Africa has a growing crypto market. While most countries have banned cryptocurrencies, South Africa is among the few that have legalized its use and created regulations to protect its citizens. In fact, South Africa, besides Kenya and Nigeria has the highest number of crypto users in Africa.
As cryptocurrency use increases, several crypto card companies are setting their eyes on South African crypto users. Crypto cards have therefore become a viable option for many, especially those who want to spend their crypto without exchanging it for fiat currency.
For individuals intrigued by cryptocurrencies but unsure of how and where to utilize them, read further. In this discussion, we will delve into the functioning of a crypto virtual card and explore the available options for South African cryptocurrency users, shedding light on ways to make practical use of digital assets.
How do crypto debit cards work?
Crypto cards are a payment method used by crypto holders to spend their digital assets or withdraw from an ATM without changing them into traditional currency. Different crypto exchanges have partnered with credit and debit card companies to process such transactions.
To use a crypto debit card, one must preload it with the amount of crypto you need to change. The cryptocurrency will then be automatically converted to fiat currency when you use it.
Though some crypto debit cards allow immediate processing once the card is acquired, others require one to stake the crypto on their platform for a while before receiving a card. Additionally, some also offer certain rewards according to the user’s balance.
In South Africa, cryptocurrency is taxed and each time you use a crypto debit card, the South African Revenue Service (SARS) considers it a taxable event either as a capital gains tax or income tax. This depends on whether the transaction is considered an ‘investment’ or a ‘trade’.
Tips on choosing a crypto debit card
The choice of which crypto debit card you should get depends on your portfolio and spending habits. However, there are other factors one should consider before getting one.
- Fees. Crypto cards have conversion and transaction and conversion charges and one must compare costs before choosing a card.
- Adoption. Another factor to consider is to ensure the card is accepted by the merchants you typically use. You should also confirm whether the card is supported by major platforms like Visa or Mastercard.
- Spending limitations. Each crypto card company has its own spending limits and if you are planning to frequently use a card, ensure the threshold meets your requirements.
- Geographical imitations. Not all crypto debit cards are available in the country. Therefore, before getting one, make sure you can use the card to make purchases in the country. You can find this information on the card’s website.
- Cryptocurrency offered. When choosing a crypto debit card, ensure you check its crypto portfolio because each card has its own offerings and you need one that supports your desired currency.
- Rewards. Some crypto debit cards offer rewards or cashback spending on the platform’s requirements. Check what type of rewards are offered and if the rewards are restrictive.
- Staking requirements. As already mentioned above, some cards require one to hold some crypto on their platforms before allowing a user to access a crypto debit card.
Crypto cards available for South Africans
Cryptopay
Cryptopay is a Bitcoin wallet registered in the EU and the UK. Since its inception in 2013, Cryptopay now offers services to different countries outside both regions, including South Africa.
Cryptopay provides users with the flexibility to obtain a Visa debit card that can be funded with cryptocurrencies like Ethereum, Bitcoin, Litecoin, and Ripple. These digital assets can then be exchanged for traditional currencies such as Euros and Pounds. The card can subsequently be utilized for making purchases or conducting ATM withdrawals, offering a convenient bridge between the digital and fiat financial worlds.
The card is purchased through Cryptopay’s official website for £5 for standard delivery and £15 for express delivery. The maximum card limit is £45,000 or €50,000 and the minimum card limit is £ 1.01 or €1,01. South Africans are also charged a foreign transaction fee of 3%.
The card takes around 6 weeks to get to the country and can be received without any verification documents other than the owner’s address. Identity verification is only needed when making transactions.
Crypterium
Crypterium is an Estonian cryptocurrency company that services South Africa as well. The company offers both Visa and Mastercard crypto debit cards but only Mastercard is available in the country.
South Africans can load their Crypterium debit cards with up to 20 different cryptocurrencies including the popular Bitcoin, Litecoin, and Ethereum. Crypterium has a maximum limit of €2500 per transaction and only 5 transactions or less are allowed each day.
Usually, the company’s payouts are instant but depending on the system or your bank the transaction may take a few working days. The funds are credited to your bank when the status of the transaction changes to “Success”.
Kastelo
Last year, South African Fintech company Kastelo in partnership with Mastercard launched a crypto card for transacting in cryptocurrency within South Africa and abroad, becoming the first of its kind.
Kastelo’s crypto card works with Bitcoin, Ethereum, USD Coin, and its own token, the Kastelo Community Token. All one has to do is create an account on the platform, which uses both crypto and fiat currency.
The Kastelo card works anywhere Mastercard is accepted and has low transaction fees of $20 to $50 cents per transaction.
Finally
Since their introduction, crypto debit cards have come a long way. But before you embark on getting and using a crypto debit card, remember cryptocurrency’s volatility and market conditions can change the crypto’s value.
Disclaimer: Investing can be quite a wild ride – especially when you don’t know the terrain! To keep things from getting too rocky, take some time beforehand to get familiar with all of the risks involved. Our site is here to up your investor game by providing all available intel about platforms and trends, but we don’t take responsibility nor can we be held accountable as advisors. That being said, it’s still important for you to make educated decisions that match what works best for YOU – just remember: no amount of savvy will guarantee success or protect against loss so invest money you can spare.
