BitCoin funded debit cards

[Eugen Leitl]

http://www.forbes.com/sites/jonmatonis/2012/05/07/bitcoin-funded-debit-cards/

Bitcoin Funded Debit Cards

Yes, itbs entirely possible to fund your existing debit card, or credit card,
with your accumulated bitcoin. And I donbt mean that you are shipped a
generic, low-limit prepaid VISA or Mastercard from some anonymous reseller. I
mean that you convert bitcoin online to dollars or euros and the funds are
available to spend with a card that you are most likely already holding in
your wallet.

Why is this so significant? Itbs important because it leverages a
little-known type of transaction that is available on the VisaNet system
called bOriginal Credit Transactionb. The other major card payment networks
have a similar feature too. These transactions act like a refund or credit
transaction when you return an item to a store except that they donbt have to
be associated with an original purchase. Essentially, they enable your card
to be a two-way payment device. Surprisingly, not many financial institutions
have taken advantage of this feature yet but I expect that to change.

Visa Personal Payments, already offered by financial institutions outside the
U.S., became available in the U.S. market last year marking the first time
that a major payment network has introduced a global requirement for account
issuers to accept incoming funds. Itbs the technology behind now-merged P2P
service providers ZashPay and Popmoney.

Previously, it was cumbersome for bitcoin account holders to transact in
national currencies because they had to go through one or more exchange and
then wait further for funds to arrive in a bank account or other intermediary
like the formerly bitcoin-friendly Paxum. Now these personal payments are
being offered by e-currency exchanges as a way to provide easy worldwide
access to e-currency account balances most notably by AurumXchange. The
digital currency exchange operated by Dominica-based Aurum Capital Holdings,
Inc. supports bitcoin as well as Liberty Reserve, Pecunix, Perfect Money, and
c-gold and they offer two choices for cashing out into a card-based product.

The first option is the Withdraw2Card service that does not require any
sender identity verification. Requiring only the destination card number and
expiration date (name and CVV code are not required), funds can be
transferred to any credit or debit card in any country in the world. If the
destination account currency is not dollars or euros then it will be
converted to the native currency automatically. Service fee is $9 plus 1.99%
(for MtGox USD) with a $1,000 maximum transfer amount and you should not send
more than the credit cardbs limit. The bitcoin portion of the transaction is
accomplished through the use of redeemable coupon codes from the popular
bitcoin exchanges that act as digital bearer certificates. According to
AurumXchange, they plan to offer direct two-way convertibility for bitcoin in
the near future so you wonbt need the redeemable code.

This service is ideal for regions of the world where a large majority of the
population may not have bank accounts or where international wires are
cost-prohibitive. AurumXchangebs General Manager Roberto Gutierrez explains,
bThe service so far has been tremendously popular. Just counting countries
alone where people donbt have access to bank accounts or foreign wires are
highly taxed or scrutinized, such as Africa, Brazil and China to name a few,
we have processed over 3,000 orders since we started a few weeks ago. North
American and European customers have been using the service quite a lot as
well especially for small transactions that would otherwise be too expensive
to conduct through means such as international wire transfers.b

The second option is the AurumXchange Premium Mastercard issued through North
Carolina-based Four Oaks Bank which comes with instant funds availability.
After a $24.99 two-year membership fee, the card will be shipped for free
anywhere in the world via first class mail.

OKPAY is another interesting provider in the bitcoin debit card space. They
offer the OKPAY Debit Card which is issued by CSC24Seven.com Limited, a
financial institution licensed by the Central Bank of Cyprus to issue cards.
Founded in 2007, OKPAY, Inc. is a subject of British Virgin Islands (BVI)
regulations.

Now that they have completed their bitcoin integration into the OKPAY system,
it is possible to fund your OKPAY account directly with bitcoin, withdraw via
bitcoin, and use bitcoin as a payment option for purchases of goods and
services. Although, they do not offer the Original Credit Transaction feature
to any card, they will provide timely and direct conversion of bitcoin to
their proprietary Mastercard product.

By removing friction from the process, bitcoin becomes easier to spend
overall because not every merchant will accept bitcoin directly for payment
yet and not all transactions demand irreversibility and privacy. Logically as
a consumer, you may still want your VISA chargeback rights for certain
purchases. The Original Credit Transaction is an excellent way to leverage
the legacy card payment network to facilitate the growth of the bitcoin
network and these two exchangers are in the vanguard.

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