Credit card companies are trying to sweeten the perks they offer their customers, and American Express is doing just that through a new partnership with crypto wealth management platform and wallet provider Abra. The companies' CEOs announced the launch of the Abra Crypto Card on the Amex network today at Coindesk's Consensus conference in Austin, Texas.
The card will allow users transacting in U.S. dollars to earn cryptocurrency rewards on their purchases through the Amex network, Bill Barhydt, founder and CEO of Abra told TechCrunch in an interview.
Abra declined to share details on which cryptocurrencies will be available to users in the first version of its card, which will launch late this year, but Barhydt said the offering will eventually allow users to choose to receive their rewards through multiple different cryptocurrencies as well as traditional rewards such as entertainment and dining-related perks already offered on the Amex platform.
Users can choose to receive rewards in the form of Abra's ERC-20 Crypto Perx (CPRX) token or another cryptocurrency, he explained. CPRX is a utility token with more than a million holders already through Abra's own perks program, according to Barhydt. The credit card will offer customers some sort of benefit for choosing to receive their rewards in CPRX versus another cryptocurrency, Barhydt said, though details are still unclear.
Card users will have to be registered with Abra, and the card will function by having these users apply for a line of credit, Barhydt explained. Once they start earning crypto rewards, they'll be able to use Abra's swap exchange to convert these rewards across different cryptocurrencies easily, he added.
"Eventually, we're also working on a solution that will allow you to use your existing crypto balance to affect your credit line, which is something we'll probably launch in the future. I think that's a big benefit because a lot of crypto holders are kind of penalized when it comes to banking and credit," Barhydt said.
The card is geared toward two different groups -- crypto enthusiasts with experience, and those who are looking to enter the crypto world for the first time through a simple entry point, according to Barhydt.
"They'll earn crypto rewards without having to convert their other assets to crypto," he said.
Amex users have been waiting for an announcement like this for some time, as its competitors Visa and Mastercard have already launched their own crypto rewards credit cards through partnerships with digital asset companies, such as Visa's crypto rewards card offered in conjunction with BlockFi and the Mastercard-powered card issued by crypto exchange Gemini. Fintech companies Brex, Venmo and SoFi all also offer their own crypto rewards credit cards.
American Express was cautious about entering this market, but the Abra card is likely a precursor to more crypto-related products for the company.
"We've been modernizing the American Express networking capabilities over the last many years, and through that, we're looking to launch innovative and leading value propositions. This announcement with Abra is the first product that we're announcing on that platform," Mohammed Badi, president of Global Network Services at American Express, told TechCrunch in an interview.