Bitcoin service provider Xapo has launched a new feature that enables users to purchase bitcoins directly from the company.
The company announced the new service, Xapo Deposit, via its blog earlier this week. According to Xapo, users can now send euro and US dollar payments via wire transfer and receive bitcoin in return.
Going full circle
Xapo’s blog post pointed to its bitcoin debit card, wallet and insured vault storage as evidence that it has “come full circle” in offering customers the ability to secure, transact and now acquire bitcoins.
Now that Xapo users can reload their accounts without much hassle, it is evident that the company is positioning itself as a one-stop service for bitcoin.
From start to finish, Xapo’s buying process takes just three steps. Firstly, a user must log in to their Xapo account and click the ‘deposit’ button on their wallet homepage.
Next, a page will open with all the relevant details for the wire transfer, including a personalised ‘Xapo reference code’. This identifier remains the same for the user’s future deposits and helps Xapo identify where funds have come from in order to send them to the correct account.
Once the wire transfer has been completed, the user will receive a confirmation email. Xapo claims the funds will arrive in their bitcoin account between two and five days later.
But who is behind this new functionality? CoinDesk’s tests of the service suggest that Fidor Bank has partnered with Xapo to enable the wire transfers, though Xapo representatives have been contacted to confirm this. Fidor is known for its cryptocurrency-friendly approach, recently becoming the first bank to integrate Ripple’s payment protocol.
Xapo will charge a fee of 1% for this conversion and adds that banks may charge additional fees to wire these funds. With regards to the conversion rate the service uses, Xapo’s website states:
“Deposits will be converted using market rates applicable at the time of the conversion (including any third-party fees we are required to pay, which will not exceed 0.3%). Xapo does not guarantee a particular conversion rate.”
Competing bitcoin on-ramp services
Xapo is not the only company with such aspirations. Coinbase and Circle offer similar services, although the Circle service is still in private beta.
In any case, both companies have a bitcoin on-ramp, but they use a different approach. Coinbase allows instant buys, but customers have to use a card and pay a fee. Circle does not, as its beta service employs Automated Clearing House (ACH) to handle transactions. The downside here is that the process can take a couple of days.
By contrast, Shanghai-based bitcoin exchange LakeBTC is taking an unconventional approach. The exchange is trying to eliminate costs and delays associated with international transfers by becoming a Ripple gateway.