Nexo Mastercard Hybrid Card: Crypto-Backed Payment Solution with Dual Credit/Debit Functionality

Basic Information

The Nexo Card is a unique cryptocurrency-backed payment solution that functions as both a credit and debit card through the same physical or virtual card. In Credit Mode, the card draws from an instant crypto-backed credit line, allowing users to borrow against their digital assets while retaining ownership of their coins. In Debit Mode, it directly spends existing crypto or fiat balances from the user's Nexo account, functioning like a prepaid card.

Launched in 2022 through a partnership between Nexo, Mastercard, and fintech provider DiPocket, the card bridges the gap between traditional payment systems and cryptocurrency holdings, allowing users to access the value of their digital assets without selling them.

Rewards and Benefits

The Nexo Card offers a tiered rewards structure based on the company's loyalty program, which classifies users based on the percentage of NEXO tokens held in their overall portfolio.

Cashback Program

The card provides cashback on all Credit Mode purchases (not available on Debit Mode transactions). The cashback rate depends on the user's loyalty tier:

• Base Tier: 0.5% in NEXO tokens or 0.1% in Bitcoin
• Silver Tier: 0.7% in NEXO tokens or 0.2% in Bitcoin
• Gold Tier: 1% in NEXO tokens or 0.3% in Bitcoin
• Platinum Tier: 2% in NEXO tokens or 0.5% in Bitcoin

Cashback rewards are credited directly to the user's Nexo account after each transaction is approved, with a monthly cap of €200 in rewards.

Note: UK users no longer receive cashback due to regulatory changes implemented in October 2023.

Loyalty Tiers

Benefits scale based on the percentage of NEXO tokens in a user's portfolio:

• Base Tier: 0% NEXO tokens (no requirement)
• Silver Tier: At least 1% of portfolio in NEXO tokens
• Gold Tier: At least 5% of portfolio in NEXO tokens
• Platinum Tier: At least 10% of portfolio in NEXO tokens

All tiers above Base level require a minimum $5,000 portfolio value to qualify for full Loyalty Program benefits, including cashback.

Beyond cashback, higher loyalty tiers provide additional benefits:

• Lower interest rates on the crypto-backed credit line
• Higher free ATM withdrawal allowances
• Greater foreign transaction fee-free limits
• Eligibility for physical card (Gold tier and above)

Fees and Limits

Transaction Fees

The Nexo Card stands out for its minimal fee structure. There are no monthly fees, no card issuance fees, and no standard purchase transaction fees. However, there are some conditional fees:

• ATM Withdrawals: Free up to a monthly limit based on loyalty tier, then 2% fee (minimum €1.99/£1.99)

  • Base Tier: Up to €200/month free
  • Silver Tier: Up to €400/month free
  • Gold Tier: Up to €1,000/month free
  • Platinum Tier: Up to €2,000/month free

• Foreign Transaction Fees: Vary based on region and timing

  • Within EEA/UK/Switzerland: 0.2% on weekdays, 0.7% on weekends
  • Outside these regions: 2.0% on weekdays, 2.5% on weekends

Credit Line Interest

When using the card in Credit Mode, interest is charged on the borrowed amount. Rates vary based on loyalty tier and Loan-to-Value (LTV) ratio:

Note: Rates were updated in May 2024, when Nexo increased the minimum borrowing rate from 0% to 2.9% for Platinum users with low LTV.

Spending and Withdrawal Limits

Card Tiers and Options

All Nexo Cards feature standard Mastercard branding with similar appearance regardless of tier. The physical card is only available to Gold and Platinum tier users with a minimum portfolio value of $5,000. Users below this threshold can still use the virtual card but will receive reduced benefits.

Both virtual and physical cards support integration with Apple Pay and Google Pay for contactless payments. The virtual card can be activated immediately upon approval, while the physical card is shipped free of charge to eligible users.

Top-Up Methods

Self-Custody Custodial

Supported Currencies and Conversion

Cryptocurrencies

The Nexo Card supports a wide range of digital assets:

• Credit Mode Collateral: 40+ cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), XRP, Cardano (ADA), Solana (SOL), Polkadot (DOT), Avalanche (AVAX), Polygon (MATIC), and major stablecoins (USDT, USDC, DAI)
• Debit Mode Spending: 100+ crypto assets supported by the Nexo platform
• Reward Options: NEXO token or Bitcoin

Users can prioritize which assets to spend first through a drag-and-drop interface in the Nexo app when using Debit Mode.

Fiat Currencies

Nexo provides internal fiat accounts (denoted as USDx, EURx, GBPx) in:

• US Dollar (USD)
• Euro (EUR)
• British Pound (GBP)

The card can transact in multiple currencies with Mastercard handling conversion. Personal IBAN accounts support top-ups in USD, EUR, or GBP.

Conversion Process

• Credit Mode: No immediate conversion—purchases create a loan against crypto collateral
• Debit Mode: Assets are converted to fiat at the moment of purchase
• Exchange Rate: Nexo's exchange rates include a small spread (typically 1-2%)
• Settlement: Real-time conversion and settlement at point of sale
• Interest: Continues accruing on assets until the moment they're spent

Users have full control over which assets are used first through the app's priority setting feature, and can toggle between credit and debit modes at any time.

Geographic Availability

The Nexo Card is currently available in:

Europe

• European Union member states: Austria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden
• European Economic Area (non-EU): Iceland, Liechtenstein, Norway
• Other European countries: United Kingdom, Switzerland, Andorra

Excluded Regions

The card is notably unavailable in:

• United States (Nexo exited the U.S. market after regulatory issues)
• Bulgaria (despite Nexo being headquartered there)
• Estonia
• Any country outside the explicitly supported list

Regional Variations

• UK users: Lost cashback features in October 2023 due to FCA regulatory changes
• Currency issuance: Cards are typically issued in EUR for EEA users and GBP for UK users

Nexo has announced plans to expand the card's availability to new regions, including Latin America, by the end of 2025 as part of its growth strategy.

Compliance and Security

Regulatory Framework

The Nexo Card operates within a comprehensive regulatory framework:

• Card issued by DiPocket, an authorized Electronic Money Institution in the EU (regulated by Lithuania's central bank)
• Nexo holds multiple licenses globally, including registration as a Virtual Currency Operator in Italy, crypto asset service provider in Lithuania and Poland, and Securities Dealer License in Seychelles
• Regulated in over 150 jurisdictions overall

Identity Verification

• Full KYC (Know-Your-Customer) verification required before card application
• Includes ID and proof of address verification
• Minimum age requirement of 18+
• Only personal accounts (not anonymous) eligible for card issuance

Security Features

The Nexo Card and platform include numerous security measures:

• Real-time notifications for every transaction
• Ability to freeze/unfreeze card instantly through app
• PIN code changes via app
• Multi-factor authentication (SMS, email, authenticator app)
• Anti-phishing code feature for email verification
• 256-bit SSL encryption
• Address whitelisting for crypto withdrawals
• Biometric login support (fingerprint/FaceID)

Asset Protection

• Fully custodial model - Nexo holds user assets
• Partners with third-party custodians like Ledger Vault and Fireblocks
• Assets stored using multi-signature wallets and cold storage solutions
• Client assets insured "by millions" in coverage through custody providers
• Previously announced $375M insurance via Lloyd's-backed custodians

Compliance Partners

• Uses Chainalysis to monitor transactions for illicit activity
• Partners with Jumio and SumSub for identity verification and AML screening

Technical Details

Card Specifications

• Physical card: Standard plastic Mastercard with Nexo branding
• Virtual card: Digital card available immediately in the Nexo app
• Card technology: EMV chip, contactless capability, magnetic stripe
• Security code: Standard 3-digit CVV on back of physical card

Activation and Setup

• Virtual card: Activation requires minimum $50 account balance
• Physical card: Requires Gold loyalty tier (minimum 5% of portfolio in NEXO tokens) and $5,000 minimum portfolio value
• Mobile wallet integration: Both card versions can be added to Apple Pay and Google Pay

Mobile App Integration

The Nexo Card is managed through the Nexo mobile app (iOS and Android), which provides:

• Card management through dedicated "Card" tab
• Real-time transaction monitoring
• Toggle between Debit and Credit modes
• Asset spending priority configuration (drag-and-drop)
• PIN management and card security controls
• Instant freezing capability if card is lost or stolen

Transaction Processing

• Merchant acceptance: Compatible with 92M+ merchant locations worldwide that support Mastercard
• Transaction limits: €10,000 per transaction, €10,000 per day, €60,000 per month
• ATM capabilities: €600 per withdrawal, €2,000 per day, €10,000 per month
• Online purchases: Fully supported with standard security features

User Experience

App and Account Management

The Nexo mobile app serves as the primary interface for managing the card:

• Available for iOS and Android devices
• Intuitive interface with dedicated card management section
• Real-time transaction notifications
• Ability to toggle between Credit and Debit modes
• Customizable asset spending priority
• PIN management and security controls

Customer Support

Nexo offers multiple support channels:

• 24/7 customer support
• In-app chat
• Email support (support@nexo.com)
• Web contact form
• Active support presence on social media and Reddit
• No telephone support currently available

Common User Experiences

Based on user feedback, common experiences include:

• Generally positive sentiment, especially among active Nexo ecosystem users
• "99% of transactions" reportedly go through without issues
• Appreciation for instant cashback and the convenience of spending crypto

Reported Issues

Users have encountered some challenges:

• Some merchants (e.g., certain retailers in Netherlands) declining Nexo Card transactions
• Occasional confusion from policy changes and fee adjustments
• Frustration among UK users regarding loss of cashback due to regulations
• Some users find the $5,000 threshold for full benefits limiting for smaller portfolios

Merchant Compatibility

While the card works with most Mastercard-accepting merchants, there are some exceptions:

• Some transaction types are ineligible for cashback (government services, postal services)
• Certain merchants might block the card as they identify it as a prepaid product
• Virtual card details sometimes work where physical card is declined for online payments

Best Suited For

• Crypto HODLers who want to access the value of their assets without selling them, preserving potential future appreciation
• European travelers who benefit from the card's competitive foreign exchange rates and generous ATM withdrawal limits
• Active Nexo platform users who already maintain significant holdings and can easily qualify for higher loyalty tiers
• Crypto investors with diversified portfolios who can comfortably allocate 5-10% to NEXO tokens to reach Gold/Platinum tiers
• Users comfortable with centralized platforms who accept the custodial nature of the service in exchange for convenience

Pros and Cons

Pros

• Unique dual functionality allows both direct spending and borrowing against crypto assets
• No monthly fees and competitive foreign transaction fees compared to traditional banking cards
• Higher-tier users can access significant benefits (2% cashback, low interest rates, generous limits)
• Seamless integration with Apple Pay and Google Pay for contactless payments
• Assets continue earning interest until the moment they're spent when using Debit Mode

Cons

• Limited geographical availability (currently only EEA, UK, Switzerland, and Andorra)
• $5,000 minimum portfolio requirement for full loyalty benefits limits accessibility
• Physical card requires Gold tier (5%+ NEXO tokens) and sufficient portfolio value
• UK users no longer receive cashback due to regulatory changes
• Using Credit Mode creates debt that accrues interest until repaid

Conclusion

The Nexo Card successfully bridges the crypto and traditional finance worlds by offering users a way to access the value of their digital assets without selling them. Its dual-mode functionality—allowing users to either spend directly from their crypto/fiat balance or borrow against their assets—provides unique flexibility compared to standard crypto debit cards.

The card delivers significant value for loyal Nexo users, particularly those at Gold and Platinum tiers who benefit from higher cashback rates and lower borrowing costs. The minimal fee structure, including no monthly fees and low foreign transaction costs, enhances its appeal as a daily spending tool. For frequent travelers within Europe, the card offers exceptional utility with minimal currency conversion fees and worldwide acceptance through the Mastercard network.

However, the card has notable limitations. Small account holders (under $5,000) receive significantly reduced benefits, making the card less appealing for crypto beginners or those with modest holdings. The UK's regulatory changes have eliminated cashback for users in that region, diminishing the card's value proposition there. Additionally, the geographic availability remains limited primarily to Europe.

The ideal user for the Nexo Card is a crypto enthusiast with at least $5,000 in digital assets who wants to maintain exposure to crypto's potential upside while accessing liquidity for everyday spending. For these users, the Nexo Card transforms crypto from a speculative investment into a practical financial tool that seamlessly integrates with daily life.

Additional Information

Platform Risk Considerations

Using the Nexo Card requires keeping funds on a centralized platform, introducing counterparty risk. While Nexo has maintained solvency during market turbulence (unlike competitors like Celsius and BlockFi), users should be aware of potential vulnerabilities:

• In early 2023, Nexo faced investigation by Bulgarian authorities for alleged money laundering and financial crimes, with prosecutors claiming the company violated sanctions against Russia. Nexo denied wrongdoing, but such legal challenges illustrate potential risks.
• Nexo withdrew from the U.S. market in late 2022 after regulatory challenges, forcing U.S. clients to withdraw funds.
• A potential data leak in late 2023 was reported by users who noticed spam emails targeting addresses used only for Nexo, suggesting possible exposure of personal data. Nexo officially denied any breach.

Interest Rate Risk and Market Volatility

Using the card's credit mode effectively creates a loan against volatile collateral. This introduces specific risks:

• If crypto prices drop significantly, your Loan-to-Value (LTV) ratio increases, potentially triggering margin calls or forced liquidation of assets.
• Interest rates can change—in May 2024, Nexo increased the minimum borrowing rate from 0% to 2.9% for Platinum users, ending a previous free-credit perk.
• Market downturns could turn routine card spending into a financial challenge if the value of collateral decreases dramatically.

Strategic Usage Optimization

Experienced users have developed strategies to maximize the card's benefits:

• Platinum users often immediately repay credit balances to minimize interest while earning the full 2% cashback.
• Some maintain a specific LTV ratio to balance interest costs against rewards and portfolio growth.
• Strategic asset selection for debit mode spending can preserve appreciating assets while spending stablecoins.
• Using virtual card via Apple/Google Pay when physical card is declined for certain merchants.
• Setting appropriate asset spending priority based on market conditions and investment outlook.