Without naming names, Youssef told Decrypt that “smaller, entrepreneurial financial institutions” were responsible for a 70 percent surge in bank transfers on Paxful’s platform in July. In fact, between June and July, bank transfers on Paxful jumped from about $4 million to over $7 million in volume, according to a report from the company.
Paxful is primarily a peer-to-peer Bitcoin marketplace, but it also offers several other payment forms including standard bank transfers. According to the company’s report, about four percent of Paxful transactions occur via bank transfers, and more than 100,000 trades were conducted using the bank transfer payment method in July, while the average trade was equal to about $100 USD.
Paxful has been busy expanding its global footprint as of late, expanding into Latin America and parts of Africa. In Nigeria, for example, bank transfers on Paxful went up roughly 46 percent, the report stated, while South Africa saw a 669 percent increase. It was Indonesia, however, that experienced the largest surge—a whopping 2,500 percent, according to the report.
“For countries like Indonesia and India, Paxful offers them the freedom of options that most centralized exchanges don’t,” Youssef said. “The normalization of crypto and the remittance market is also a factor that has led to this growth.”
Youssef added that the fee for bank transfers has dropped from about one percent to 0.1 percent, which may be another contributing element. Customers are always looking to save money and take advantage of smaller fees.
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“For the sellers, the 0.1 percent fee and our [know-your-customer] verification system helps them be more secure,” he explained. “For the buyers, bank transfers have the most competitive rates in the marketplace. It is more-or-less instant and convenient, especially if the seller has the same bank as you.”
Youssef claimed that institutional players now make up a healthy portion of Paxful customers, many of whom are looking to take advantage of the company’s offerings to grow their businesses.
Aside from bank transfer activity, Youssef explained that the platform has witnessed heavy bursts in peer-to-peer crypto trades as well. The company initially began as a way for bitcoin enthusiasts to trade, buy and sell Bitcoin privately, and Youssef said many other factors are adding to this upsurge as well.
“Political events like trade wars may also be a contributing factor to increased volume, as more people buy bitcoin to preserve the value of their wealth,” he said. “Just recently, the Argentine peso dropped by over 30 percent in value, which may have had a similar effect.”