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An Obituary For Coinbase’s Shift Payments Card

The U.S.-based Shift Card, a Visa debit-card service that allowed people to spend cryptocurrencies held on Coinbase, stopped operating this month. In many ways, the Shift Payments card stood above its peers. There was nary an alternative for U.S. residents, while European customers, and those in other non-U.S. countries, have been able to choose between Wirex, Uquid, Cryptopay, and Spectrocoin. Not so in the U.S. 

The fintech company said in its email it would shut down temporarily on April 11, 2019. The Shift Card originally launched in Q4 2015, and indeed plans to relaunch again.

“We hope you enjoyed using the Shift Card and truly thank you for your loyalty,” reads the email from Shift Financial. “We, unfortunately, will be retiring the program in April of this year — All Shift Cards will officially be deactivated on April 11, 2019.”

Bitpay still has a debit card, but the Atlanta-based merchant only allows people to sell Bitcoin for U.S. Dollars, while the Shift card deducted funds directly from the Coinbase user account based on the bitcoin spot price. In other words.

Shift Payments banked with Metropolitan Commercial Bank for the card and issued it on behalf of San Francisco-based crypto exchange Coinbase.

Shift Payments first enabled Coinbase users in 24 US states to spend bitcoins online and offline at over 38 million merchants worldwide.

I spoke with Charlie Lee, Director of Engineering at Coinbase and creator of Litecoin, regarding his thoughts on the Coinbase debit card back in January 2015.

“On one hand I think it’s a game-changer; on the other hand, it’s not really,” Lee told me. “People argue that spending money with the Coinbase debit card is not really using Bitcoin because bitcoins are not sent on the Bitcoin network. So it goes against the intention of Bitcoin.” Mr. Lee also lamented at the time that Shift Payments Coinbase card cost users more than sending raw bitcoin.

“Since the fees to the merchant are the same and there is an additional fee for the user, using the Coinbase debit card actually costs the user more than a regular credit card, where they can get some percent back,” Lee said, before Coinbase had incorporated Litecoin, making the cryptocurrency he created available for payments using the Shift card. “I have to agree that in that sense, it’s not really much better than what we have currently.” Lee detailed further the nature of Bitcoin.

“Those are the store of value and the payment network,” Lee said. “The Coinbase debit card does not take advantage of the Bitcoin payment network, but it’s the killer app for Bitcoin as a store of value. Now, people can hold all their wealth in Bitcoin and still easily spend it wherever Visa is accepted. That’s definitely a game-changer.”

He adds: “Now that people can spend their bitcoins even at places that don’t accept them, they will more likely hold bitcoin. And merchants will more likely start to accept bitcoin when a lot of people have bitcoin to spend.”

There were no fees on domestic transactions. While the original version of the card did not have a chip, the company ultimately issued cards with chips.

When the Shift Payments card became available, Coinbase had just raised $75 million in 2015 in a financing round.

The Shift Payments card connected to your Coinbase Bitcoin account upon signup. The company asked applicants for a bit of KYC before issuing the card. (Since Coinbase accounts connect to checking accounts with financial institutions, users could buy and sell bitcoins instantly, and even use them to pay for things at merchants and online. When you used your card, Shift Payments automatically debited your Coinbase account.

You had a choice of which color card between purple, green. My old Shift Payments Card came within ten days. I activate it online. I used the Bitcoin to pay for groceries, gas, movies, concerts and more. I even got robbed once Tijuana and my Shift Payments card was stolen. But, I was able to alert the company quickly, and they issued a new card. No funds were lost.  

Coinbase’s Shift Payments card was accepted wherever Mastercard is accepted. The card did have a 3% international fee. In the US, there was a $2.50 fee for ATM transactions. The daily spending limit was $1,000.

The user received a receipt instantly detailing where the card was used and how much was spent.

When you swiped the card, you pay based on the price of Bitcoin on Coinbase at the time of the purchase.

Users enjoyed the consumer protections of every other credit/debit card. Chargebacks are possible with the Shift Card, which is something you couldn’t do if you sent raw bitcoin to somebody. Brian Armstrong, Coinbase’s CEO, said of the card:

If you get paid in bitcoin (I do) or you’ve bought a bunch of bitcoin over time that has gone up in value, it is a way for you to spend it anywhere you want. Or get cash out of ATMs (sell it). That is a relatively small group of people today, but meaningful for them. I’ve been using my shift debit card over the past 3 months beta testing it, in the U.S. and various countries while traveling, and it is my primary card now. I used to just buy and hold bitcoin. Now I spend it every day. It doesn’t save you money (in fact could be worse than a rewards card), but if you’re already bought in to bitcoin in a big way, then this makes it usable in everyday life.

Coinbase, by creating and issuing this card, established itself as one of the companies responsible for making bitcoin mainstream.

Now that Shift Payments is a thing of the past, the domain is already redirecting to a new website: Apto Payments.

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