Mainstream users require a debit card in order to make Bitcoin and other cryptocurrencies a part of their daily lives. What is the result of this year and what is the future of the Bitcoin debit card market in 2016 & 2017? Cointelegraph interviewed Ted Rogers, the president of XAPO, one of the world leading companies issuing Bitcoin debit cards.

Cointelegraph: There are dozens of Bitcoin debit cards in the world. Are there any statistics about this market, that are gathered by any association? How can we know, who the leaders are in this market?

Ted Rogers: Unfortunately, no one association that I know of.  The number of bitcoin debit cards is still so small that not many industry groups are paying attention. Maybe as the ecosystem matures, someone will begin to track it.  The only ones I see with meaningful activity are Xapo, ANX and E-Coin.

CT: What can we expect in the market of BTC cards next year?

TR: Certainly you will see more bitcoin-related cards, both from independent startups and from existing wallet and exchange platforms.  More choice is good thing, although I’m not certain that companies seeking to provide debit cards understand the amount of work involved in launching and maintaining a card program.  Hopefully, they won’t find out the hard way.

I would also expect more players from traditional financials services to become more actively and visibly involved in card programs, although this might occur more in 2017 than 2016.

CT: What will be the main movements in its development?

TR: In terms of functionality, the same choices should remain: users can either order a preload card, in which case they must load their bitcoins onto the card before using it, or a true debit card, in which case there is no extra step required before spending (this is the kind of card Xapo provides).

Other than that, we all need to focus on improving user experience. For example, card ordering and activation, reduced transaction declines and more efficient KYC upgrades.

Ted Rogers, the president of XAPO

CT: What were the main events of the past year?

TR: Several more debit cards launched in the market and, as I said, more choice is a good thing – we are talking about a very big market, so there is room for multiple players.  More importantly, we saw growing adoption and usage of debit cards, especially in the second half of the year.  

Bitcoin as a currency will be a killer app in countries in which consumers cannot rely on the local currency but only if consumers can buy and spend bitcoin very easily.  Until a sufficient number of bitcoin-accepting merchants exist, a debit card is essential for the “spend” side of the equation.

CT: Who are the main players that will change the market?

TR: The card networks (Visa, Mastercard, Discover) and banks can change the market radically, if they seize the opportunity that bitcoin presents. Bitcoin companies can’t do it without these third parties.  2016 will see more of these entities enter the market but it will continue to be a slow process.

CT: Will the market be divided between different companies according to the geographical position of every company issuing cards, or will there be 1-2 leaders that conquer 80% of the world market? Can you tell us the statistics for today about card companies' presence all over the world? And can you make a prognosis for the next year? Will the picture of the market be changed greatly?

TR: Companies that already have large amounts of wallet users have a distribution advantage, obviously, and pure card startups will have some trouble overcoming that advantage.  That said, there really is room for independent card companies – startups – to have success.  We are talking about a huge, nascent global market.  

On the other hand, any company will require a minimum amount of infrastructure in order to successfully maintain a card program, which means pure card startups will need to raise a meaningful amount of capital in order to stay in business.  I suspect many investors will view a debit card as a good product but not an independent business.  We’ll see.

CT: Anything else that the clients of world card companies should know on the eve of NY 2016?

TR: There was a lot of hype around the importance of a debit card in early and mid 2014.  Then it died down (like a lot of bitcoin hype).  The initial inclination, however, was correct: debit cards serve a vital role in bitcoin adoption.  Until we have a critical mass of merchants that accept bitcoin – and I think we are years away from that – mainstream users require a debit card in order to make bitcoin a part of their daily lives.  Debit cards provide a bridge to a future in which bitcoin is ubiquitous and, ironically, debit cards are no longer necessary – but we are a decade away from that and until then debit cards are essential.  

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