CryptoSpend – bridging the gap between traditional finance and cryptocurrencies

Sub11 - A New home for Australian fintech news and information

Andrew Grech - Cryptospend

Five years ago, buying coffee with cryptocurrency seemed like an unusual task. Now, it makes sense and is made possible with platforms like CryptoSpend.

While studying at university together, Andrew Grech and Richard Voice had an idea to build a platform that allowed more accessibility and usability of cryptocurrencies. Grech says when they started CryptoSpend in 2017, cryptocurrencies were “designed to be currencies”, but were more like “a crypto commodity”. “It wasn’t very easily tradable at that point; it wasn’t easily spendable … you had no cards in the market and you had to wait days to actually access your gains.”

“Our initial thought on this was just, if you’re looking to sell down some of your crypto holdings, why sell it in big chunks when you can just spend it as you need it?”

The main challenge is that, like any currency, the merchant needs to be able to accept that type of payment, and cryptocurrencies (such as Bitcoin, XRP) are not yet widely accepted. So, those that own cryptocurrencies need to convert them to fiat for almost all purchases, which typically takes time and costs money.

After three years of building, the first version of CryptoSpend was launched in 2020. However, it wasn’t what Grech and Voice had originally intended. “At that point in time, the regulation wasn’t really up to scratch for any of the card providers to actually be happy with things like source of funds and proper AML [anti-money laundering] controls. The technology wasn’t there in place at that time, and Visa and Mastercard weren’t really there yet with crypto.”

“So, we had to pivot, and at that point our first product was just a crypto wallet where you could send your Bitcoin, Ethereum, Litecoin, XRP or Bitcoin Cash [i.e. cryptocurrencies] … to PayID, or a BSB and account number, or a BPAY biller. You could basically get instant access in cash to your crypto, but it was sending it to your bank account in fiat. So, it was this instant conversion.”

Now, through continued development and partnerships with Novatti and Visa, CryptoSpend uses that conversion technology within the CryptoSpend Card: a Visa card that allows for purchases by automatically making the cryptocurrency to fiat conversion.

“The merchant receives fiat, but then the consumer – the CryptoSpend customer – is actually spending crypto… You can choose whatever crypto you want to spend that you have. So, you’re choosing to spend Bitcoin for example, [and] the merchant will have no idea that it’s coming from crypto; for them it’s just a standard Visa transaction, so they will get fiat straight away.”

While CryptoSpend is not the first in the world to achieve this, where international players such as have a similar card, the intention is to be the most accessible. “With us, rather than waiting for a card to come, you can literally get started in five minutes and go to the shop and start spending, because we have instant push provisioning. You can push it to your Apple Pay or Google Pay wallet without actually having the physical card, and start going right away.”

And what they’re seeing, unexpectedly, is an uptake of lots of small transactions. “Cafés, restaurants, and takeaway, in July, was our biggest category in terms of spend.”

“It’s really surprising for us to see as well, because we actually originally thought ‘people will just use this for big purchases’, you know, if they go and buy something from JB Hi-Fi... We thought that’s going to be our biggest category, but in reality, it’s really not. Cafés, restaurants and takeaway is our biggest… Supermarkets, grocery stores and convenience stores is second, which is not far behind the first.

“Looking at that… you can see that people are using this in their day to day lives, they’re not just using it for just one-off purchases.”

The Company has since added more features, such as a rewards program where users get 3% of their spending back in their cryptocurrency wallet as XRP (i.e. one of the top five cryptocurrencies of 2022). Grech adds that this wallet also facilitates fiat purchases, meaning, “you get rewarded in that for your purchases, even if it’s in AUD”.

Additionally, before the end of the year, CryptoSpend aims to expand their platform to facilitate staking with ‘proof-of-stake’ tokens (i.e. a different way of confirming transactions and creating new blocks on the blockchain). The company also plans to release more tokens, above their seven current coins and tokens, “so there’s much more diversity in what you can actually spend, buy and hold on the CryptoSpend app”.

The CEO himself, when he’s not talking about crypto, has taken up a new hobby of golf. Grech says “it’s a pretty good release… to put in nine holes or just going to the driving range”, a release surely needed after days of work and the planning of his wedding.