Dive Insight:

• Marqeta, the card issuing company, has partnered with Shakepay, a Canadian fintech company that helps consumers in buying and selling digital assets, to offer a card for its app users. 

• The card will allow customers to convert digital currencies like Bitcoin and Ethereum into Canadian dollars and spend it at physical and online stores.

• Many other crypto currency exchange platforms like Gemini, Coinbase and Crypto.com are also offering digital currency cards as more people acquire digital assets. According to Bitcoin Market Journal, there are over 100 million bitcoin wallets across the world holding digital assets worth billions of dollars. Companies are looking for options to provide payment channels for these digital currencies, said Brandon Rembe, senior vice president at Envestnet's Yodlee unit.

Dive Brief:

Montreal-based fintech Shakepay, with an app that allows Canadian users to buy, sell and pay their peers in bitcoins, is partnering with Marqeta to launch a Visa prepaid card allowing them to spend money directly from their card. 

“What that looks like at the most basic level is being able to take the crypto wallet that exists inside Shakepay and creating a payout functionality,” said Salman Syed, senior vice president of Marqeta in North America. “I take my balance that may be in crypto to get it converted to Canadian dollars and then put it on a card and use it in multiple different places.”

Customers who hold bitcoins can either transact in with the digital asset or convert it to Canadian dollars to pay their peers. Marqeta will issue digital, physical and tokenized cards that use near-field communication (NFC) compatible technology, or tap-and-pay, for Shakepay consumers. 

Shakepay has facilitated more than CA$2 billion in purchases and sales of digital assets on its platform since its incorporation in 2015, serving more than 420,000 Canadians.

The new card offering will allow customers to convert digital assets into fiat currency and transact in real time. The card is powered by Visa and issued by Marqeta’s sponsoring financial institution, People’s Bank.

Marqeta aims to expand the offering to many different use cases. The card technology is designed to be used by other vendors who have a similar real-time crypto currency payout functionality, Syed said.

“There's really been two schools of thought, one school of thought has been, 'well, what will happen with crypto will ultimately replace what already exists,'” Syed said. “And then there's the other school of thought which says 'crypto needs to find a way to integrate with how the rest of the world already operates.' We believe [the latter is] probably a more compelling strategy and I think what we're watching Shakepay do here is clearly an example of that.”

With the rising popularity of crypto currencies, people are buying and holding digital assets at a higher rate. Market capitalization of crypto assets has skyrocketed to over $2 trillion in 2021, compared to $128 billion in 2018, according to Statistica.com.

“Platforms that hold these assets are looking to get their customers to use them,” Rembe said. “It will not only generate an alternative source of revenue, but also help in increasing the acceptance towards the digital asset class.”

Marqeta, which issues cards for companies like Square, Goldman Sachs, Affirm, Instacart and DoorDash, has nearly doubled its total issued cards to 270 million in 2020, compared to 140 million in 2019.

The Oakland, California based-company has been investing heavily in alternative cards, like BNPL versions, and plans on rolling out more products in that vertical later this year, Syed said.