Cost and convenience Xapo vs Anx debit cards

[qwerty555]

Firstly it must be noted that

1 ANX card converts bitcoin to $'s when loaded , you have a balance in dollars and you spend in dollars. Once loaded there is no bitcoin /$ exchange rate risk, your dollar value has been fixed. Conversely there is no potential for an exchange rate gain should you hold the view that the only way for bitcoin value is upward in the medium term and if spending in currency other than $ an additional conversion charge will be made.

2 Xapo loads with bitcoin and there is a bitcoin balance shown. When you spend bitcoin is converted to the local currency at the current exchange rate at a 3% cost ( not just dollar so there is a potential exchange rate saving if spending in non dollar countries..will need to study that more)

This method can work for or against you depending on the exchange rate of bitcoin on that day.

So  cost to load and use ANX


The fees are a bit higher depending on how you use it

http://www.cryptocoinsnews.com/news/ken-lo-ceo-anx-hong-kong-bitcoin-exchange-talks-bitcoin-debit-cards/2014/07/16

What fees will be associated with the ANX debit card?

    As our fees may change from time to time, it’s best to check our fee schedule on our website to ensure the most accurate fee pricing.

After visiting the ANX website, the current fees for the ANX Debit Card are as follows:

ATM Withdrawal – $2.75

ATM Withdrawal Decline – $1.25

POS Purchase – $1.50

POS Purchase Decline – $0.20

Monthly Fee – None

Card Load Fee – $5 USD + 2.5%

Card Unload Fee – $10 USD

Verses

cost to use Xapo


http://www.coindesk.com/xapo-faces-online-backlash-debit-card-fees/



When it announced the card, Xapo promised a $15 one-time shipping and handling fee, but the company did not reveal any information on other associated costs.

The fee schedule, however, revealed the following card charges:

    A monthly service fee of $4.95, or £3.95/€3.95 for European customers
    An international ATM transaction surcharge
    Declined transactions costs of $1, or £1/€1
    Domestic ATM transaction costs of $3.50 per transaction, or £2.50/€2.50 in Europe.


http://media.coindesk.com/2014/08/xapo-debit-card-fee-schedule.png

since that issue arose they have compensated US customers

As a token of appreciation to US customers, Xapo said that US-based card users would not be charged the $15 fee in connection with the card, and that $25 in BTC would be gifted to their accounts.

http://www.coindesk.com/reviewed-xapos-bitcoin-debit-card/

Convenience

Xapo looks far more convenient as it is directly connected to wallet and does not require reloading from time to time but the exchange rate risk comes with that.

How much will it cost to buy $200 of grocery at the local supermarket.

Anx



- card load fee $5 + 2.5% ($5) total $10
-POs purchase 1.5%  =  $3

total $13 or 6.5%
This assumes that there was not a further 1% ish spread on the original card loading from bitcoin to $

Xapo

http://media.coindesk.com/2014/08/xapo-debit-card-fee-schedule.png

- 3% foreign currency conversion ( that is any currency)     $6
- $5 monthly service fee
- POs which I assume is associated transaction  0

total $11 or 5.5%

Xapo has a slight cost edge ( assuming regular monthly usage.) and arguably wins on ease to load . Anx has no bitcoin to $ exchange rate risk once loaded nor any potential gain

Xapo also wins if the card is used in a non $ denominated country as there is still just a 3% charge but Anx will have a further charge for the currency conversion $ to dhiram if used in Dubai or whichever.
If anyone has actually used either of these your experience would be helpful to get a clearer picture.

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[jjc326]

Thanks for the write up. I do see these cards as the future of bitcoin, where people can use them like a credit or debit card. The thing is that these particular cards have too much fees and cost associated with them. I'm sure someone will come along and lower the fees soon enough so that it will make sense. I mean a monthly fee to have the card?  IMHO what a joke.

[kerimk2]

Fees are still too high. I got a cavirtex card for absolutely free, but the fees are pretty bad. 2 dollars for every purchase or atm withdrawal and 50 cents for a decline. We need a visa card, with only a percentage fee, no flat rate fees. That would be the best.

[qwerty555]

Fees are still too high. I got a cavirtex card for absolutely free, but the fees are pretty bad. 2 dollars for every purchase or atm withdrawal and 50 cents for a decline. We need a visa card, with only a percentage fee, no flat rate fees. That would be the best.

It must not be forgotten that the issuer (Xapo and Anx in this case) of the card gets a percentage of any purchase transaction as well..the interchange fee. This will probably be divided between the issuer and the backer ( visa/mastercard) and is currently in the range of 1-6 %. The user does not knowingly bear this cost as it is deducted from what they pay the merchant. To think that the merchant is not going to pass all or part of this on to the buyer in his price is ..hahahaha laughable

This ranges from 1-6% and therefore once volumes are established ( 1-2 yrs down the road at current adoption rates) there is a stong possibility that there will be a zero % fee to use such a card but meanwhile they need to cover their costs.

http://en.wikipedia.org/wiki/Interchange_fee

Interchange fee is a term used in the payment card industry to describe a fee paid between banks for the acceptance of card based transactions. Usually it is a fee that a merchant's bank (the "acquiring bank") pays a customer's bank (the "issuing bank") however there are instances where the interchange fee is paid from the issuer to acquirer, often called reverse interchange.

In a credit card or debit card transaction, the card-issuing bank in a payment transaction deducts the interchange fee from the amount it pays the acquiring bank that handles a credit or debit card transaction for a merchant. The acquiring bank then pays the merchant the amount of the transaction minus both the interchange fee and an additional, usually smaller, fee for the acquiring bank or ISO, which is often referred to as a discount rate, an add-on rate, or passthru. For cash withdrawal transactions at ATMs, however, the fees are paid by the card-issuing bank to the acquiring bank (for the maintenance of the machine).

These fees are set by the credit card networks,[1] and are the largest component of the various fees that most merchants pay for the privilege of accepting credit cards, representing 70% to 90% of these fees by some estimates, although larger merchants typically pay less as a percentage. Interchange fees have a complex pricing structure, which is based on the card brand, regions or jurisdictions, the type of credit or debit card, the type and size of the accepting merchant, and the type of transaction (e.g. online, in-store, phone order, whether the card is present for the transaction, etc.). Further complicating the rate schedules, interchange fees are typically a flat fee plus a percentage of the total purchase price (including taxes). In the United States, the fee averages approximately 2% of transaction value.[2]

http://en.wikipedia.org/wiki/Credit_card#Interchange_fee

Interchange fee
Main article: Interchange fee

In addition to fees paid by the card holder, merchants must also pay interchange fees to the card-issuing bank and the card association.[51][52] For a typical credit card issuer, interchange fee revenues may represent about a quarter of total revenues.[53]

These fees are typically from 1 to 6 percent of each sale, but will vary not only from merchant to merchant (large merchants can negotiate lower rates[53]), but also from card to card, with business cards and rewards cards generally costing the merchants more to process. The interchange fee that applies to a particular transaction is also affected by many other variables including: the type of merchant, the merchant's total card sales volume, the merchant's average transaction amount, whether the cards were physically present, how the information required for the transaction was received, the specific type of card, when the transaction was settled, and the authorized and settled transaction amounts. In some cases, merchants add a surcharge to the credit cards to cover the interchange fee, encouraging their customers to instead use cash, debit cards, or even cheques.



http://www.cardhub.com/edu/currency-exchange-study/

http://www.cardhub.com/edu/studies/

http://www.moneysavingexpert.com/travel/overseas-card-charges

http://www.which.co.uk/money/bank-accounts/reviews-ns/bank-accounts/charges-to-use-your-debit-card-abroad/

NOTE this does not include currency conversion spread where they can get u for up to another 5% in worst cases

http://www.thestar.com/business/personal_finance/spending_saving/2012/01/29/beware_foreign_currency_fees_when_travelling.html

re sending money

http://www.theguardian.com/hifx-money-transfers/sending-money-abroad-time-to-ditch-your-bank

[Bogleg]

Cost is way higher than a traditional credit card.

[keithers]

Fees are still too high. I got a cavirtex card for absolutely free, but the fees are pretty bad. 2 dollars for every purchase or atm withdrawal and 50 cents for a decline. We need a visa card, with only a percentage fee, no flat rate fees. That would be the best.

Yes, at this stage in the game it is usually better to just use the debit card from your bank that you already have, because the merchant usually picks up the fees (unless it is an Arco or something and they charge you).   When gas stations charge you, the fee is usually only $0.35 or whatever, which is basically nothing.

[qwerty555]

If cost is the only criteria..yes a traditional card is still better for now.

There are other reasons besides cost to use a bitcoin card and here are a few.

ideology ..money is no object..want the experience..want a talking point..want to promote bitcoin..want to kick back at fiat controllers ( doesnt really yet as there will be 2 fiat to bitcoin exchanges  buying coin and selling coin but it may feel good)  oh yes feel good factor LOL

add.  

Want to speculate that the bitcoins in wallet will increase in value v's fiat in the bank eg bitcoin goes to $1,000 again giving twice the value (in fiat)

Exchange rate fees  is a big factor when using traditional cards. This is where Xapo may have a competitive edge on costs.

Beware foreign currency fees when traveling


http://www.thestar.com/business/personal_finance/spending_saving/2012/01/29/beware_foreign_currency_fees_when_travelling.html

For example, with my MBNA Platinum Plus MasterCard, all transactions made in a foreign currency will be converted to Canadian dollars. Then, an amount equal to 2.5 per cent of the converted transaction amount will be added to the total.

Meanwhile, my President’s Choice (PC) Financial MasterCard first converts all foreign transactions into U.S. dollars, and then into Canadian dollars, before charging a 2.5 per cent conversion fee.

The foreign currency conversion fee is charged to offset the cost incurred by the credit card company and the bank since international transactions are more expensive to process than domestic transactions.

PC Financial charges $3 per withdrawal from bank machines outside of Canada. In addition, they also charge a fixed rate of 2.5 per cent of the converted amount.

[qwerty555]

Update

It appears that Xapo has waived the monthly fee as of Aug 4th..unless it changes again

http://blog.xapo.com/post/93814554629/xapo-debit-card-fees-and-shipping-update

We do not, however, intend to charge monthly fees or fees for everyday spending. If our users are charged a monthly service fee, Xapo will reimburse that amount in bitcoins. So, if you use the Xapo Debit Card and are charged a monthly service fee by our third party provider, we will directly reimburse your Xapo Wallet.

It now has a 3% cost ( including exchange rate spread)

[kerimk2]

When will I get my xapo debit card, I ordered it months ago, and I have lots in my account, waiting for the debit card.

[qwerty555]

Another advantage to Xapo ( which should be obvious) If you buy bitcoin to load your wallet at $500 a coin approx and you spend only  when bitcoin hits $600 a coin you are effectively getting a 20% - 3% cost of use = 17% discount on everything you buy with it  hahahaha!

and for the many people with no Bank account ..76% of the people in the Philippines..you can get a card which allows you to buy online ( cheaper)...There is an airline that is #1 domestic carrier and you can only pay online with a card or at one of very FEW outlets restricted hours ( 7pm cut off mostly) for their promo fares which are every month..difference in price...promo vs regular  66% and larger discount .

[qwerty555]

additionally although Xapo charges a 3% fee ..when using it abroad it is very competitive  if not much cheaper than 90% of other cards



http://chinaimport.hubpages.com/hub/Money-saving-tips-exchanging-foreign-currency-travelling-abroad

Source: Dailymail.co.uk
4. Bank Debit Cards

Bank issued debit cards are similar to stored value or prepaid travel cards, but they are linked to your bank account. It is generally not advisable to use debit cards because:

    High transaction fee for use
    High ATM withdrawal fee
    In case of fraud you may lose all money in your account

The fees are dictated by the bank who has issued you the debit cards.

If you have to use a debit card to avoid overspending it is always better to buy a stored value / prepaid travel cards offered by banks and online dealers. Keep your bank issued debit cards for backup only.
5. International Credit Cards

Credit cards are safe, easy to carry and offer protection in case of any dispute arising with the seller of the goods and services abroad. They can be easily be replaced if lost and offer exchange rates near to inter bank rate.

Travel is a major expense and most bank offers to spread out payment over a period of a few months so that you get better control over your finances. It also allows you to earn cash back, lounge access at airports and loyalty points. However, it can be as expensive as a debit card, even more if you have an unpaid balance on your card.

Many banks will charge you for use of credit cards in any of the following ways:

Foreign Exchange Fee: Your bank can charge of 3% to 5% simply because you have used it abroad.

Cash Withdrawal Fee: Bank would charge heavily for ATM withdrawal abroad, which could be 7% of the withdrawal amount. In addition, foreign bank who owns the ATM may charge a flat fee for the same. It is best to avoid using a credit card for cash withdrawal abroad.

Interest Charges: If your balance is not paid on time, all unpaid balance may attract a hefty interest rate ranging between 18% to 30% that evaporates all savings that you earned by cash back or loyalty points.


When to use credit cards abroad?

    For Flight booking
    For Hotel booking
    For fine dining if there is an offer
    For high value purchases (watches, electronics)

Using a credit card abroad? Consider this.

    Many US credit cards lack extended security feature of PIN + CHIP that are popular in Europe and Asia which makes them unusable while traveling abroad.
    Some merchants offer to convert charges in your local currency. Avoid it. While it locks transaction value in your local currency, it also allows merchants to charge a conversion fee that can be as high as 5%.
    Hotels or car rental agency may put a hold on money equivalent to your expected bill. They may forget to remove this hold even after the bill is paid. So ensure that the hold is removed.
    Your credit card company may block your card if used abroad without notifying them. Let them know before you travel if you plan to use their credit card.
   

http://www.cardhub.com/credit-cards/foreign-transaction-fee/

http://www.cardhub.com/edu/currency-exchange-study/

According to CardHub’s Currency Exchange Study, a credit card provides the cheapest form of currency conversion. As long as you’re using a credit card with no foreign exchange fees that is on the Visa or MasterCard network, you’ll save up to 7.9% and 14.7% on currency conversion relative to cash services offered at local banks and airports, respectively. Besides being cheapest, credit cards also provide the simplest means of currency conversion, given that it’s done automatically upon a purchase being made.

Please keep in mind that 90.2% of all credit cards have an average foreign transaction fee of 2.45%, according to CardHub's

data.

Plus the exchange rate spread which in worst cases can be as high as 5%