Tiger Research: Crypto payment cards with $1.5 billion in monthly transactions, stuck in the 1990s

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This article from Tiger Research suggests that the current state of crypto payment cards is similar to debit cards in the 1990s, just before their commercialization: both leverage existing payment networks to bypass merchant acceptance hurdles. However, the daily financial relationships built around primary bank accounts—such as payroll deposits and recurring debits—have not yet been established.

The annualized transaction volume of crypto payment cards is approximately $18 billion, with RedotPay accounting for over half of the market share, and users concentrated in emerging markets. At present, crypto payment cards are merely supplementary tools in regions with limited access to US dollars, far from being a universal financial infrastructure.

Relying solely on the growth of payment transaction volume cannot establish the infrastructural status of crypto payment cards. The market landscape will ultimately be determined by three types of players: platforms that control the flow of funds, service providers covering areas not served by traditional finance, and enterprises that build core daily account relationships on top of underlying payment rails.

The Parallel World of Debit Cards in 1990

In September 1958, Bank of America mass-mailed credit cards to 65k residents of Fresno, California. This was the first payment card without supporting underlying infrastructure. A year after launch, business was dismal, with a delinquency rate of 22% and losses of up to $20 million. It took the industry 15 years to build an electronic settlement system, debit cards were officially introduced 17 years later, and Visa spent a full 20 years establishing global payment standards.

The greatest divide between traditional payments and crypto payments lies in whether they embed users' normalized financial account relationships. Debit cards were born in 1975, but only became a standard tool for personal primary bank accounts after the普及of payroll direct deposit in the 1990s. In contrast, today's crypto payment cards primarily rely on users topping up stablecoins themselves; most crypto wallets cannot handle daily fund flows like payroll deposits and recurring payments. The overall industry development stage is roughly equivalent to debit cards around 1990.

The future leader in the crypto payment card track will not be determined by card issuance volume, but by who first builds a core account truly serving daily income and expenses, or finds a growth driver to sustain long-term user retention.

$1.5 Billion Monthly Transactions Does Not Mean Industry Maturity

Data from Artemis shows that monthly transaction volume for crypto payment cards grew from $100 million in early 2023 to $1.5 billion by the end of 2025, with an annualized volume of approximately $18 billion. Affected by on-chain data measurement methods, actual annualized values fluctuate slightly, but explosive transaction volume growth is a fact.

A closer look at these indicators reveals clear concentration in services and regions. The top service provider RedotPay accounts for over half of the industry's transaction traffic; platform access users are highly concentrated in emerging markets, with Bangladesh at 11%, India 8%, Egypt 6%, Nigeria 6%, and the US only 4%.

Thus, the real demand for crypto payment cards does not come from developed mainstream markets, but from developing regions with insufficient financial services and limited access to US dollars.

Compared to mature financial networks, the scale gap for cryptocurrencies remains enormous. Visa and Mastercard process $24 to $25 trillion annually in total payments, while crypto payment cards handle only $18 billion annually—completely different orders of magnitude.

The circulation velocity indicator measuring daily payment adoption is also low. According to Visa, the on-chain stablecoin retail circulation velocity is only 0.08, just one-twentieth of the velocity of narrow money M1 (1.65). The pattern of user stablecoin usage is not the normalized process of payroll deposits, daily consumption, and top-up cycles, but more often one-time top-ups followed by intermittent card spending.

Growth in transaction numbers does not equate to a mature universal clearing system. Currently, a large portion of crypto payment card transactions come from emerging market populations who cannot easily open US dollar accounts. For these users, crypto cards do provide practical financial value.

But in developed markets, crypto payment cards have not yet found a stable product-market fit, nor have they established the deep account-holding relationships brought by payroll deposit and automatic recurring payments.

Looking at funding channels and spending scenarios, today's crypto payment cards are better suited to niche demands in specific countries—supplementary tools, not universal financial infrastructure. However, amid rapid industry growth, the top players of the four major business models are simultaneously improving the industry chain across all links.

The Four Main Business Models of Crypto Payment Cards

The crypto card industry can be roughly divided into four business models, with various players competing to seize opportunities at different levels. These models vary, from companies focused on providing backend infrastructure to those that borrow the card form but have completely different underlying structures.

Card Issuing Infrastructure

The two well-known payment networks, Visa and Mastercard, are also used in the crypto card ecosystem. Underneath them is the card issuing infrastructure layer, extending down to consumer cards. As shown above, there are two structures within the card issuing infrastructure layer. The first is the traditional two-tier structure, where the project manager responsible for operations is separate from the issuing bank responsible for membership management and settlement. The second is full-stack issuers, such as Rain and Reap, which combine the two.

Multiple seemingly independent payment card brands all reuse a few project service providers at the underlying level. Phantom Card, MetaMask Card, and Gnosis Pay are typical examples.

Seemingly independent payment card products like Kast, Ether.fi, Tria, and Plasma One also share a small number of infrastructure service providers at the underlying level, with Rain handling the majority of consumer card business.

The high concentration of card issuance infrastructure has also attracted traditional digital banks with mature experience to enter. In March 2026, Nium launched a stablecoin card issuance platform, supporting both Visa and Mastercard networks. Other traditional financial infrastructure players include: Bridge, acquired by Stripe for $1.1 billion in early 2025; and BVNK, acquired by Mastercard for up to $1.8 billion in March 2026.

As competition in the card issuance track intensifies, full-stack issuers, established project service providers, and new fintech companies compete on the same stage. Simple card issuance business is no longer a high barrier.

Rain differentiates itself through daily stablecoin settlement. Traditional card settlement cycles take days; Rain achieves T+0 stablecoin settlement via Visa, significantly improving capital turnover efficiency for partner platforms like Ether.fi. Recently, the platform launched an AI agent control layer, supporting programmatic automatic generation of one-time virtual cards, moving beyond basic card issuance infrastructure.

Card issuers that can break out must not only provide basic payment rails but also quickly implement differentiated value-added features that traditional infrastructure cannot achieve.

Exchange-Affiliated Payment Cards

For exchanges, payment cards are not a core revenue source; their main role is to retain existing users. By leveraging the platform's existing user base, assets, and transaction data, and adding card functionality, they prevent user churn. The platform's real revenue comes from trading fees, lending business, and asset custody, not from card spending itself.

Exchanges view payment cards as a traffic entry point for building a financial super app. However, the model of cashback in the platform's native token carries risk: token price volatility can directly lead to unstable actual cashback rates.

The industry alternative is stablecoin cashback or interest on balances, but the US GENIUS Stablecoin Act prohibits interest-bearing business, posing an obstacle to market expansion.

Decentralized Wallets (DeFi)

The core logic of this model is that the wallet itself is the user's account, assets are self-custodied on-chain, not handed over to centralized exchanges, and card spending is settled directly from on-chain assets. Additionally, it offers credit lines, with assets able to be pledged as collateral.

But users must set up their own vaults, manage collateral, and monitor liquidation risks—high operational barriers, which also limits the user base to a relatively small size.

During payment, the system exchanges on-chain assets for fiat in real time for settlement, incurring on-chain gas fees per transaction. When public chain throughput is insufficient or the network is congested, gas fees may exceed the transaction amount, and transaction authorization delays are frequent.

MetaMask Card thus uses its self-developed Layer 2 network Linea, reducing single transaction gas fees to about $0.01, alleviating the pain points of high fees and delays for small payments. Tria adopts a gas-free top-up solution, with the platform covering the fees incurred during top-ups, saving users the hassle of selecting a public chain or calculating gas fees.

However, until the interactive experience balancing asset self-custody and card spending convenience is polished to the level of traditional debit cards, the users of this model will remain limited to native crypto users.

Stablecoin Digital Banks

This track currently accounts for the highest market transaction volume. Its focus is on account functionality rather than the card itself. Stablecoin balances integrate foreign exchange, cross-border remittances, and wealth management functions, with the payment card serving merely as an upper-level spending vehicle. In emerging markets with volatile local currencies, high cross-border remittance costs, and difficulty accessing US dollars, this model is highly competitive.

To sustain growth, this track must break out of the single "prepaid card" form, where users buy stablecoins to top up balances.

Cashback strategies vary with market positioning. Industry leader RedotPay and traditional fintech veteran Revolut offer no cashback at all, while later entrants like Kast and Plasma One aggressively offer cashback in dollars or platform tokens to attract users.

However, relying solely on perks cannot integrate crypto payment cards into users' daily consumption.

A Single Payment Function Cannot Support Long-Term Development

The history of traditional bank cards and digital banks proves that the profit ceiling for pure payment businesses is extremely low. These enterprises only become profitable when they incorporate the concept of a main account and structures like deposit and loan margins into their business models. The crypto payment card industry has now reached a similar critical point, but global regulatory rules like the US GENIUS Act and the EU MiCA restrict the development of stablecoin interest-bearing and asset management businesses, making breakthroughs difficult.

Under macro regulatory constraints, industry players must capture three core strategies for long-term survival:

Directly control the fund flow chain;

Secure unique application scenarios in emerging markets;

Build a proprietary user account system that cannot be replaced by underlying infrastructure providers.

Once industry standards are established, enterprises that fail to achieve these three points will gradually fall behind.

Looking back at the history of debit cards, the players that ultimately dominated the market were not those with the most card issuance, but those that first controlled users' primary bank accounts. The crypto payment card industry now faces exactly the same proposition.

Crypto card operators need to directly control the flow of funds upstream of the Visa payment loop, seize first-mover advantage in niche markets, and own the consumer infrastructure, much like the rise of bank accounts in traditional finance. This means building a global standard with no precedent.

Crypto payment cards that fail to do this will never become essential tools integrated into daily life; they will remain prepaid cards used by niche groups for small cashback.