Do you perhaps want to trade cryptocurrencies by using Binance, but don’t know if certain forms of payments, such as prepaid cards, are accepted in the exchange?
While there are other cryptocurrency markets like BitPay which do take prepaid debit cards, Binance does not yet accept prepaid cards.
Binance accepts many other forms of deposits and payment such as debit cards, credit cards, PayPal, and bank transfers.
Stay with us to find out all you need to know regarding Binance and what forms of payment they accept for exchanges and purchases, along with alternative recommendations to help you invest in cryptocurrencies better.
What’s the difference between prepaid and other cards?
A prepaid card draws from the money you load onto it, and not an external source. Whereas debit and credit cards draws money from a linked bank account, or in the case of credit, the excess amount you spend is put as a loan on your card to be paid later with the money from your bank account.
Prepaid cards are also known as pay-as-you-go cards and are mostly used by people who do not have a bank account or those who are looking to make purchases discreetly without it being traced back to them in one way or the other.
Prepaid cards are therefore also more convenient and easy to acquire than debit cards, credit cards, PayPal, et cetera.
Read also >> Does Coinbase Accept Prepaid Cards? (Here Is Why)
Why doesn’t Binance accept prepaid cards?
Prepaid cards have recently become a popular method of purchasing bitcoins and e-currency, however, there are cryptocurrency trading markets which do not take prepaid cards as a legitimate payment source right now, like eToro and Binance.
This is expected to change, as these forums will also adapt to the rising prepaid card popularity and include them in the accepted payment sources.
A major reason why Binance does not accept prepaid cards for cryptocurrency trading is because of the information deficit from the buyer’s side when they use a prepaid card.
A prepaid card also ensures anonymity on the buyer’s side, which isn’t necessarily a motivation for Binance to allow such a transaction for the lack of transparency.
Prepaid cards are also used by people with a bad record or credit issues, and those who are often denied bank accounts.
So, it is understandable why a company such as Binance would be skeptical of allowing payments made through a prepaid card source, as the source lacks trustworthiness and credibility.
What forms of payment does Binance accept and why?
Even though Binance is rigid with its policies regarding the ban of prepaid card payments, it does allow a variety of other, more certified sources for purchase.
Some of these sources include PayPal, bank deposits, credit cards, debit cards, and any other form of deposit linked to a reliable source that can be traced back to the account holder.
According to Binance, the payment methods allowed for investors and traders alike are as follows:
- Bank deposits for fiat currencies
- Credit and debit cards: Visa, MasterCard (only)
- Google Pay and Apple Pay
- PTP trading by bank deposits and transfers
- External payments/third party: ADVcash, Bank Transfer (BBK), Zen, Inswitch, Truelayer, Simplex, GEO Pay, and Bifinity
What cryptocurrency exchange markets accept prepaid cards?
Fortunately, there are some cryptocurrency exchange platforms which do accept prepaid cards, however, you’ll need to keep in mind the safety and regulation aspects.
According to Inside Bitcoins, Coinbase and Coinmama are licensed and regulated platforms, which means their safety is also top notch, whereas CEX is still unregulated. Despite that, CEX is registered with a legitimate and credible company with good safety measures like FinCEN, which adds to its trustworthiness.
While these platforms do accept prepaid cards, they might charge more for the prepaid cards, so the next important aspect to look out for is the pricing.
Fortunately for you, the aforementioned platforms charge a reasonable yet competitive fee on prepaid card payments as compared to what the rest of the market is charging.
Advantages and disadvantages of using prepaid cards for buying cryptocurrency
Advantages
- Instant and convenient – you get your coins quicker.
- Good accessibility and inclusivity for people who cannot afford bank accounts.
- Efficient and effective transactions
- Lowers the risk of debt (for example, in cases of credit cards).
- Less transparency and less information revealed that can be used against you.
- Lower losses from hacking – is not attached to any bank accounts so only the deposited money on the card will be lost.
- More security
Disadvantages
- Not universal – only a few platforms accept it as a method of payment.
- Costs more than normal credit or debit card payments.
- Might be charged hidden fee upon bitcoin purchases by some platforms.
- Limitations set by the platform on the amount of coins you can purchase with a prepaid card.
- Less credibility on account of the buyer – might lead to cancellation of purchase.
Why are prepaid payments becoming more popular in cryptocurrency trading?
Prepaid payments are becoming more popular in cryptocurrency trading and exchanges because of its aforementioned pros; not only is it easier to acquire and use, it also gives the user complete independence over what information of theirs is being handed over to the broker, for safety and regulation purposes.
There are also some people who cannot afford to get bank accounts or aren’t allowed to because of bad records and credit issues, thus they were not able to purchase bitcoins before as most platforms only allowed bank account holders to buy them.
Now, starting from a few platforms that have allowed prepaid payment services, the usage of these is becoming more popular, especially for people who couldn’t make payments before.
In the near future, the usage of prepaid services is expected to increase massively.
Conclusion
Although Binance does not accept prepaid card payments because of its own rules, regulations, and payment policies, there are a lot of cryptocurrency exchange platforms that do accept it as a credible payment method.
There are alternatives available if you don’t hold a bank account and still want to invest or trade in bitcoins, so don’t let the limitations stop you from investing.