Cryptocurrency exchange Binance has announced a partnership with payments processing firm Simplex, allowing users to purchase crypto with Visa and Mastercard credit or debit cards. The feature went live today, January 31, enabling the exchange's customers to use their card to purchase bitcoin, Ether, Litecoin, and Ripple's XRP.
Simplex will charge 3.5 percent of a transaction, with a $10 minimum purchase amount. Buyers will be limited to a $20,000 maximum for daily purchases when using a credit or debit card, as well as a $50,000 maximum monthly limit. Users will also be subject to area restrictions, which include Cuba, Iran, and Iraq. In the US, New York, Connecticut, Hawaii, Georgia, New Mexico, and Washington will also be excluded. The restriction page also notes that, because Simplex is subject to bank policies, "Some issuer banks may decline charges on their own terms, regardless if users reside in a supported jurisdiction."
Early this month, Changpeng Zhao (CZ), the CEO and founder of Binance, spoke with blockchain blog Boxmining at the Binance Blockchain Week conference in Singapore. In the interview, CZ touches on the moves Binance wants to make in 2019, including creating fiat "on-ramps" to bring cryptocurrency to more users by expanding the ways in which they can purchase crypto.
The launch of Binance's credit and debit card offer is part of this move to create more on-ramps for individuals interested in becoming part of the cryptospace. Binance is the largest exchange by adjusted trading volume according to CoinMarketCap, which means a project like this has the ability to promote wider crypto adoption on a large scale. Both CZ and Nimrod Lehavi, the co-founder and CEO of Simplex, list this as a key reason for the companies' partnership.
Binance isn't the first exchange to allow users to purchase cryptocurrency with a credit or debit card, and it's worth asking how long they will be able to continue to offer this payment method in its present form. In February 2018, crypto exchange Coinbase disabled the option to add new credit cards as payment for US customers. The change came in the wake of JPMorgan Chase, Bank of America, and Citi barring credit card holders from purchasing cryptocurrency. The UK's Lloyds Banking Group and Virgin Money both followed suit, banning customers from purchasing cryptocurrency with a credit card.
Despite area restrictions and credit card issuers pushing back, it will be interesting to see if Binance can help usher in wider crypto adoption, especially in smaller markets like Europe, where, by at least one tally, the Euro only accounts for under 4 percent of the global bitcoin volume (at time of press).
Earlier this month, Binance officially launched Binance Jersey, part of its expansion drive. The new exchange offers four fiat-crypto trading pairs to its users: Bitcoin or Ether to the British pound or euro.