Why are there commissions on the cryptoexchanges?

What are the main factors which impact the fees formation on the Deposits and Withdrawals of funds to/from the crypto-exchange?
Fees are an unfortunate but a necessary part of cryptocurrency trading, and it’s impossible to interact with a public blockchain without experiencing some sort of commissions. We will explain why do platforms charge transaction fees and why commissions are being changed from time to time.

The main factors that the EXMO platform considers in fees pricing:

  • fees that payment providers set for EXMO;
  • market conditions and liquidity on the platform.

Let’s take a closer look at each of these factors below:

1. The provider’s fees.

Since payment systems, that provide methods for depositing and withdrawing funds are aimed at the commercial success and profitability of their projects, they set fees, that the EXMO platform has to cover with its own commission. Consequently, the high fees in contrast to the opinion of some users are the burden of the payment systems and are not the “greed for profit” of the EXMO team. EXMO team is always in the process for onboarding new providers with lower fees.

2. The market conditions and liquidity.

There is a wide variety of payment methods available on the EXMO platform, with no established restrictions on Depositing through one method and Withdrawing only using the same method, sometimes aforementioned permission creates distortions in the liquidity in means of payment.

For instance: Let’s take an example:

The user №1 Deposited $100 through method A, after a while, he decided to Withdraw $ 100 through method B, which is more convenient and popular. Thus, the platform on the method A (less popular) remains + $ 100, and -100 $ on the method B (more popular).

In the case, when this scheme becomes massively used, a phenomenon called “liquidity imbalance” occurs, when there is an excess of funds on one method and a deficit on the other. EXMO has to adjust commissions fee (i.e. control demand) to reduce Deposits volume on method A and increase Deposits volume on method B, not to disable the availability of method B.

The concept of regulation of commissions for Deposits and Withdrawals of funds

The EXMO Exchange commission milestone level for user’s Deposits and Withdrawals is the following:

  • no more than 3% for all payment systems, and
  • no more than 4% for Visa/MasterCard cards.

EXMO team is planning a final transition to such commission fees in the second quarter of 2019. In fact, currently(February 2019), most of the available methods do already have commissions within 3% and 4% limits, and the remaining ones- are in the process of transition to the aforementioned level.


Let’s take an example of the CIS/European market

As at today, there is no platform providing users in the CIS / Europe such a wide range of diverse methods for Deposit and Withdrawal funds, like EXMO.

The closest pursuers are the Yobit and Livecoin platforms.

Let’s benchmark the fees on Deposits and Withdrawals for the most popular methods in RUB and USD:

RUB

We marked those methods in which EXMO is the absolute leader in the selected direction — bold.

As you can see, out of 11 selected methods of depositing and withdrawing funds in Russian rubles, EXMO provides the lowest commissions at 6 (6/11 = 55%).

USD

Don’t forget to register on EXMO and try our platform.


EXMO Infographic — Commission changes during last six months

One of our key targets for 2019 is reduced commission for the main payment systems. Here you can see the changes in the previous 6 months

Don’t forget to register on EXMO and try our platform.