Since 2009, when Satoshi Nakamoto launched Bitcoin, its demand has grown steadily and the price has remained unbeaten in all markets around the world. In December 2017, Bitcoin price broke all previous records and skyrocketed to the record mark of $18,737.60.
With Bitcoin being the most popular coin in many stores and even some state/government departments, many people prefer it for paying for their services or for holding/trading on the markets. However, first things first; you need to own Bitcoin.
Though there are many methods that can be used to get Bitcoin, such as mining and selling products to get paid with BTC, a lot of people are interested in knowing how to buy Bitcoin with a prepaid card.
This post is a review of the main platforms which allow users to buy Bitcoins using prepaid cards. It also explores the reliability and fees of using such platforms.
What Exactly Is A Prepaid Card?
A prepaid card is completely different from the standard debit card, even though some still bear similar logos such as Discover or Visa. A typical bank debit card is linked to a person’s checking account, while a prepaid card is not.
As the name “prepaid” suggests, the cards ONLY allow holders to use the funds they have already loaded onto the card. Therefore, they do not allow users to overspend, which can happen with credit cards.
If you want to use the prepaid card to buy Bitcoins, this implies that you will first have to start by uploading the funds to use. Here are the main platforms that allow people to buy Bitcoins with Prepaid cards.
CEX.IO is a platform started in 2013 to offer Bitcoin exchange and cloud mining platform services. However, the cloud mining service was dropped in 2015, and the exchange now only functions as a cryptocurrency exchange.
The exchange is based in London, UK, but it is also available in many other jurisdictions including the US, South America, and Asia. One of the main advantages of CEX.IO is that it allows users to buy Bitcoin with a prepaid card, Master Card, or VISA.
To buy Bitcoin with a prepaid card at CEX.IO, the transaction fee is 3.5%. To use the platform, you will also need to register for a trading account, and have an appropriate Bitcoin wallet, such as Ledger Nano S or Trezor.
The following are the main pros and cons of using CEX.IO
- Very reliable support.
- Supports fiat currency.
- Allows margin trading.
- Available for both desktop and mobile trading0
- The transaction fee is very high.
If you have been wondering about where to buy Bitcoins with a prepaid visa, one of the top options is LocalBitcoins.com. LocalBitcoin.com is a peer2peer startup platform that facilitates OVC (over the counter) buying and selling of Bitcoins for a small fee.
The platform was started in 2012 to facilitate the easy exchange of Bitcoins. It is based out of Finland and boasts of a wide network of Bitcoin traders, buyers, and sellers across the globe.
Today, it has become a major point for buying Bitcoin with prepaid cards. Here is a caption from LocalBitcoins.com showing how to buy Bitcoin with a prepaid card.
The transaction charges for buying Bitcoin using prepaid cards on the platform is 1%. Though still high compared to the standard crypto-crypto trading fees on many exchanges such as Binance, it is significantly lower than CEX.IO and Coinbase, which charge 3.5% and 3.9% respectively. The table below summarizes the pros and cons of using LocalBitcoins.com.
- As a peer 2 peer platform, traders are allowed to purchase Bitcoins privately.
- Supports fiat deposits and withdrawals.
- Available in more than 250 countries around the globe.
- Supports many cryptocurrencies.
- The exchange is not ideal for people who want to buy large sums of Bitcoins
- New users find the platform relatively complex before learning to use it
- There are several reports of scams on the platform
Bitpanda, which initially started as Coinimal in 2014, is a Bitcoin broker based out of Austria. In 2016, Bitpanda was voted the best Fintech Startup, which is one of the reasons that it was able to expand throughout Europe rapidly.
To buy Bitcoin with a prepaid card, the first step is opening a user account at Bitpanda. The process is quick and will only take a few minutes.
First, you have to create a trading account using a personal email and then verify it depending on your preferred level; Bronze, Silver, or Gold. At the Bronze level, only a phone number is required for verification.
However, additional info, such as phone number, proof of address, and date of birth will be required to verify the Silver and Gold levels. Though the additional verification is crucial for enhancing user’s security, it also raises concerns for people who want to buy Bitcoins anonymously.
Once the account is verified, you only need to select the number of Bitcoins to buy and then pay with your prepaid card. An additional transaction fee between 3% and 4% will be included in the transaction.
The following table is a summary of the main pros and cons of using Bitpanda.
- The platform is automated for instant transactions.
- It offers a wide variety of payment options.
- Their customer support is reliable.
- It has a very intuitive user interface.
- Fast and reliable.
- The protocols used at the platform are not hierarchical deterministic. This raises concerns for privacy and security.
- The platform is not open-source.
The Final Take
Can you buy Bitcoins with a prepaid visa? Today, the industry has evolved, and crypto users can promptly and conveniently use Visa and other cards to buy Bitcoin. Using the aforementioned three platforms; CEX.IO, LocalBitcoins.com or Bitpanda, people can now buy Bitcoins with almost any type of card.
However, it is important to understand that these platforms are centralized and security cannot be 100% guaranteed. Therefore, you should always review each platform in detail, especially if you plan on buying a lot of Bitcoins.
It is also crucial to always move the Bitcoins you have bought into a cold wallet such as Ledger Nano S or a paper wallet to reduce the danger of theft.