Bitso is a Bitcoin exchange based in Mexico and focused on growing awareness and usage of Bitcoin within Mexico and other Spanish speaking countries. So far they’ve been very successful and have seen massive growth since launching in 2014.
What is Bitso?
Bitso describes itself as “the bridge to the new digital economy”, and has gained success in Mexico by offering the residents the ability to purchase Bitcoin using the Mexican Peso. This has been crucial over the past few years as Mexicans have seen the value of the Peso fall dramatically versus the U.S. Dollar. Because of the plummeting value of the Peso, many Mexicans have been searching for an alternative payment method, and Bitso has been there to help. Now Mexicans are discovering and flocking to Bitcoin in record numbers, and Bitso has been benefiting from that trend.
It isn’t just the depreciation of the Peso that has made Bitcoin so popular in Mexico. The country is home to roughly 120 million people, but 2/3 have no access to financial services. That means no credit, and not even a basic checking account. But, over 100 million people have cell phones, and most of those are smart phones, making a technological currency like Bitcoin far more accessible for Mexican residents. This has led to large scale adoption of Bitcoin over the past several years in Mexico.
And this has led to Bitso being the world’s largest exchange for buying and selling Bitcoin with Mexican Pesos (MXN). Since its launch as a Bitcoin exchange Bitso has also added support for Ethereum, Ripple and Litecoin, making the exchange even more attractive to users across Mexico and Latin America in general. Also helping the growth of the exchange is its complimentary service called BitsoPay, which is a payment platform that allows merchants to accept payments online, enabling Mexican e-commerce to flourish.
Bitso was started in 2014 by current CEO Pablo Gonzalez, CTO Ben Peters, and President Daniel Vogel. The stated goal of the trio was to introduce Mexican citizens to the potential offered by Bitcoin and other cryptocurrencies. The company is also committed to creating a stable financial services network in Mexico, something which has been lacking in most areas of the country historically.
Bitso Review: Features
There are many features that have been built into the Bitso platform to make it more attractive for Mexicans to participate in the 21st century digital economy. Here are some of the most prominent of those features:
Ease and Accessibility: In addition to accepting Mexican Pesos for payment, you can fund your Bitso account from any Oxxo or 7-Eleven outlet in Mexico. That gives potential users 135,000 locations all across Mexico where they can make deposits into their Bitso account.
Instant Funding and Withdrawals: Bitso users are able to send and receive funds between Bitso and their bank in just a single second, and completely free of fees.
Security: This is one of the most important features for any cryptocurrency exchange, and Bitso already follows “the best security practices and processes in the industry.”
APIs: Bitso comes with a complete set of APIs to allow third-party development of Bitcoin applications.
Multi-Signature: Bitso wallets have been created as multi-signature wallets to increase security for every users funds.
How to Open a Bitso Account
It’s not difficult or confusing to get started with Bitso. In fact, the process for opening an account can be completed online in just a few minutes. At the Bitso website you’ll see the link to register and after clicking that link all you’ll need to enter is your first and last names, a valid email address, your birthdate, your country of residence, and a cellphone number. The form will also ask if you are applying for a personal or business account.
You’ll find that there are three levels of verification at Bitso, and these determine the limits on your trading account. These verification levels are in place because Bitso follows international Know Your Customer (KYC) standards. This protects the exchange from fraudulent activity such as money laundering. The level requirements are as follows:
Level 1 – All accounts start at this level and it involves verifying your mobile number via SMS and receiving your userid to a valid email address.
Level 2 – To get level 2 verification you’re required to submit a passport and proof of residence by uploading them through Bitso’s verification system. It is recommended by Bitso that traders requesting this level of verification have processed a deposit via the SPEI transfer as well as having trading volume of at least MXN 5,000.
Level 3 – The steps involved with this level of verification require submitting a ticket through the Bitso Help Center to request Level 3 verification, after which detailed instructions will be emailed to the user.
BitsoPay is a merchant payment platform that allows members to accept Bitcoin payments with zero fees. BitsoPay allows you to accept Bitcoin at a physical retail location, or online through an ecommerce store. And once the Bitcoin payments are received they can immediately be converted to Mexican Pesos. The registration and setup process is simple, and merchants can be accepting payments within the same day.
There are great advantages for merchants using BitsoPay, such as 0% commissions, international payment acceptance, and the ability to get paid in the currency of choice, without having to worry about exchange rates. It also removes charge-back risk and allows for very fast payouts via the Mexican SPEI banking transfer system. The shopping cart interface was also designed very well, and is compatible with most every online ecommerce solutions.
If you have a physical retail location BitsoPay can be used via a tablet interface. This makes it a breeze to accept payments right at the checkout counter. And with BitsoPay Cashier merchants can accept Bitcoin using any internet connected tablet or smart phone (iOS and Android).
Bitso Review: Mobile App
Given that most users in Mexico are most likely to access Bitso on a smart phone or tablet, the rollout of the Bitso mobile app in February 2018 was a very big deal. The app offers the same functionality as the website, and is available for free on both iOS and Android.
According to the Bitso blog post introducing the mobile app, key features of the app include:
- Create your Bitso account
- Buy and sell Bitcoin, Ether, Ripple and other cryptos quickly
- Check your Bitso balances instantly and in one place
- Anchor your Bitso account with pesos and any other crypto available at bitso.com
- Withdraw funds to any bank account in Mexico or debit card via SPEI
- Send cryptos quickly using QR codes and your mobile’s camera
The platform also includes something called Bitso Transfer that allows users to transfer cryptocurrencies immediately, without the normal wait time associated with network delays, or the mining fees charged for Bitcoin transfers. Transfers can be sent to any mobile phone number or email address.
By downloading this app, users are able to create their Bitso account, buy and trade cryptocurrencies, check on their account balance, withdraw funds to their Mexican bank account, or use QR code fueled cryptocurrency transfers.
Bitso is also planning further features for the mobile app in the coming months, making even more useful and valuable to users.
Bitso Review: Fees/Commissions
Of course users have to deal with some fees when trading through Bitso. The exchange charges a variable fee that is based on users transaction volume over the prior 30 day period. The range begins at a high of 1% and drops as low as 0.1%. While these trading fees are quite high compared with industry averages, Bitso compensates for this by not charging deposit and withdrawal fees. So, any SPEI bank transfer is free of fees. This is ideal for those who use Bitso in a manner similar to a bank account, rather than as a trading account. There are also zero fees charged on deposits of Bitcoin, although withdrawals are charged a flat fee of 0.0005 BTC. Bitso instituted that flat fee in lieu of the mining fee back in late 2017 when mining fees were insanely volatile.
Bitso Review: Security and Support
Late 2017 also saw Bitso experiencing site performance issues. The company’s CEO was quick to take to their Medium blog to apologize to clients. The performance issue seems to have been an isolated incident related to a technical issue, and the company maintains that no client funds were ever at risk. And it is true that Bitso has never experienced a hack or loss of customer funds.
It is likely that the company’s claims that the issues were related to “bouts of downtime” and “periods of extremely heavy load” are true and correct as many cryptocurrency exchange suffered similar issues in late 2017. Many even suspended new registrations, but Bitso never had to take things that far. In fact, CTO Ben Peters promised a complete overhaul of the Bitso site architecture to avoid a reoccurence of such issues.
The exchange even admitted: “We still have a lot to improve in communication with our customers.”
As of June 2018 we aren’t aware of any upgrades that have been made to the site architecture, but it could be that any changes were made in the background, or it could be that the company is still working on upgrading.
Meanwhile, the Bitso Help Center promises a 24-48 hour response time to all tickets, although users have frequently complained in online forums that responses actually take longer than this when related to account verification questions and issues. This is actually a common concern at many exchanges, and I would just say that these verification issues show that the exchanges do take security seriously. Some more proactive communication might be appreciated by prospective customers however.
There’s no doubt that if you’re a Mexican resident looking to purchase Bitcoin with Mexican Pesos then Bitso is the place to go. It is striving to be so much more than just a trading platform, and has been ambitious in its efforts to also provide a merchant platform, and an alternative to the traditional banking system. With no hacks thus far, and the focus on customer service the exchange could go very far, and its extremely fast growth over the past two years shows that its base of Mexican customers have been very appreciative of the service being offered.
The fee structure for trading seems to punish the infrequent trader, but considering the makeup of the customer base, and the services being offered by Bitso I don’t feel as if this is an exchange where users are too concerned with trading. This is interesting because it means the Mexican customer base may be using Bitcoin as Satoshi intended – like a currency and medium of exchange.
If future plans include the addition of more cryptocurrencies I could see trading really taking off at Bitso, but with a limited number of cryptocurrencies available its more likely that users will continue to see Bitso as a banking alternative, which is not necessarily a bad thing.