01The four stages of crypto-to-USD conversion
Stage 1: Selection. You pick which cryptocurrency to fund with and the amount. This is the moment the conversion fee and rate-locking policy become visible. BitPay surfaces both upfront in the top-up form.
Stage 2: Deposit. You send crypto to the deposit address or scan the QR code. The system watches the network for the transaction. Most chains confirm in minutes; Bitcoin can take 10-30 minutes depending on fee priority.
Stage 3: Conversion. At confirmation, the system converts the crypto value to USD. The rate is locked at this moment. The fee (e.g. 2.5% for FREE tier, 0.7% for PRO) is deducted.
Stage 4: Credit. The net USD amount is credited to your wallet balance and available to spend immediately on any card linked to that wallet.
From your perspective: you send ETH worth $500, the conversion fee is $7.50, $492.50 lands in your USD wallet. You now have $492.50 to spend on any card you issue.
02Where the rate comes from
Most issuers aggregate multiple liquidity providers (market makers, exchanges, OTC desks) and use the mid-price plus or minus their fee. The mid-price is the midpoint between the best bid and best ask across those providers at the moment of conversion.
BitPay uses a similar aggregation model. The rate you see in the top-up form is the rate you get, locked for a short window (typically 30-90 seconds) while you sign and submit the transaction. After that window, the rate may refresh.
Some issuers offer fixed-rate conversion (often called a quote). You lock the rate, you have a fixed time window to send the crypto, the conversion uses your locked rate regardless of market movement during that window. This is the safer option for non-stablecoin deposits.
03Why stablecoins change the math entirely
Stablecoins (USDT, USDC) are designed to track $1 USD. The mid-price for USDT/USD or USDC/USD is typically within 0.001% of $1.00.
This means the conversion math becomes trivial: 100 USDT in, $99.75 out (after the 2.5% fee on the FREE tier) or $99.93 out (after the 0.7% fee on PRO). The math is predictable to the cent.
Stablecoins also remove the worst part of crypto funding - the volatility window between deposit send and confirmation. If you send ETH and confirmations take 8 minutes during a BTC sell-off, you might receive 2% less USD than the amount you sent. Stablecoins do not have this risk.
If your spend is USD-denominated (which 95% of card-program spend is), fund with USDT or USDC. Bitcoin and Ethereum add 1-3% mid-flight volatility. The math is not friendly to non-stablecoin funding for predictable recurring spend.
04Conversion fees: the three honest models
Model 1: Spread-based. The issuer does not charge an explicit fee but embeds the margin in the rate they offer you. You see a rate that is 1-3% worse than the market mid-price. This is the model traditional exchanges use.
Model 2: Explicit percentage. The issuer charges a clear percentage on top of the market rate. BitPay uses this model - 2.5% on FREE, 0.7% on PRO, custom on CUSTOM. You see both the rate and the fee.
Model 3: Flat fee per conversion. Some issuers charge $5-$10 flat per conversion regardless of size. This hurts small operators and helps whale transfers; rarely honest for card programs.
BitPay uses Model 2 because it is the most predictable and the easiest to budget against. At 0.7%, a $100,000 monthly conversion is $700 in fees - a known cost you can include in your financial projections. With Model 1, the same conversion might cost $500 or $2,000 depending on the spread - hard to budget.
05What determines the rate you actually get
Three factors. First, the aggregated liquidity at the moment of conversion. If the market is calm and liquid, you get a tight mid-price. If the market is volatile, the spread widens and you get a slightly worse rate.
Second, the size of your conversion. Larger conversions (above $50,000) may get a slight premium because they move through OTC desks with better rates. Smaller conversions (below $1,000) may get a slight discount because they pass through retail liquidity pools.
Third, the network fee. If you are sending ETH during a high-gas period, a portion of the crypto you sent goes to miners, not the issuer. BitPay absorbs this when possible; on extreme days, the rate shown to you already accounts for typical network conditions.
06How to compare conversion fees across issuers
Use the same test: send exactly $1,000 worth of USDC and see what lands in your wallet. The honest fee math: $1,000 minus the percentage fee.
0.5% means $995 lands. 1.0% means $990. 2.5% means $975. 2.0% means $980. Anything above 2% for a card program is suspicious.
Some issuers add hidden fees in the rate (spread). They will show you a conversion fee of 0.5% but their rate is 1.2% worse than the market. The true cost is 1.7%. Read the fine print or test with a small conversion.
BitPay shows both the rate and the percentage fee in the top-up form, side by side. There is no spread margin. You see the rate you get, the fee you pay, and the net USD before you confirm.
07When fixed-rate conversion matters
If you are funding with BTC, ETH, or any volatile crypto, fixed-rate conversion matters. The 30-second window for confirming a deposit can move the rate by 0.1-0.5% in either direction. That is potentially hundreds of dollars on a large conversion.
If you are funding with USDT or USDC, fixed-rate conversion matters less. The rate is already known to within 0.001%. The 30-second window does not change the result in any meaningful way.
BitPay offers both modes. Fixed-rate for non-stablecoin deposits is the safer default; floating-rate is available for users who want to gamble on confirmation speed.
08The economics of running a crypto-to-card conversion business
If you are curious why fees exist: the issuer needs to pay for liquidity providers, fraud monitoring, chargeback reserves, regulatory overhead, card network fees (Visa/Mastercard charge per transaction), and customer support.
Card network fees are typically 0.14% to 0.30% of the transaction. Fraud monitoring and chargeback reserves are typically another 0.3% to 0.8%. Liquidity provider fees are usually 0.1% to 0.4%. So a 1.0% to 1.5% fee for a small issuer is roughly break-even. A 0.5% fee is below break-even unless volume is high.
BitPay sustains low fees (0.7% on PRO) through volume, automation, and a focused product. Smaller issuers often charge more because they have less volume to spread fixed costs across. The fee you pay is, indirectly, a signal of issuer health.
