Crypto vs Traditional Banking – Why Casino Players Are Switching

To paint a clear picture in the case of crypto vs traditional currency, and to discover whether crypto is actually more cost-efficient than traditional fiat banking methods, in this section, we’ll weigh the costs of traditional banking fees and e-wallets on the fiat side of the market against the costs of blockchain-based crypto transactions.

Crypto vs Traditional banking

Using a bank account is admittedly convenient, but banks don’t just keep their customers’ money for free, which is one of the key topics that has sparked the crypto vs banks conversation. Yes, they offer a store for people’s money, which is ‘free’ and access to ‘free’ internet banking. However, behind the scenes, there are fees for using a bank account and, in some cases, annual charges. Let’s take a look at some of these added costs.

• ATM Withdrawal Fees: Many banks charge a processing fee when customer use their card to withdraw from an ATM operated by another bank. These fees can range from $2.50 to $5 per transaction. If we add free ATM withdrawals overseas, that figure can rise to $5–$10 + a 1–3% currency conversion fee.
• Account Maintenance Fees: Although not common across all banks, many charge them. It can be an annual fee for the privilege of having a bank account or, in some cases, an annual ATM card fee. Admittedly, the fees are not bank-breaking, but paying $2.50–$10 per month or $250–$100 per year is something most people would like to avoid.
• Borderless Transaction Fees: There is no way to avoid crypto transaction fees when making payments or transferring funds across currencies. Just sending money overseas can cost $30–$50, while on the other end of the transaction, the receiving bank may take its cut with an added correspondent bank charge of $10–$30, plus exchange rates to consider.
• Overdraft & NSF (Non-Sufficient Funds) Fees: Ever wondered why banks allow their clientele to withdraw more than they have available in their balance? It’s because of overdraft fees, another money spinner for banks. Even if it’s just a few cents into the red, it’s the perfect excuse for the bank’s automated system to make deductions the next time the account goes into the green. Depending on the bank and country, fees can range from $5 to $25 in some cases.
• Hidden or Less Discussed Fees: There are also fees that appear unexpectedly. The ones buried deep inside the small print of the T&Cs most people don’t bother to quint their eyes to read in detail. These can be an inactivity fee, often $5–$15 per month, or, worst still, a fee for having the audacity to ask for a paper statement, costing $1-$5 per statement depending on how far back the statements go.
• SWIFT Fees: The one that gets most people’s backs up is SWIFT fees, and this is where cryptos like XRP (Ripple) could become the gold standard for banking transactions in the future, thanks to their lower fees, especially considering current SWIFT fees are $10–$30+ per transfer these days!

To highlight the fiat currency banking fees just outlined above, here’s a table to help glean how much it costs to use a ‘free’ bank account service. 

It’s clear from this table that these fees, over the course of a year, can add up quickly. If we compare transactions using the crypto vs. banks comparison, cryptocurrency is not associated with the same costs.

Next up is the topic of e-wallets and the fees associated with these ‘free’ and convenient online financial tools, before stepping into the world of cryptocurrency.

E-Wallet Costs?

In the quest to discover whether crypto is more cost-efficient than fiat currency, and why more casino players are switching to digital crypto payments in the modern fiat crypto battle, e-wallets are the topic for discussion. The key question here is which fees apply to e-wallet transactions, which are often considered the best alternative gateway for international transactions compared to a traditional bank account.

• Sending Fees: Some wallets charge a percentage fee when sending money to another user, especially if a card is used to fund the transfer. However, if the sender isn’t paying a fee, then the receiver is. The service fee usually ranges from 1% to 3%.
• Receiving Fees: There is often no avoiding a percentage fee for receiving money into an e-wallet. That is, unless the sender is using the same e-wallet and opted to pay the fee. Fees are pretty much in line with sending fees, costing the receiver 1% to 3%, though it’s generally on the higher end at 3%.
• Below Average Currency Conversion Fees: The intro to this e-wallet fees overview says e-wallets are ‘the best alternative gateway for international transactions compared to a traditional bank account’. One major selling point is that, via e-wallets, users can exchange currencies and keep balances in multiple currencies. The catch is that e-wallets often offer exchange (FX) rates way below average, even compared to banks. Often, there is a 3-4% currency conversion markup.

E-wallets are popular because they’re fast, easy to use, and accepted almost everywhere. Yet, it’s clear that convenience comes with its own set of fees that most people don’t notice until they add up. The trade-off is that micro-fees stack up. Each transfer, currency swap, or withdrawal chips away at the holder’s balance. For people who frequently transact across borders or deal with multiple currencies, e-wallets can end up more expensive than they look on the surface.

Blockchain & Crypto Transaction Costs – Crypto vs Banks Comparison

The crypto vs traditional banking comparison gets interesting when comparing crypto transaction fees with e-wallet and banking fees in the table above. Blockchain and crypto transactions are well-known for being more cost-effective, and here are some reasons why so many people make this bold claim. 

To show that, in real-world use, crypto can compare favorably with traditional methods for international transfers, the table below compares sending $500 internationally via USDT, Bitcoin, Bank Wire, and e-Wallet, which 

Crypto Transaction Fee Across Major Bitcoin Networks

The trick to paying the least when transacting is to find a coin with a low crypto transaction fee. If speed is also important, then it’s a case of weighing up cost Vs speed for convenience.

• Bitcoin (BTC): transactions typically range from $1 to $15, depending on network activity. The higher-end fee applies only when the network is busy.
• Ethereum (ETH): One of the most unpredictable networks when it comes to fees, because they can swing from $2, while in periods of high demand, they can swing as high as  $50. Therefore, it’s not the go-to crypto for low-cost transactions per se.
• Stablecoins (USDT): Usually, the cheapest and most convenient way to transact is with USDT, as fees are predictable. TRC-20 in particular usually charges just $1 per transaction, while ERC-20 relies on the Ethereum network and can cost $5 to $15.
• Ripple (XRP): One of the fastest and also lowest-cost networks in the crypto world. Transactions on the XRP blockchain ecosystem are untraceable and arrive instantly in the receiver’s wallet.
• Solana (SOL): Like XRP, Solana is another cost-effective crypto solution gaining popularity. It costs around $0.0001–$0.0003, on average, and the transaction completes in seconds.

Clearly, there are many more cryptocurrencies out there to consider, and these few coins are just the icing on the cake. Most notably, stablecoins are popular because they have no price fluctuations as they are pegged 1:1 to the US Dollar, and fees and transaction speeds are more than acceptable. However, the clear winners in terms of cost-effectiveness and speed are XRP and SOL.

Why More Players Are Switching to Crypto

In the crypto vs traditional banking debate, a key point is that more players are switching to crypto due to lower fees, easier cross-border transactions, and faster processing times. However, it is the key cost benefits that attract most people to crypto Vs fiat currency, and here are some of the reasons why:

• No Wallet Fees: Unlike some banks, there are no wallet fees. Anyone can hold their crypto for as long as they like, and there’s no risk of an overdraft, no ATM fees, no subscription fees and no inactivity fees.
• Same Day Transactions: Transactions using cryptos such as SOL and XRP are instant, while sending USDT or USDC typically takes 1 to 10 minutes, depending on the network. Even slower cryptos like Bitcoin, which can take up to 20 minutes to complete, arrive on the same day. On the other hand, some banks take 3 to 7 days to clear a transaction, especially for cross-border payments.
• No Distinction Between Domestic and International: In traditional banking, sending money abroad costs significantly more than domestic transfers. With crypto, there’s no such distinction; every transaction has the same low fee structure regardless of distance.
• Low-cost Borderless Payments: Sending $500 or €500 to an exchange may cost $1-$5 or less via XRP or SOL. A second transaction is needed to send the crypto directly to another wallet, whose owner can be anywhere in the world, for an additional $1 to $5. The total cost can be as low $2 to $10.

Cryptocurrency Volatility Risk

There is almost no contest when comparing crypto fees with banking and e-wallet fees. Of course, there are some risks to weigh up. Firstly, when holding any cryptocurrency, its price volatility relative to FX exchange rates adds more risk because it is far higher. Yet holding USDT curtails that risk, as it has extremely low volatility. As a result, holders can easily convert USDT to SOL, XRP, or BTC and then process the transaction. The same applies vice versa.

Self-Custody Versus Non-Custodial Storage

One of the best approaches recommended by almost all cryptocurrency experts is to use a hybrid of wallet types to hold crypto. 

• Self-custody Wallet: As long as you keep your seed phrase, only you control access to your wallet, thereby considerably reducing the risk of cryptocurrency criminals hacking it. On the other hand, if you use a custodial wallet, you are relying on a third party to store your cryptocurrency. There is a risk that the wallet could be hacked from within the company, storing your crypto, while 
• Non-custodial: A non-custodial wallet means you don’t need to remember or store your seed phrase to access your wallet. You’ll just need a username and password on a site like Crypto.com or Binance that gives you access to a wallet where you can store crypto. The disadvantage of using non-custodial wallets is that your wallet is more vulnerable to hacking attempts, but with that said, if you stick with a reputable crypto wallet provider, there is a low chance of a cyber attack affecting you.

How is crypto different from traditional banking?

The differences when comparing crypto Vs traditional banking come down to cost, speed, and control. 

Most banks tend to charge fees for each use case, such as account maintenance, ATM withdrawals, overdrafts and SWIFT transfers. Also, one of the key factors in the crypto vs banks debate is that banks treat international payments as a premium service, whereas cryptos are seen as borderless. All in all, cryptocurrency strips out most of the charges associated with traditional banking by charging a single transparent fee per transaction, regardless of where the funds go.

Here’s a comparison table to give you a clear view of how crypto is different from traditional banking:

Summing Up Crypto vs Traditional Currency

We think it’s fair to say that in the crypto vs traditional currency debate, cryptocurrency compares favorably to traditional payment methods for certain transactions, particularly international transfers. As our testing shows, the fee structure can save you considerable amounts over time, while speed is consistently at the top end of what’s available.

That’s only half the story, though. The key is making an informed choice based on your specific needs. In real-life use, we find it’s worth comparing fees, transfer speeds, and overall convenience before committing to one method over another. Different scenarios call for different approaches.

If you’re looking for lower transaction costs and faster transfers, crypto produces them by quite some distance. But there’s scope to use multiple payment methods depending on the situation.

Ready to see if crypto can save you money? Compare platforms and start sending payments with lower fees today!