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Big payments players may be diving into crypto for the first time, but it’s been part of Visa’s Fast Track program since at least 2019.
Announced Tuesday, Visa has invited digital asset portfolio provider ZenGo to its Fast Track program. The startup hopes to use the program, which famously backed Bitcoin’s Lightning Network and the Fold reward app, to help launch an encrypted payment card for the United States in early 2021.
Crypto apps are the flavor of the month, with PayPal joining Square, Robinhood, Revolut, and Ziglu, all competing in this space. ZenGo CEO Ouriel Ohayon talked about the unsecured aspect of the card with Visa, which he says sets it apart from PayPal.
“Those other offers are just a half-vanilla taste of what cryptocurrency is because they only allow you to hold a bill on a cryptocurrency,” Ohayon said in an interview. “This is the only one that is tied to a user-controlled wallet where users are in control of their funds and the funds are chained.”
Visa clearly sees the value in linking crypto services to plastic cards, having just entered into a deal involving the Paxful peer-to-peer digital asset market. Meanwhile, Coinbase is also launching its Visa-branded crypto debit card in the US early next year.
The ZenGo payment card allows users to convert their cryptocurrency into fiat so that it can be spent on the Visa network and withdrawn from ATMs. The wallet uses a clever technique called multi-party computing (MPC), which breaks long cryptographic keys and can be leveraged to create a more conducive user experience. According to ZenGo, MPC saves customers from having to write down private keys or remember passwords and protects them even if their phone is lost or stolen.
“As the network of choice for digital currency wallets, we are thrilled to help innovative fintechs like ZenGo leverage the value of Visa’s network,” said Cuy Sheffield, head of cryptocurrency at Visa. “Through the Fast Track program, we can support ZenGo with access to Visa experts, technology and resources to scale efficiently.”
When it comes to integrating cryptocurrencies with a merchant network or point-of-sale payment infrastructure, Visa-backed cards aren’t much different than PayPal’s claim to connect to over 20 million online merchants. Both offers involve converting cryptocurrency into fiat to make a transaction.
But the ZenGo app is much more about current utility than future speculation, Ohayon said.
“We see an increasing number of people who want to use cryptocurrency for their daily life,” he said. “Just going to Robinhood to buy some to speculate isn’t what they want. We have real estate agents who are paid in cryptocurrency, we have photographers, DJs, freelancers of all kinds. Those guys want to be able to spend it. “
