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The Use of Crypto Cards with Cashback Grows in Argentina

Cryptocurrency Feb 22, 2022 05:00AM ET
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The Use of Crypto Cards with Cashback Grows in Argentina

  • Argentine businesses are offering a variety of payment options, including cryptocurrencies through wallets like ‘Balo.’
  • To encourage the use of digital currencies, “rewards” are being offered in the form of refunds of up to 21% of the total purchase.

Crypto cards are being incorporated as a new payment option among Argentine businesses. As the adoption of cryptocurrencies grows in the South American country, several Wallets have established agreements with companies such as Mastercard (NYSE:MA) and Visa (NYSE:V) to enable the offerings for their users.

In Argentina, at least three companies have been promoting crypto cards since last year, and this week the Belo app launched its first Mastercard-backed crypto card. As a pilot test, the service will initially be made available to around 1,000 users who have registered use it.

Following this test phase, many more clients are expected to be incorporated into the scheme and will receive these cards in both physical and digital form. Each of the cards sent out are expected to be fully operational by the first week of March, and in April the company plans to issue cards to other users on the waiting list.

"In December we launched this proposal in a waiting list format and from this week they will begin to reach the first 1,000 users who requested it," explained the CEO and founder of Belo, Manuel Beaudroit, in a statement to local newspaper 'Clarín.' On its website, the application promises its customers the ability to “move [funds] in pesos and cryptocurrencies so that their money is worth more,” making digital money an “everyday experience.”

Wallets Attract Customers Through Cashback

Some experts, like Jack Mallers, the CEO of the Strike wallet which was introduced in Argentina earlier this year, are surprised by the rapid adoption of cryptocurrencies in the country, and especially that of crypto shopping apps.

Through his Twitter (NYSE:TWTR) account, he illustrated the economic reality of Argentina while extolling the Bitcoin blockchain network:

“Welcome Argentina! Today, we launch a superior financial experience in a country that faces hyperinflation, predatory payment networks, and unusable cross-border transfers. Today, we use the world's open monetary network, Bitcoin, to give hope to the people of Argentina.” In the same was that many banks do, virtual wallets are competing for customer acquisition through the “cashback” scheme. This system allows Argentine consumers to earn rewards, which will be randomly credited to their account when using the company’s card to pay for goods and services at local businesses.

The amount of cashback received through the use of the Belo crypto card ranges from 2% to 21% of the total spent, though the benefit has a monthly cap for of 100,000 Argentine pesos in crypto. In addition to this, the provided returns will be made in a specific type of cryptocurrency, which could be either Bitcoin, Ethereum, Dai or USDT, explained Beaudroit.

"The idea is that this is a surprise until the moment of its accreditation, but that it allows savings to be diversified and is a good gateway to the crypto world," underlined the executive.

“There Is a Lot of Interest from Users”

The Vice President of Products for Mastercard's Southern Cone, Fernanda Lloret, said that the company had been working on the project for several months. “Mastercard has experience developing other crypto wallets in both the U.S. and Europe. In Argentina there are several companies interested in this type of launch, but Belo was the last one," the executive added. According to Lloret, “there is a lot of interest from users in these new means of payment, both in digital formats and in physical stores.” She commented that in a survey carried out by the company in early 2021, around 40% of users claimed to be willing to use cryptocurrencies as a means of payment.

"I think that if we repeat these studies again this year, that percentage will be much higher, especially in the segment of millennials and centennials," she added.

On the Flipside

  • The financial problems that the country finds itself mired in, paired with the constant depreciation of the Argentine peso against the dollar have led the population to seek alternatives such as business and savings cryptocurrencies.

Why You Should Care

  • Competition for the Argentine crypto market grows fiercer every day.
  • Argentina appears together with Venezuela in the Top Ten by use of cryptocurrencies in the world.
The Lemon digital wallet has also issued its Visa-backed crypto card, which provides users the option of paying with Bitcoin and Ethereum in physical and virtual stores alike. For each purchase made, users receives a rewards in the form of a fraction of BTC.

The card allows the automatic conversion of cryptocurrencies to pesos. Through the use of such cards, customers can receive a 2% refund of the total purchase in BTC. Within only the first month of the card’s launch last year, more than 400 million pesos in bitcoin were given out by the company as cashback.

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The Use of Crypto Cards with Cashback Grows in Argentina
 

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