Crypto cards let you pay from a crypto or stablecoin wallet while the merchant still receives normal money through the card networks they already use (Visa/Mastercard). To the shopper and the store, it feels like a regular card payment; the crypto part happens in the background.

There are two practical setups. Prepaid means you convert to fiat first and spend from that loaded balance (always debit). Real-time means you keep value in your wallet and it’s converted to fiat at the moment the payment is approved (can be debit or credit).

Every payment has two moments: a fast approval so you can walk away, and settlement later when money moves between the merchant’s provider, the network, and the issuer (usually next business day or two). Over time, some flows will settle directly onchain in seconds via a gateway, with an optional off-ramp to bank money.

Today, fees look familiar: the merchant’s provider takes a service charge, issuers earn interchange, networks charge scheme fees, and the wallet/API earns a conversion spread when it turns crypto into fiat. The biggest near-term change is in business and cross-border payments, where stablecoins can cut steps and shorten settlement windows. As this grows, more value shifts to whoever controls when crypto becomes fiat and how final settlement happens.

We’ll try to go deeper in the following blogs to understand the crypto cards ecosystem more deeply, but for now let’s understand each of the flows in this high level chart.

1. prepaid flow (prefunded fiat; debit only)

the user converts to fiat before spending and the issuer approves against that prepaid fiat balance; the merchant receives fiat later through normal card settlement.

• Before tap: convert crypto/stablecoin to fiat and load the card account

• Path: POS terminal → acquirer/PSP → Visa/Mastercard → issuer

• Issuer action: check prepaid fiat, place hold, authorize

• Settlement: via card rails (T+1–T+3)

2. real-time debit flow (linked wallet/API)

the program checks the user’s wallet at authorization, locks the amount, converts to fiat, and then approves; the merchant still receives fiat later through card settlement even though both sides can see the transaction instantly.

• Path: POS terminal → acquirer/PSP → Visa/Mastercard → issuer/program

• Program API: check wallet → lock → convert to fiat → authorize

• Issuer approves based on that conversion and lock

• Visibility: instant (webhooks); settlement remains T+1–T+3 on card rails

3. real-time credit flow (credit line; wallet-referenced optional)

the issuer approves against a credit line (sometimes also looking at wallet balance as a signal or collateral), and the merchant receives fiat later through card settlement with normal credit economics in play.

• Path: POS terminal → acquirer/PSP → Visa/Mastercard → issuer

• Issuer action: check credit line (wallet may inform risk) → authorize

• Settlement: standard card clearing (T+1–T+3); credit economics apply

4. onchain settlement flow (future / limited pilots)

the payment is sent to a blockchain by the POS or gateway, the merchant sees funds within seconds in their onchain wallet, and card-network clearing is not part of that payment; the merchant can off-ramp to bank money if they want.

• Path: POS/gateway → L1/L2 → merchant wallet (no card-network clearing for that payment)

• Outcome: seconds to finality, optional off-ramp, programmable rewards/tax/splits in-transaction

Where will the disruption really happen in our opinion? Key takeaways.

• b2b (bank to bank) get disrupted first

currently for the b2b connects, there’s really no frontend, it’s a basically handled in the backend by these banks basically communicating with each other individually or probably via some mechanism like (swift). With the help of crypto and guard rails, there’s a good potential to build a consumer friendly frontend which could benefit the treasury and operations: faster final money movement, fewer reconciliation breaks, and cleaner cash positions.

• Elimination of interbank card networks (visa/mastercard)

In the current setup, Visa and Mastercard behave like the interbank networks that almost everyone uses every day, and most crypto card payments still rely on them for clearing and settlement; if a payment is handled fully onchain end-to-end, that specific payment does not use card-network clearing and can feel like a direct bank-to-bank experience for the user and the merchant, which will potentially end up eliminating the whole need for interbank operators like visa/ mastercard

• Swift and correspondent banks (b2b cross-border)

Most of the cross-border banking today use SWIFT messages and correspondent banks exist because each bank runs its own ledger and must pass instructions across intermediaries; if both sides use the same onchain rail for that transfer, those SWIFT and correspondent hops are not required for that leg because both parties update one shared ledger.

• Settlement finance (the T+1/T+2 gap)

Right now, settlement usually lands a day or two after approval, so banks provide short-term “settlement finance” to bridge the gap; if the payment leg settles onchain with finality in seconds, that gap disappears for that leg and the need for settlement-gap financing goes away with it.

• Merchant funding time

For merchants today, even when a crypto card approves instantly, the actual funds still arrive through card settlement a day or two later; if that same merchant (or its gateway) accepts an onchain payment for that transaction, the funds can arrive in seconds and card-network clearing is not part of that transaction.

• Product axis (prepaid vs real-time)

For card programs, the real axis is when crypto turns into fiat: prepaid converts before spending, while real-time converts at the moment of authorization; custody mainly changes how the lock and conversion are done (an exchange hold versus a smart-contract allowance) rather than the path through merchant, acquirer, network, and issuer.

• Two clocks in every payment

Every card payment follows two clocks: the “yes/no now” decision happens in seconds so the shopper can leave, and the “money later” movement happens after clearing so the merchant gets funded, whereas a fully onchain payment can compress both steps into seconds for that specific transaction.

• Who captures economics

Economics follow control of conversion and settlement: today issuers earn interchange, networks earn scheme fees, acquirers earn the merchant fee, and wallets or APIs earn a conversion spread when they convert crypto to fiat; as more legs run onchain, a larger share of value and data shifts toward whoever operates the onchain rail for that corridor and a smaller share sits in card-specific fees for those legs.

Overall we feel, there's a really good market potential and share that cards/ neobanks models can take over and provide in general a better user experience than the already existing web2 solutions. Excited to dive in deeper and compare the various cards and their offerings over the next few reports.