Is the Crypto financial card just working for Visa? Analyzing the bottlenecks and challenges of crypto payments

In recent years, crypto cards (Crypto Cards) have been seen as a key bridge to bring cryptocurrencies into everyday payments. But does this path truly lead to a decentralized future? Hazeflow founder Pavel Paramonov raises questions in a lengthy article, directly pointing out that most crypto cards not only fail to disrupt the traditional payment system but also reinforce the power structures of banks and Visa. He believes that crypto payment cards are merely transitional products rather than the ultimate solution for crypto payments.

Can public blockchains replace Visa? Crypto financial cards actually make them harder to replace

Pavel’s core argument is very straightforward: “Crypto financial cards are just a temporary solution to bring cryptocurrencies to the masses and use them for payments.”

However, crypto card programs are difficult to replace traditional payment systems; instead, they add more value to Visa and Mastercard.

Pavel explains that public chains and Layer 2 solutions have long been obsessed with comparing TPS to Visa or Mastercard, trying to prove they can take over. But crypto financial cards are not disruptive tools; they instead highlight the framework of traditional payment systems:

Visa and Mastercard still hold the most critical powers: they can freeze cards at any time, block specific companies or partner banks, and unilaterally set compliance and risk control standards.

This conflicts with the permissionless and decentralized spirit pursued by cryptocurrencies and also reveals the ceiling for the development of crypto financial cards.

Using crypto financial cards ≠ De-banking: The essence remains traditional finance

At the same time, Pavel also debunks the myth: “Using crypto financial cards does not mean de-banking.” In fact, behind crypto financial cards are still bank accounts, users still need KYC, and they are subject to current financial regulations, which means there is no privacy with crypto cards.

In theory, governments can still access some information about user accounts, earnings, and transaction records. From a regulatory perspective, crypto financial cards are not much different from regular financial cards:

Most crypto card companies are simply replacing the narrative and branding of traditional financial products with encryption. When users swipe, they are actually spending fiat currency, not on-chain assets; they rely on banks and card providers, not wallets or public chains.

One more intermediary layer means more costs: the fee trap of crypto financial cards

In other words, the payment path involves more intermediaries: “Stablecoin → Crypto Financial Card → Bank → Fiat Currency → Merchant.”

Pavel emphasizes that these additional intermediaries not only create a worse user experience but also include hidden exchange spreads, conversion fees, and potential custodial costs.

He also mentions that his rare experience of paying with cryptocurrencies directly was on Trip.com, using stablecoins to pay for airline tickets: “Paying directly to merchants via wallet—that’s the true form of crypto payments.”

Trip.com’s stablecoin payment page Rain and CaaS: the real value of the crypto financial card industry

Pavel further points out that most crypto financial cards rely on the same infrastructure, represented by companies like Rain, which provide “Card-as-a-Service (CaaS)” responsible for issuing cards, bank interfacing, and compliance processes. Front-end branding is just label and marketing.

Rain’s operational model

He emphasizes that in this structure, the truly valuable entities are often not the card-issuing brands but the CaaS providers that supply the infrastructure.

(Stablecoin Payment Provider Rain Raises $58 Million, with Samsung Next and Dragonfly Participating)

Why are there still so many crypto financial cards on the market? The answer is “ecosystem locking”

Even though many projects face numerous issues, they continue to launch crypto financial cards. Pavel believes the reason is that payment habits are one of the most effective ways to lock users into an ecosystem.

Whether it’s MetaMask Card paired with Linea, or Plasma Card linked to their own L1, these designs aim to keep users within their ecosystem through daily spending, similar to Apple’s strategy of building the iOS system with the iPhone.

(From Infini Deactivating Financial Cards to Traditional Financial Stablecoins: What is the Final Solution for Crypto Payments?)

Among these, the only case Pavel is confident in is EtherFi, which improves capital efficiency by collateralizing cryptocurrencies and offering cash loans—more innovative compared to other cards.

Is there no value if it’s not the end point? Developers: Product iteration is built on accumulated innovation

Gnosis Pay developer Ari Eiberman offers a somewhat cautious rejection of Pavel’s view, believing that crypto financial cards may not be the final form of crypto payments, but that doesn’t mean they have no future:

Infrastructure iteration is not an overnight process. Before merchants fully support on-chain payments, crypto financial cards are a practical and necessary transitional solution.

He also points out that the commodification of infrastructure (CaaS) is not a weakness of the industry but a push for competition to move upward, with true differentiation and innovation reflected in custodial models, revenue and efficiency, exchange rate transparency, and user experience: “Of course, most crypto financial cards lacking substantial innovation will be phased out in a bear market.”

In summary, even though crypto financial cards currently do not truly solve core issues like payment friction, privacy, and global accessibility, they will undoubtedly remain a key part of future iterations of the financial payment system.

This article Crypto financial cards just work for Visa? Analyzing the bottlenecks and dilemmas of crypto payments first appeared on Chain News ABMedia.