Big payments players may be dipping their toes 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 wallet provider ZenGo into its Fast Track program. The startup hopes to use the program, which has famously championed Bitcoin’s Lightning Network and rewards app Fold, to help launch a crypto-integrated payment card for the U.S. in early 2021.
Crypto apps are the flavor of the month, with PayPal joining Square, Robinhood, Revolut and Ziglu, who are all competing in this space. ZenGo CEO Ouriel Ohayon talked up the non-custodial aspect of the Visa-backed card, which he says sets it apart from the likes of PayPal.
“Those other offerings are only a half-vanilla taste of what crypto is because they only let you own an IOU over a cryptocurrency,” Ohayon said in an interview. “This is the only one that is tied to a user-controlled wallet where the users have control of their funds and the funds are on-chain.”
Visa clearly sees the value in linking crypto services to plastic cards, having just tied up a deal involving peer-to-peer digital asset marketplace Paxful. Meanwhile, Coinbase is also launching its Visa-branded crypto debit card in the U.S. early next year.
The ZenGo payment card allows users to convert their cryptocurrency into fiat so it can be spent in the Visa network and withdrawn from ATMs. The wallet uses a clever technique called multi-party computation (MPC), which breaks up 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 preferred network for digital currency wallets, we are excited to help innovative fintechs like ZenGo harness the value of Visa’s network,” Cuy Sheffield, head of crypto at Visa, said in a statement. “Through the Fast Track program, we can support ZenGo with access to Visa’s experts, technology, and resources to scale with efficiency.”
When it comes to integrating crypto with a network of merchants or point-of-sale payments infrastructure, Visa-backed cards are not remarkably different from PayPal’s claim about connecting to some 20 million-plus online merchants. Both offerings involve converting crypto to fiat to make a transaction.
But the ZenGo app is much more about current utility than future speculation, Ohayon said.
“We see a growing number of people who want to use cryptocurrency for their daily lives,” he said. “Just going and buying some from Robinhood to speculate is not what they want. We have real estate agents who get paid in cryptocurrency, we have photographers, DJs, independent workers of all sorts. Those guys want to be able to spend it.”