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Even though the most popular payment method for cryptocurrency is by credit card, new bank transfer options offer some benefits that may shake the strong position of card processing.

Starting August 2018, clients of the London-based cryptocurrency exchange CEX.IO received the opportunity to deposit and withdraw fiat currencies through their bank accounts. Improved wire transfer service comes with shortened processing times and commission-free deposits in USD, EUR, and GBP.

In addition to more attractive fees for bank transfers compared to credit card deposits, some crypto exchanges, including CEX.IO, offer special deposit bonuses to clients. For example, on CEX.IO those who deposit from 3,000 to 9,999 USD/EUR/GBP gets a bonus of 1% of the amount in the deposited currency. And users who deposit over 10,000 USD/EUR/GBP get a 0% trading fee for 30 days. If clients make deposits to CEX.IO both in August and September, they get a 1% bonus per each month or double the days with no trading fee.

After the premiere month of relaunched bank transfers featured with a special offer, CEX.IO clients asked for prolongation of this activity. Is this a sign of a new trend, and wire transfers drive out card processing for crypto? To answer this question, here is a simple analysis of the pros and cons of credit card and bank transfer payment options for fiat transactions.

Price. Bank transfers are cheaper than credit card payments, especially when making cross-border transactions. For card operations, the client usually has to pay a higher commission and assume the risk of a less advantageous exchange rate. For example, on the CEX.IO exchange, users pay up to 3.5% commission for Visa and Mastercard payments but no commission for bank transfers (during August and September).

Time. Credit card payments are usually the fastest way to transfer money, despite the higher fees. Sending a wire transfer consists of a few steps including verification, anti-fraud clearance, and internal bank processing, which makes it a slow option. However, with the right setup wire transfers may take just one day.

Limits. Depositing with a credit card usually limits the amount of each transaction and comes with daily/monthly limits imposed by payment systems such as Visa and Mastercard. With wire transfers, you’re only limited by the rules of the particular cryptocurrency exchange (i.e. verification and anti-fraud policies).

Security. Both credit card and wire transfer deposits offer the highest security standards for crypto traders. The Payment Card Industry Data Security Standard (PCI DSS) is an information security standard for companies (including crypto exchanges) that protects credit cards from major threats. PCI DSS compliance is mandatory for processing card data. At the same time, wire transfers are also completely secure with a developed verification system that adheres to AML and KYC policies, such as that used by mature crypto exchanges including CEX.IO.

With equal security, the choice between wire transfers and credit card payments is personal. Each client has their own preferences based on key criteria, be that price or timing. Also, a crypto exchange may create the best possible conditions for its own clients, aiming to deliver the best user experience.

To be confident in the best quality of wire transfer service, the crypto exchange should have a top-notch reputation, stable deposit and withdrawal operations, responsive Customer Care, and strong data protection in compliance with GDPR.

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