I am not sure for now , I think they make money of exchange rates, see the details above, I think at the moment of conversion the xapos' rate was little lower than the market rate. Basically xapo's network pays the merchant with fiat on card holders' behalf and puts equivalent amount of your bitcoins on hold, I think thats where its making the money. I will see if by the time I spend my bitcoin if its reasonable or not. But if bitcoins price in USD $ goes up, that would be nice...