Exploring Some Bitcoin Payment Processors and Clarifying their Operational Structure

My crypto currency strategy involves converting any winnings I amass from new online casinos to Bitcoin in particular, and then just letting that money sit there with the hope that it’ll result in value gains. I use certain payment processors, but do you know how these actually work?


Like the Finance Magnates exchange, this is another business that works as a payment processor – to buy and sell BTC directly. It operates in more countries, but this business is more similar to Finance Magnates in that it will allow you to sell bitcoin to them, and put it up for sale on other exchanges. Again, this is a business that will see more profits through its large client base. However, again, its commission fees are lower – usually around 1%, compared to the 2-3% commission fees at the Finance Magnates.


This is a more recent entrant in the BTC trading and exchange business. BuyaBitcoin has ambitions to be the leading European bitcoin exchange. Their business model is very similar to the rest of the wholesale exchange business – they will allow customers to sell bitcoins, and will then get channels access code, a commission fee, an exchange fee, and then they will also charge a risk premium to the client (about 5%) to cover any volatility in the market. For instance, if you sell 1 BTC for EUR 870, you will be charged 5% risk premium.

They will also charge a margin of about 2-5%, depending on the bitcoin price. They, like the others, sell your bitcoins for you, and will act as an intermediary on the network, i.e. they will not only act as the agent to the buyer, but also to the seller.

In summary, wholesale exchanges all have their advantages and disadvantages – in terms of their profitability – but ultimately the advantage is that they are able to process more transactions. However, retail bitcoin traders pay far higher transaction fees and often pass them onto the customers.

Retail brokerage

These companies sell bitcoin directly.

Bitwise XBT

This company deals with a lot of small to medium enterprises. They have over 5,000 clients in 120 countries, ranging from individuals to large business. These guys only accept fiat currency.


This company is the UK’s leading bitcoin payment processor. Their payment processor operates under their brand, (which they have owned for two years) in conjunction with ChannelCo Payments Ltd (a payments processor) and TradeLoop Solutions (a global bitcoin exchange).

In summary, with these companies, you will be selling bitcoin to a company that will then put it up for sale on another exchange, making a margin.

Non-bitcoin exchanges

In this category, you can also buy bitcoins in a number of ways – for example with an eWallet, or by paying with a debit card or your credit card, using a credit card or Paypal or any other credit card. These business-to-consumer (B2C) businesses are similar to the wholesale exchanges in that they only accept bitcoin. The major difference with B2C sales is that you are only buying bitcoin, whereas wholesale sales allow you to sell it on as well.


eWallet is a leading UK bitcoin-buying website. They work as an intermediary between you and the online shop that you are purchasing from. The terms and conditions you will be given will be quite similar to the wholesale exchanges: you will be charged 1% commission for each trade (although the commission fees are not set in stone), and if you don’t fulfil the order, then you will be charged a fee as well.

Ultimately, these companies are in the business of selling bitcoin to customers, charging negligible commission.