There are plenty of cryptocurrency critics stating that Bitcoin is too expensive for transactions. Now we have data from Bank of America (BOA). It shows that traditional money transfer cost 6,000 times more in fees than Bitcoin.
Let’s take a $90,000 transfer as an example. It will cost $45 with a bank and 75 cents with Bitcoin.
BoA uses the Fedwire network, a federal reserve’s money transfer network, and it charges them up to 83 cents to process a transaction. On the other hand, according to recent figures, BoA allow themselves to charge their customers up to $45 for the same service.
The fees of Fedwire vary. They depend on the size of the payment and it checks whether the payment is qualified for an “Incentive” fee. It’s described as “transfers that exceed 60% of a customer’s historic benchmark volume.”
So, Fedwire can allow charging as low as $0.032 for a transaction that qualifies as an “incentive” even if it’s worth over $90k.
But the reality is not the same paper-perfect story. BoA charges at least $30 per transaction. This means that their minimum profit margin is 87%. Also, they have imperfect exchange rates for foreign transfers and this increases fees even more.
Bitcoin, on the other hand, takes transactions to a whole new level. Earn.com recommends a fee of 8 satoshis per byte. This is roughly around 75 cents for the same $90,000 transfer.
The complaints about Bitcoin being too expensive in transaction fees still remain. Actually, the average cost of fees decreased significantly in 2018 dropping to record lows.
Businesses that refused to support SegWit, a protocol for faster and quicker transactions, suffered by losing clients.