Key Takeaways:
- Users used Visa’s crypto-linked cards to make $2.5 billion in payments in the first quarter of fiscal 2022, as per the company’s latest earnings call.
- Coinbase, Circle, and BlockFi are among the companies that have joined the payments company’s network of crypto wallet partners, which has grown from 54 to more than 65. The number of shops who accept cryptocurrency as payment has also increased to around 100 million.
- Visa has no intentions to store bitcoin on its balance sheet, but it has established a crypto consulting business and made a number of recent investments in cryptocurrency platforms.
- Visa Chairman and CEO Al Kelly stated during the company’s Q1 earnings call that the company will “continue to lean into the crypto market” as demand in crypto-linked payments develops.
According to the company’s latest earnings call, customers used Visa’s crypto-linked cards to make $2.5 billion in payments in the first fiscal quarter of 2022.
This accounted for 70% of the company’s total crypto volume in the fiscal year 2021.
“This indicates to us that users value having a Visa card tied to a crypto platform account.” In a phone interview with CNBC, Visa CFO Vasant Prabhu said, “There’s value in being able to access that liquidity, to pay purchases and control expenses, and to do so immediately and seamlessly.”
“We will continue to lean into the crypto space, and our strategy is to be a key partner to provide the connectivity, scale, consumer value proposition, reliability and security that is needed for crypto offerings to continue to grow,” Visa CEO Al Kelly said on the earnings call, as the stock rose in after-hours trading before opening strongly higher on Friday.
The investment firm also announced that its network of crypto wallet partners has grown from 54 to more than 65, including Coinbase, Circle, and BlockFi. In addition, the number of merchants accepting cryptocurrency as payment has nearly doubled to nearly 100 million.
“We don’t see the volume concentrated in a certain merchant vertical with these initiatives when we look at broad spending categories.” People spend their crypto-linked cards on various things, including retail products and services, restaurants, and travel. Prabhu told CNBC that they are increasingly being considered as a general-purpose account.
Visa announced in July that crypto card usage had hit $1 billion in the first half of 2021.
Mastercard and cryptocurrency trading Gemini intends to release a credit card to allow clients to earn cryptocurrency as a reward. On the other hand, cardholders will not have direct access to their digital wallet. Instead, the card will be offered to clients on a queue in early 2022, according to Gemini, the crypto exchange co-founded by billionaires Cameron and Tyler Winklevoss.
Visa announced in July that crypto-linked card usage had hit $1 billion in the first half of 2021.
According to Visa, back then, consumers spent more than $1 billion worth of bitcoin on goods and services through their crypto-linked Visa cards in the first six months of the year.
At the same time last year and this year, Visa estimated crypto spending at a fraction of that amount. But unfortunately, the payments behemoth could not provide exact figures.
Mastercard and cryptocurrency exchange Gemini is planning to launch a card that will allow customers to earn cryptocurrency as a reward. However, cardholders will not have immediate access to their digital wallets. Following initial intentions to launch during the summer season, Gemini, the crypto exchange co-founded by billionaires Cameron and Tyler Winklevoss, hopes to make the card available to clients on a waitlist in early 2022.
The rapid growth of significant cryptocurrencies slowed in the second part of the previous year. Since November, Bitcoin had declined more than 45% when it reached an all-time high of about $69,000.
“We’ve seen this payment volume continue to grow despite volatility in the crypto markets,” Prabhu said.
Crypto rewards, according to him, are an essential part of the value proposition for many of these card programmes, particularly for customers who are new to crypto and may not be directly investing in it but are enthusiastic about the potential to earn it while spending fiat [money like the dollar].
“We’re watching these programs closely to see how they impact the rewards category as a whole.”
Visa has no intentions to store bitcoin on its balance sheet. Still, it has set up a crypto consultancy business and made several recent investments in crypto platforms as it pushes for digital currency acceptance.
Visa CEO Al Kelly: We will continue to lean into the crypto space
As interest in crypto-linked payments grows, Visa Chairman and CEO Al Kelly indicated during the company’s Q1 earnings call that the company will “continue to lean into the crypto space.”
In the first quarter of 2022, Visa credentials and cryptocurrency wallets processed more than $2.5 billion in payments, accounting for more than 70% of total payments volume for fiscal Q1.
Visa’s first-quarter payments volume increased 20% year over year, with cross-border volume up 40% and processed transactions up 21%.
V’s stock jumped nearly 9% in a single day. Mastercard, a competitor that has dabbled in crypto product offerings, is up 8% following an excellent Q4 earnings announcement on Thursday.
