Cryptocurrency Remittance App Enables Instant Bitcoin Purchase With Credit Cards
Abra, the widely utilized cryptocurrency-based remittance platform, has integrated a functionality that enables its users to purchase bitcoin instantly with both credit and debit cards.
Abra’s Cryptocurrency Push
On Abra, similar to traditional remittance networks like Western Union and Moneygram, it is possible for users to send cryptocurrencies such as bitcoin and ether to individuals across the world via Abra tellers.
Local Abra tellers receive whichever cryptocurrency that is sent from the sender and provide the receiver with either cash or other types of payments.
This week, Abra has enabled credit and debit card purchases of bitcoin on its platform, to facilitate growing demand from users who previously had relied on bank and wire transfers, which are normally subject to delays due to the inefficiency of the global banking system. While most domestic wire transfers can be completed in 24 hours, international wire transfers can take up to five days.
The Abra team said in an official statement:
“Up until now, Abra users have been able to fund their wallets using a lot of different methods, including bank and wire transfers, or by transferring bitcoin or litecoin purchased elsewhere. Additionally, users based in the US have been able to make bitcoin credit card purchases using American Express.”
Didn’t Banks Ban Usage of Credit Cards on Crypto Exchanges?
In February 2018, major banks such as Bank of America and Citigroup banned the usage of credit cards in purchasing and selling cryptocurrencies to prevent the possibility of credit cards being used by criminals to launder money and impose tighter cryptocurrency investment policies.
Credit card network operators like Discover have also expressed their reluctance in processing cryptocurrency purchases, because of strict Anti-Money Laundering (AML) policies in place that place the burden of user monitoring and transaction analysis to financial institutions.
At the time, Discover CEO David Nelms said:
“It’s crooks that are trying to get money out of China or wherever. Or if someone steals our credit card numbers they’re going to ask for payments in Bitcoin. Those are the only use cases I’m actually seeing today.”
Abra has been able to integrate a system to accept credit card payments on its platform through a company called Simplex, which assists crypto platforms in integrating credit card systems with complete fraud protection.
Licensed by the EU as a regulated financial institution, Simplex has served many of the largest cryptocurrency platforms in the crypto sector, including major bitcoin vault Xapo, cryptocurrency wallet Coinomi, and mobile wallet Mycelium.
Carlos Maslaton, head of Xapo Treasury, noted that the system of Simplex was key in allowing the platform of Xapo to enable bitcoin purchases with credit cards.
Up to $20,000 Payments
The financial fraud prevention and user monitoring system provided by the EU-regulated fintech firm has allowed Abra to process single bitcoin purchases in the range of $50 to $20,000, with credit cards, with the same process of purchasing products on platforms like Amazon with credit and debit cards