Xapo Card Review

Please note that this review is based on the honest feedback of someone who has an active interest and holding of Bitcoin, but who is not by any stretch of the imagination an expert. If you are an expert and see some sort of grievous error in what I’ve written, please do leave a comment with your correction! 

This isn’t a review of an Internet marketing product or tool, but it is a review of something that might be of interest to a lot of my readers.

You’ve probably heard of Bitcoin, right? You might even have your own little stash hidden away in a wallet somewhere (hopefully you weren’t trading on Bitfenix recently … unless you like haircuts).

Anyway, I have an interest in Bitcoin as I’ve been putting some money away into it regularly through a platform called Mybitcoinsaver – which I will be reviewing in the near future as well.

I think the idea of Bitcoin/cryptocurrency has some real merit, and should be of interest to anyone who is keen on “futurology”. Whether Bitcoin becomes the cryptocurrency that finds truly mainstream adoption remains to be seen. But for now, it’s probably the best we’ve got.

My Beef With Bitcoin

Despite the fact that I think Bitcoin is a fairly sound concept, I do have a particular issue with it – the fact that it just isn’t as easy as it should be to spend Bitcoin. Sure, there are sites that accept direct payment in Bitcoin (and I’ve enjoyed using this in the past) and there are even physical locations that take it, especially in the United States and Europe.

But until it’s as easy to spend your BTC as it is to spend money on a credit card or EFTPOS/bank card, I think that a huge swathe of the population will be put off using it. After all, what use is money if you have to have a degree in computer science to understand how to make payments? That’s a big exaggeration of course, but my point remains.

What if there was an easier solution? Something like a debit card that is loaded with Bitcoin, and which allows you to transact at the point of sale in-store or online like you would with any normal card?

Introducing the Xapo Bitcoin Card

The idea of this card is simple. You get a card that looks and functions like a standard bank/VISA debit card. You can shop online with it, or in-store, or withdraw from an ATM. The only difference is that the Xapo card is directly linked to a Bitcoin wallet, instead of a regular bank account.

Ordering Your Xapo Card

Getting a Xapo card sorted is pretty darn simple once you’ve got a Bitcoin wallet setup with Xapo (you will need one of these to have access to the card. I found setting up a Xapo account & wallet to be a very painless exercise, and the phone app is really easy to use. I won’t cover this in any more detail because of how simple it is).

From within your wallet there is an option to order a card. Provided you live in one of the accepted countries, which seems to be just about every Western country, then you’ll be eligible for a card.

Here’s some other things you need to know when ordering:

• You pick whether you want your card to be denominated in US Dollars, British Pounds, or Euro. You can’t change once this is done. It’s important to pick the right currency for your needs as you will be transacting in whatever currency you picked. So if you picked a US dollar card put you live in France, then you’ll pay extortionate exchange fees every time you shop (more about this later in the review).
• You’ll need to pay for your card with the balance of your Xapo wallet. So make sure you transfer some BTC into your wallet before trying to order.
• It costs $20 USD to get your card issued. Your first year’s card fee is included.
• There are two shipping options; a free option with no tracking that can take 2-8 weeks to arrive, and expedited DHL delivery with tracking for $55 USD. I opted for DHL shipping and received my card 6 days after ordering, and got to enjoy accurate tracking. I strongly recommend coughing up the $55 for the peace of mind DHL shipping provides.
• The card you’ll receive is provided by My Choice Corporate

What Is The Card Like?

Here’s a picture of the Xapo Card (not my one, for security purposes):

So it does look a bit different to the illustration provided on the Xapo site:

Most notably – at least on my card – it doesn’t say Xapo in the top left corner, but actually just says “debit card”.

Certainly, this card wouldn’t look out of place in any wallet. It’s not covered in gaudy Bitcoin signs that draw attention to your proclivity for “exotic” currencies (depending on where you live in the world, this could be a very good thing indeed).

It feels like a nice quality card, and hopefully want fall to pieces or look worn out after a few uses.

What I Like About The Xapo Card

• Smooth payment process. Once I had my card set up with a PIN and BTC in my Xapo wallet, it was a really smooth process to do my first transaction (an ATM withdrawal which I talk about in a later section of this review). There was no real difference versus using my normal bank or credit card.
• Use it anywhere that accepts VISA. 
• Smart-looking card.
• No pre-crediting. My technical knowledge of how bank and Bitcoin cards work is a bit limited here. But basically there seem to be two types of Bitcoin cards. The first type requires you to purchase X amount of $USD with X amount of BTC, and then that $USD is loaded on to your card. Effectively, it is a “prepaid” card system. Xapo is a second type; the BTC in your linked wallet is spent (and somehow exchanged into fiat currency) at the point of sale. So the card is linked to the wallet, and not its own distinct store of value.

What I Dislike

• High fees, especially if you don’t like in USA, UK, or Europe or want to make ATM withdrawals. The most common criticism I can find online of the Xapo Bitcoin card is that its fees are quite high. This is especially so if you live in a country where your currency isn’t USD, GBP, or EURO. For example, you pay a 3% foreign exchange fee on the cost of your purchase (so a purchase of $100 USD made in NZ has a fee of $3 USD). There is then a flat ATM withdrawal fee of $3.50 USD as well, if you’re withdrawing from an ATM. I think that there is also a foreign exchange fee of 1.9% added by VISA as well. Maybe a clued-up reader can comment on this. If you’re transacting in USD, GBP or EUR, then the fees aren’t anywhere near as bad.
  • These fees could definitely stack up, so it probably pays to use the card for bigger purchases or withdrawals. This is especially true if you’re using it overseas or making ATM withdrawals,
  • My first transaction was a test withdrawal from an ATM in New Zealand. I requested $60 NZD in cash from the ATM. At the prevailing exchange rate of the time, that equals $43.18. Looking at my Xapo wallet, I was charged a total of $48.40 USD to receive that NZD from the ATM. Therefore, it cost me $67.25 NZD to get $60 NZD. Not ideal … but not prohibitive if I’m only using the card on occasion. If my maths is correct, I effectively paid a 12% fee to use the card to withdraw New Zealand dollars from an ATM in a card denominated in US Dollars. That does hurt quite a bit, but it’s something I don’t have much choice in avoiding.
  • Xapo are probably adding other hidden exchange fees and making money of arbitrage along the way. Unfortunately, this is just something you’ll have to accept if you want to use the card.
  • On this basis, I would suggest having a 15% “buffer” whenever making a purchase to allow for fees. E.g. if you want to buy a $100 item, then make sure at least $115 is in your wallet. Unfortunately, this is the apparent price of being cutting-edge!
• Could do with better initial use instructions. When the card arrived I didn’t know if it was cheque, savings, or credit when transacting at POS. For future reference, your card will be CHEQUE.
• Big limitations on non-verified cards. Another annoying part of having a Xapo card is the limitations placed on it until you verify your card by uploading a scanned copy of a valid government ID and proof of address. The limitations are especially severe on ATM withdrawals for non-verified cards. I’m guessing that this is to help counter the potential of using the card for money laundering (you can order a card to any address and any name, but you don’t be able to verify it unless you’ve put in legit information). However, it is also frustrating from the perspective of Bitcoin and its inherent anonymity. I can see this limitation putting off a lot of people who are more dedicated to preserving the anonymity of Bitcoin. It’s also concering to know that a company with unknown data security measures would have access to your ID. Below you can see a table showing the purchasing and withdrawal limits on non-verified and verified cards:

Conclusion

As I stated at the start of this review, I’m not writing from the point-of-view of a cryptocurrency expert. I’m the first to admit that my understanding of the technical aspects of Bitcoin leaves a lot to be desired. However, due to having a small holding and wanting to spend some of it (and not wanting to be limited in how I do spend it) I was immediately interested in the concept of the Xapo card.

Although I haven’t been using it for long, I think that for someone who does want a relatively simple means for spending their coin, it could be a good option. I know that the Xapo card gets a lot of hate for its high fees (and yes, the fees are really bad, especially if you live in a country with a non-listed currency which means paying a foreign exchange fee as well) but as a “proof-of-concept” for what is to come, I think it has a lot of potential.

I don’t think that I could go around using this card every day in place of my trusty EFTPOS card or Amex. Firstly, having to worry about the constant fluctuation in the value of Bitcoin is a pain in the ass … imagine going shopping knowing you’ve got $500 worth of BTC in your Xapo wallet, only to get to the checkout and find out that it’s worth $400 because another exchange hack has occurred and driven the price of Bitcoin down. Secondly, the high fees are a real killer.

Nonetheless, I honestly do think that the Xapo Bitcoin card is a good idea, and it’s worth having one as another means of spending your coins. If you’re someone like me who doesn’t believe that Bitcoin is going to go to the moon anytime soon and you want to actually indulge in a spot of “profit-taking”, then you’ll probably enjoy having a Xapo card.

Go here to find out more about Xapo and the wallet & card options available.