As users become more involved in self-custody solutions, the hardware wallet industry continues to grow with innovation and partnerships. Tangem, known for its card-shaped crypto hardware wallets, has partnered with global payments provider Visa (NYSE:V) to allow crypto payments at millions of Visa-supported terminals around the globe.
As a move to bring crypto adoption to the masses, the Visa payment card’s chip is integrated with the Tangem applet, Tangem Pay. Said to be the first fully self-custodial payment solution integrated with a global payment network, the card will allow Tangem users to make payments using their crypto assets directly at 95 million Visa terminals worldwide. The app is expected to launch on October 5, with Tangem Pay to follow suit in 2024.
Self-custody, or non-custodial, wallets give users full ownership and responsibility of crypto assets instead of centralized exchange wallets, where the control of funds is in the “custody” of said exchanges or third parties. User interest in self-custody reignited as the crypto ecosystem realized the risks of leaving crypto assets in the hands of centralized exchanges.
Last year, a number of major crypto exchanges — including top U.S. player FTX — collapsed, leaving the fate of billions of dollars of customers’ funds unclear. Suddenly, storing and managing your own crypto became the safer option, and the adage “not your keys, not your coins” became popular again, triggering a “crypto exodus” from centralized entities to self-custody. It also translated into a massive user base expansion for hardware wallets.
Since last year, Tangem has experienced 738% growth in monthly active users for its card-shaped crypto wallets. The team clearly aims to take market share from established rivals, including Ledger Wallet and Trezor, and crypto payments can be a key to achieving that.
Aside from the Visa partnership, Tangem announced new user-centric features, including token sorting, grouping, and transaction history. Worldwide shipping of the hardware wallets to over 140 countries arriving is on October 10.
How Visa Crypto Payments Work
When it comes to the technical details of how the integration between Visa and Tangem would work, the company announced that the upcoming Tangem applet will enable the Visa payment card to hold the public and private keys of a crypto wallet. The card will generate a Visa payment message each time it’s used at a payment terminal. Users can approve the payment by entering the password generated for that specific transaction, confirming the transfer on the blockchain.
Once the payment is approved, the crypto equivalent of required funds will be deducted directly from the user’s hardware wallet, while a real-time transaction is authorized by a public smart contract. Tangem said this would achieve full transparency without intermediaries or any hidden custody mechanics.
Founded in 2017 in Zug, Switzerland, Tangem makes hardware cold wallets that support multiple cryptocurrencies. Tangem wallets allow users to store, buy, earn, transfer, and swap over 6,000 cryptocurrencies and digital assets, according to its official website. Users can manage their assets with an NFC-enabled smartphone and the companion app.
The growth of self-custody unlocks new necessities for crypto users and new possibilities for wallet providers. Bridging self-custody with card payments is the logical next step in the evolution of cryptocurrencies.
Tangem’s card-shaped wallets have an edge when it comes to the actual payment process at terminals compared to other hardware wallet form factors, like USB or hard drive-shaped models. With the integration of the Visa payment network, crypto may finally expand its use beyond an investment tool to become an everyday payment vehicle for a much bigger user base.