin pegged to USD on Ethereum blockchain.
Before today, whenever I want to spend the DAI I receive, I need to go through the following steps:
A. Convert the DAI in my Ethereum wallet to USDT on 1inch Exchange, a decentralized cryptocurrency exchange
B. Send the converted USDT to Bitkub, the largest cryptocurrency exchange here in Thailand
C. Convert the USDT into THB (get hit by 0.25% transaction fee)
D. Withdraw the THB to my bank account in Thailand (get hit by 20 THB withdrawal fee)
As you could see, the whole process is lengthy and costly, that’s why I wanted to give Wirex card a try.
(Note: in my use case, ie converting DAI to USD, the margin on the DAI-to-USD exchange rate from Wirex is around 0.3% more compared to the rate on Coinbase Pro on 2020/2/2) - I want to reduce the forex premium charged by the bank
We all know banks charge a premium whenever you use your card on services denominated in a different currency than your account’s. Depends on the original currency in your bank account, you could get charged 1~3% more in your local currency compared to the rate shown on Google.
And as someone who has subscribed to many services denominated their prices in USD, the 1~3% premium each time adds up quickly as time goes by.
Even if the bank you’re using supports multiple currencies in a single account, like YouTrip in Singapore or Revolut in the UK, you’re still subject to the rate provided by them and usually, there is an annual fee for that account.
Prepaid card top-up process and real transaction (Update on 2020/3/4)
Even though this piece is published on February 2nd, I didn’t have the chance to use the card until the end of February. So here are the prepaid card top-up process and a real transaction spent with the card:
To top-up your prepaid card, you need to follow the procedures below:
- Create ‘accounts’ that will hold your currencies in the app (in my case it’s a USD account and a DAI account)
- Send the cryptocurrency of your choice to the account that supports it (DAI account in my case)
- Click the ‘Exchange’ button on the account page and convert the cryptocurrency into anyone of fiat currency (USD in my case)
During the top-up procedures above, I got charged by 2 kinds of fees, which were
- Margin on the exchange rate:
the margin on the DAI-to-USD exchange rate is around 0.5% since at the time of my transaction the DAI-to-USDC exchange rate on Coinbase Pro is 1 DAI to 1 USDC but I got 0.995 USD instead. - Transaction fee:
The transaction fee is 0.5% and the fee is denominated in the currency that you exchange from – in my case where I used DAI in exchange for USD, the transaction fee was subtracted from my DAI balance first before the conversion.
Percentage-wise, the combined fee above is 1% from the original value of the DAI in my account.
Once you top-up your card, ie there is at least one fiat currency balance in your account, you could swipe your card as any commonly-seen Visa cards on every shops that accept it.
I decided to give this card a try on FoodPanda in Thailand to check their exchange rate between different fiat currencies. Here is the result:
At the moment of the transaction, the rate shown on Google’s result is 1 USD equals to 31.53 THB, which suggests there is a 0.7% margin on the USD-to-THB exchange rate provided by Wirex.
How do I like it so far?
So far I actually quite like it – the exchange rates are good (if you mainly use this card for services denominated in USD) and the overall user experience is flawless. For instance, whenever a transaction happens, Wirex app will send you a notification with the amount spent and the name of the company that requests the payment in the message, as the screenshot beneath shows:
I could foresee myself using this service more as Ethereum starts to support staking in the near future when I obviously need a way to spend the staking rewards.
If you also want to try Wirex out, feel free to use my referral link which will reward me with 5 USD in BTC when you order and use the card in the shop for the first time.
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