Casares explained that Xapo added the product due to demand from current customers who have wanted a way to spend the roughly 10% of their funds (on average) they keep in the company’s hot wallets. The remainder is stored securely in cold storage.Said Casares:“I think that this product is for existing customers who are asking for it. I expect a lot of the current customers to be using it.”Casares indicated that the ability for users to connect multiple cards to accounts may be added in the future, should customers request the feature.How it worksCasares said that Xapo receives all transactions when they are initiated by card users at the point of sale.From there, the company analyzes the account to determine whether there are enough funds to support the transaction. If so, the company authorizes the purchase immediately and sells the requisite amount of BTC via bitcoin exchange Bitstamp.
Merchants receive their payment in local currency and, to MasterCard, Casares said, the transaction appears just like any other local transaction.Casares went on to explain that the offering is different than the available prepaid options from Coincard and Cryptex, which need to be preloaded with bitcoins and that, he said, require users to manually convert bitcoins to local currency before purchase.Explained Casares:“This one is just like a debit card, because it debits from the wallet directly. You don’t have to be thinking about funding it and how much and when the conversion happens.”Xapo users, by comparison, only need to move bitcoin from their cold storage vaults to their company-issued hot wallets when more funds are required.Consumer focusThough best known for its secure bitcoin vault storage product, Casares told CoinDesk that the Xapo Debit Card is consistent with his company’s mission of becoming a viable, consumer-focused bitcoin bank.Said Casares:“We’re not a wallet company or a payment company. We are a bitcoin wallet, we are a bitcoin bank. Consumers need convenience and that’s why we provide our MasterCard debit card and why we will keep adding products based on our customers want.”Casares went on to stress Xapo’s commitment to consumers, stating that the company will never have merchant customers or offer merchant services.The launch follows Xapo’s 13th March announcement that it raised $20m in funding from Benchmark, Fortress Investment Group and Ribbit Capital.Images via Joshua Alvarez of The Hatch Agencydebit cardmastercardxapoOriginal author: Pete Rizzo