Over the course of our six-year history, there is one function at CEX.IO that our users got accustomed to – fiat deposits and withdrawals. From the introduction of this function back in 2014, we’ve dedicated a lot of efforts to sustain uninterrupted, fast and secure money transfers. To accomplish this, we’ve built an entire ecosystem of partners, both banks and payment processors in different parts of the world. In this post, we’ll share how our continuous work in this direction allows us to create value for our users in the form of smaller commissions and decreased minimum limits. Read on to learn how your payments at CEX.IO just got cheaper! 

Are we out of the woods?

What seems like a permanent feature at CEX.IO – fiat processing – it is hardly something we take for granted. When cryptocurrencies became interesting to people outside of the initial tech-savvy group of crypto-enthusiasts the only way these “non-techy” people could enter the crypto economy was through the tools already available to them, bank and card transfers. Yet, the banks willing to get involved in this emerging and inherently risky economy were hard to come by. Regulations of cryptocurrencies were uncertain in a lot of jurisdictions, and payments over the blockchain were not well understood. We remember too well the times when crypto exchanges held their relationships with banks as a secret, as those relationships were their real competitive advantage. 

With time, some banks started embracing crypto payments. Payment processors working with Visa and Mastercard began offering their services to crypto exchanges. Yet, even now in 2019, this is slow progress. Each bank we partner with puts us through a careful evaluation process. Each payment processor we add for our users is a result of lengthy negotiations and counterparty risk assessments.

However, the difficulty of establishing relationships with banks and payment providers is not the only reason there are so few crypto exchanges, including CEX.IO, that can boast fiat processing capabilities. Processing fiat automatically subjects any company to a lot of regulatory requirements, and many exchanges simply do not want that. CEX.IO is the opposite. We welcome regulation and we’ve held ourselves to high standards from the very beginning. From FinCEN registration and audits for compliance with Money Service Business requirements in the US to strict KYC and AML procedures we maintain – all of these ensure we handle our clients’ funds in a secure way and can be accountable for it.

Only when you fully comprehend the complexities of fiat processing for a cryptocurrency exchange, you start appreciating it more. Any bank, even after thorough due diligence, can terminate their relationships with an exchange due to new regulatory requirements or issues with their corresponding banks. And so does any payment service provider. That means our fiat processing function can only be reliable when we have multiple battle-tested partners to cover every step of processing. Finding these partners and getting the best terms out of them was and remains a full-time job for the entire team at CEX.IO! And we’ve done a great progress in this direction so far.

Fiat payments for every need

CEX.IO embraces a diverse user base, not only in terms of geography but also in terms of their needs. Some users come to our platform to buy their first Bitcoin. Others deploy CEX.IO tools as part of a complex professional trading strategy. Naturally, what funds these users move and how they do it differs. Payment options available for our users cover every possible need. 

At CEX.IO, we offer both card and bank transfers for fiat deposits and withdrawals. Though for many people these seem similar, they differ quite a bit: which of our partners enable these payments, how fast they are processed, and what fees they carry.

Though more expensive, debit and credit card transfers have been historically more popular, compared to wire transfers, by the total amount of funds transferred by our users. No wonder, we were one of the first crypto exchanges that allowed buying cryptocurrencies with Visa and Mastercard! The dominance of cards illustrates well our initial focus on retail customers: they prefer simple user experience and want to move relatively small amounts of money, instantly.

As the crypto industry matures and our audience matures together with it, we get more users making larger crypto transactions and planning their transactions ahead of the time. For this, bank transfers present a better option. They take longer than cards, but they also have a higher chance of approval than cards. 

Although an explanation of payment options most appropriate for various transaction sizes merits a separate post, generally cards are best for small transfers and bank wires are perfect for large ones. The math is simple! A $30 payment (or something in the range) that your bank requires to process your same-day deposit to CEX.IO becomes reasonable when the amount you deposit is relatively large. Whereas a 2.99% commission, which CEX.IO charges for instant deposit via a card, is reasonable when the amount of deposit is small.  

Stronger partnership network – better payment terms

Back in the days, with only a few banking options available to us, a deposit of funds via bank transfer would likely mean an international money transfer via SWIFT. As a UK-based company, we had domestic EUR transfers, SEPA, but providing them on a stable basis became possible only in 2017 (remember the beginning of the post?). SEPA, a widely used payment method in Europe, allows to deposit and withdraw euros faster and cheaper. A SEPA transfer takes only a couple of hours (one banking day in rare cases) and costs as low as €1 regardless of the amount. Naturally, our customers loved this payment option a lot.

Since stabilization of our SEPA payments in 2017, their usage for deposits and withdrawals has grown from 27% to 84% in just two years, and it continues growing, as more customers find out about this method. 

Having implemented a convenient payment option for domestic EUR transfers, we wanted to enable domestic bank transfers for USD and GBP as well, so that even more customers could benefit from improved fiat payments. We went out to build banking and payment processing relationships in the US and UK respectively. Fast forward a lot of late nights and long negotiations, and we now have wire transfers and ACH for USD payments and FasterPayments for GBP. All methods were introduced in May 2019. And in June 2019, nearly 8% of all USD payments and 25% of all GBP payments have been processed using domestic bank transfersfor each currency respectively. We expect the adoption to grow even faster in months coming.   

To sum up, if you look at all the options, at the moment, you can choose from several types of bank transfers on CEX.IO:

  1. International bank transfer — worldwide SWIFT transfers;
  2. Domestic bank transfer:
  • SEPA for EEA countries (EUR);
  • ACH and domestic wires for the US (USD);
  • FasterPayments for UK (GBP). 

Thereby, each of the three most popular fiat currencies for CEX.IO users, EUR, USD, and GBP, now has a cheap, fast, and hassle-free method to deposit and withdraw funds to and from CEX.IO. And even that is not the end.

As we successfully process significant amounts of funds for our users, our existing bank partners trust us more and other banks want to work with us. And, since we proved ourselves to be a reliable counterparty, we are in the position to ask for better terms!

With that, here are the new deposit/withdrawal terms we are excited to offer to our users from July 11th: 

For SWIFT:

  • We decrease the minimum deposit and withdrawal from 1000 USD/EUR/GBP to 300 USD/EUR/GBP; 
  • We lower the withdrawal commission from 1% (but not lower than 50 USD/EUR/GBP) to 0.3% + 25 USD/EUR/GBP.
  • As usual, SWIFT deposits remain free at CEX.IO (your bank may charge separate fees – be sure to familiarize yourself with them).

For ACH, SEPA, and FasterPayments (domestic bank transfers in USD, EUR, and GBP respectively): 

  • We decrease the minimum deposit and withdrawal from 500 USD/EUR/GBP to 20 USD/EUR/GBP; 
  • We remove:
    • ACH withdrawal commission of 1% (but not less than 35 USD) and make ACH withdrawals free.
    • SEPA withdrawal commission of 1 EUR and make SEPA withdrawals free. 
    • FasterPayments withdrawals commission of 0.2% (but not more than 25 GBP) and make FasterPayments withdrawals free.

You read it correctly, lower limits, cheaper SWIFT withdrawals, and free ACH, SEPA, or FasterPayments withdrawals! Our finance team worked hard for it! The terms we earned and pass to our users are better than most of the other crypto exchanges can offer. These terms represent well a level of trust we’ve developed with our partners as well as demonstrate our passion with which we fight for the interests of our customers. 

When we define our role in crypto industry at large, we think about providing easy access to the open financial system to users across the globe. We can only be successful in this role, if our users can enter and exit cryptocurrency economy with tools familiar to them, cards and bank transfers, at reasonable prices. Looking at all the work we’ve done in fiat payments processing, we feel confident that we fulfill our role quite well!