Currency exchange has always been considered a very profitable business. To be convinced of this, just look at the number of “underground” money changers in the markets. And the number of exchange points is growing exponentially.
The history of currency exchangers dates back to the times of the USSR, when all transactions with currency were held in great secrecy, and for illegal transactions with “overseas” money you could go to prison. Immediately after the collapse of the Union, the exchange business was legalized, because most citizens of the Russian Federation were able to travel outside the country. In order not to waste nerves and time on exchanging funds abroad, many residents of the Russian Federation tried to change money before leaving. The currency has also become popular as a store of capital. We all know the result - increased demand led to the emergence of the first exchange offices.
Functions, pros and cons of the exchange office
Modern exchange offices conduct the following activities :
Buy foreign currency from individuals (non-residents and residents);
- sell foreign currency to individuals (usually residents);
- carry out reverse currency exchange from national to foreign (for non-resident individuals, taking into account established rules and regulations;
- carry out converted transactions with foreign currency;
- exchange banknotes of one country's currency.
Pros of opening a currency exchange office:
Fast payback;
- maximum simplicity from a technical and organizational point of view;
- the possibility of expanding activities and increasing profits by opening new currency exchange points.
Disadvantages of opening a currency exchange office:
Large investments, which are caused by the need to prepare documents and organize reliable protection of the exchange office;
- high level of competition (especially in big cities);
- difficulties in finding a visible and profitable place to open a business.
The main risks of opening an exchange office:
High risk of theft of funds by staff;
- the likelihood of losing a license due to violation of operating conditions;
- the danger of robbery due to the low level of security (this is why it is not recommended to save on this aspect);
- frequent inspections by a representative of the Central Bank and the Department of Economic Crimes.
How to register a currency exchange office?
The main problem with this type of business is the design. According to the laws of the Russian Federation, only a bank (credit organization) has the right to organize an exchange office. The procedure for opening such a business is carried out taking into account two documents:
Federal Law of Russia “On the Central Bank of the Russian Federation”;
- Federal Law of Russia “On Currency Regulation and Currency Control”.
Thus, the Central Bank of the Russian Federation independently regulates the processes of opening currency exchange offices, completing their activities, organizing work, as well as the list of permissible operations and other transactions using national and foreign currencies with the participation of individuals.
A private individual has access to this type of business only if an employment relationship with a financial and credit structure is officially formalized. Banks that have the right to open exchange offices issue licenses to individuals. After this, newly minted entrepreneurs have the right to open a currency exchange office. The advantage is that the issuance of licenses has recently become available even to small banking institutions.
How to proceed? To start an exchange business, you need to get a job in a banking institution and take the position of manager or manager of a currency exchange office. Next, an application is submitted to the banking institution to open an exchange office. The following documents will be needed here:
Employment agreement with a banking institution;
An agreement confirming the opening of an exchange office;
- a list of the bank’s requirements for its partner (following the instructions of the Central Bank of the Russian Federation, timely submission of reports, payment of commissions once a month, and so on).
In turn, the entrepreneur takes on the following issues: :
Finding a suitable office for an exchange office and arranging its lease;
- selection of equipment for the premises and its installation;
- searching for suitable employees and resolving issues regarding their employment.
In practice, the relationship between a banking institution and the owner of an exchange office can be organized in different ways. For example, the bank itself can search for premises and arrange for sublease. At the same time, the owner of the exchanger makes payments once a month for collection, packaging of cash, their recalculation, software maintenance, and so on. Total payments can be 40-60 thousand rubles. In addition, you will have to transfer 50-60 thousand rubles to the bank for servicing the cash register.
During the period of operation of the exchange office, the partner bank is engaged in generating reports, making tax payments, and so on. If the owner has violated the requirements of the agreement, the bank has the right to close the exchange office by notifying the Central Bank of the Russian Federation. If problems arise with the bank itself (for example, it was deprived of its license), then it is not necessary to close the exchanger - you can contact another banking institution.
How to choose a room for a currency exchange office?
It is best to place an exchange office in a crowded place where there will always be customers. For example, it could be a train station, bus station, business district, market, and so on. The exchange process itself largely depends on the location of the point. For example, if an exchange office is open in a residential area, then a popular conversion will be the exchange from ruble to foreign currency. If the exchanger is placed in a shopping business center, then the process will be reversed.
When choosing a place for premises, you should focus on the presence of competitors in the nearest areas, their exchange rates and popularity. If there are other exchange offices in the area, it is easier to figure out which currency is most in demand and what to focus on during the first time of work. If the rate of a particular currency in an existing exchanger is too high, then the offered currency is simply not in demand.
After choosing an office, a lease is issued. The legal entity of the partner bank acts as the tenant. To conduct normal activities, the area of the exchange office must be 6 thousand square meters or more. Mandatory requirements are the presence of an armored door, the same windows and walls. Fire and security alarms must also be provided. Ready-made booths can be sold ready-made - their price ranges from 150 thousand rubles and above.
What equipment to buy for an exchange office?
The basic equipment, which you can’t do without even at first, includes:
Currency detectors (check cash for counterfeiting);
- safes (for storing money);
- cash counters;
- a computer with software whose task is to control the movement of money. As a rule, the supervising bank acts as the software supplier.
It is important to take into account a number of other requirements of the Bank of Russia, according to which the exchange office stand must have:
Information regarding the telephone number and address of the authorized banking institution that opened the exchange office;
Data on the exchange rates of those currencies that can be exchanged at a given time;
List of operations that the exchange office can perform (with currency and national money);
Operating mode of the exchange office. As a rule, the operating hours of the exchange office coincide with the operating hours of the banking institution (operating day). There are exchange offices that operate around the clock;
An extract showing the commissions of the partner bank for conducting cash transactions;
A standard book for consumers where you can leave your complaints and suggestions;
Rules for the exchange (acceptance) of damaged banknotes and other documents.
How many staff will be needed to operate the exchange office?
For one exchange office, two cashiers are enough. The work schedule is every other day or every other day. At the same time, it will not be possible to directly register new employees at a currency exchange office. All employees must obtain an official position as a currency exchange manager or bank teller.
The main problem of all exchange offices is theft by staff. When a client hands over any money in foreign currency, the cashier can keep the difference from the exchange. As practice shows, there is little trust in this type of business. So at first, the ideal cashier is the owner himself. But, of course, you won’t be able to work like this for long.
An important issue is the control of cashiers who work 12-18 hours and pass large cash flows through themselves. There are two ways to do this:
Install a video surveillance system;
- make test purchases.
In practice, both of the above options work poorly, because it is impossible to watch 12-18 hours of video, and catching a neat cashier in deception is a very difficult task. It is easier to set a limit on the daily earnings that an employee must hand over. The rest is his income. To determine the average amount of daily revenue, the owner himself sits in the cashier’s place and works for several days.
Profit of a currency exchange office
The main income of an exchange office is the spread (the difference between the sale and purchase of currency). In addition to this amount, the exchange office may impose additional commissions. As for the rates, the exchanger sets them independently, taking into account current supply/demand. At the same time, for normal operation, the point’s cash desk must have cash for the purchase and sale of various currencies.
The bank administration has the right to control the work of the exchange office and make adjustments to its activities. If you deviate from the rules, the bank may issue a warning or close the point altogether.
With proper business organization, the annual earnings of an exchange office can reach 3-3.6 million rubles. All this money is the owner’s net income. They must be at the exchange office and cannot be collected.
Who checks the currency exchange office?
Owners of exchange offices need to be afraid of three main authorities:
Central Bank of the Russian Federation;
- OBEP (department for combating economic crimes);
- tax service.
Most often, the inspection is carried out on the first day of activity. The main attention is paid to compliance with all rules and regulations (mentioned above), the presence of panic buttons, reliability, notification functions and the presence of an alarm.
The risks associated with inspections of the Central Bank and the Department of Economic Crimes can be reduced. All that is required is to conduct honest business, avoid fraudulent transactions, and clearly declare the exchange rate. If you comply with all the requirements of OBEP, then there will be no problems with the partner bank and the Central Bank. The only downside is that doing business honestly inevitably leads to additional costs. On average, this is 5% plus taxes on income reflected in the documents.
How much money is needed to open a currency exchange office?
When organizing such a business, two main types of costs can be distinguished:
1. One-time expenses:
Purchase of equipment (safe, PC, software, telephone line, detector, etc.) - from 200 thousand rubles;
- organizing a work cubicle - from 250 thousand rubles;
- installation of video surveillance, alarm systems, access control systems (access control systems) - from 150 thousand rubles;
- personal funds for turnover - from 1.2 million rubles.
Total - from 1.8 million rubles.
2. Monthly expenses:
Commission to the curator bank - from 50 thousand rubles;
- rent for premises - from 30 thousand rubles;
- salary of two cashiers with taxes - from 30 thousand rubles;
- payment for security services - from 50 thousand rubles.
Total - from 160 thousand rubles.
With an average monthly income of 250-300 thousand rubles, the costs of organizing an exchange office can be recouped within a year.
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Currency exchange as a business idea
- Hello! You are such a young guy, but you have already found a way to make money exchanging currencies on the Internet. Tell us the story of creating your business, where did you start, what mistakes were there?
Hello! You definitely noticed about youth; I will only reach adulthood next year. This is my very first project. I had never been involved with any type of business before, but the idea of creating it appeared suddenly.
— And yet, how exactly did such an idea come about?
I had small savings. I wanted to invest money in some event to increase my capital. I started investing through exchanges. In general, everything was quite successful. But sometimes there were situations when it was necessary to very quickly withdraw funds from accounts to crypto. I did a little research and realized that 10% is the minimum rate of the exchange rate, and this is not very profitable. In addition, most exchangers operate manually through instant messengers; you had to wait several hours for a response from operators.
Exchangers located on websites often call numbers to verify documents, and this is very annoying. I do not recommend using your personal number for work! In general, I concluded that it is easier to create your own business plan for a cryptocurrency exchanger. The service will include blackjack and bitcoins. This will allow me to avoid all checks and make a more acceptable course. I wanted to receive a large number of applications at a lower percentage of profit for them.
Start-up investments in a currency exchange business
— What was your starting capital?
To make money from exchanging currencies on the Internet, I needed $1,500. At that time, I had all the electronic wallets prepared, as well as the server where I decided to install the exchanger. But this is not the minimum cost; you can start with less capital, gradually increasing your turnover.
— What important points can you highlight in building this business?
What I didn't do at the very beginning was take care of the advertising campaign. As soon as I launched the exchanger into the working process, I waited for requests, updating the service every 5 minutes. Without proper advertising, achieving any result turned out to be problematic. Only two weeks later I received my first application - the result of topics posted on bitcoin forums. I decided that things wouldn’t work that way, and started spamming everything I could: exchanges, currency trading forums and various services.
Difficulties in starting a foreign exchange business
— What problems accompanied the creation of the exchanger?
I'll list everything in order. There are 3 main points that make it difficult to conduct a foreign exchange business:
- Creating a cryptocurrency exchanger is only half the battle. In order for it to generate income, you need to promote it. I hardly invested in advertising. I bought several banners and displayed exchanger themes. There were not many visitors due to such manipulations.
- The manual mode of operation of the exchanger is quite problematic. Our exchanger works from 6 am to 12 midnight, and it is not always possible to be in business. The automated operation of an exchanger is very dangerous. There are fraudulent schemes that can cause you to lose all your money. Even large projects are not immune from this. If a fraudster manages to gain access to the admin panel in my exchanger, then he will not be able to penetrate the wallet. Therefore, a manual exchanger is safer.
- To make money on electronic wallets, at the first stage all applications will have to be processed independently. From my own sad experience, I was convinced that without 100% trust it is impossible to hire an operator. During the first month, I serviced all requests myself. Then I could still cope with such a task, since there were not very many of them. Then he finally took the risk of hiring a cameraman. It turned out to be a guy I knew who was complaining about the lack of work. He served applications for about 2 months for a nominal fee. He contacted me only to find out the codes for SMS confirmations.
While he worked, the amounts gradually increased. At one point, the guy cut off 8 bitcoins from me (at that time it was 280 k). I lost more than 50% of my total turnover and lost the partner I considered one. I didn't make such mistakes again. He hired a close friend to work with him, but retained control of all funds. The wallets contain small amounts (on average 2-5 k), and if they tell me that there is not enough or unforeseen circumstances have arisen, I am not lazy, I check everything myself and top up the account.
Exchanger client base
— Now there are a lot of exchangers. How do you plan to expand your customer base?
Great question! Everything turned out very interesting here. At first, I planned to create income by exchanging bitcoins. The strategy involved advertising on crypto forums, posting topics, etc. Then everything changed dramatically.
While wandering through the onion nets, I came across a very popular large drug forum. There I saw an inscription in large letters, which stated that all operations are carried out only through Bitcoin. I became interested and started reading. My surprise knew no bounds when I saw that my exchanger was one of the trusted ones and was recommended. I began to study further and found about 20 reviews. I actually didn’t expect an audience, so I was very happy. At that time I already had about 2 completed applications, and there were only 10 reviews on all forums. I didn’t understand why people didn’t leave reviews, and then it dawned on me. The exchanger has a completely different audience. My further research led me to the conclusion that more than 80% of users received information about the exchanger from onion networks. I didn’t post the topics there, but that’s for personal reasons.
How to promote your exchanger to the top
Use left courses. Internal commission is not taken into account by bestchange. Let's consider exchanging Yandex money for qiwi. There is an option in which 1 unit of Yandex money is 1.02 qiwi (conditional example). When submitting an application at the very last moment, we learn that we also need to pay an internal commission of 0.5 units. And this is no longer profitable at all. There are countless such exchangers. I don’t know whether the administration is taking measures to combat them. But the fact is that people come.
— If you create your own electronic currency exchanger, what kind of profit can you expect? What will the costs be?
In this niche, income consists only of percentages of turnover, so it is different in each specific case. I will leave my numbers secret, I will only say that using the method of semi-passive income I have 1000 dollars a month. The costs are only associated with advertising, and where and how to use it is up to you.
Is it necessary to register an exchange business?
— Does making money from exchanging cryptocurrencies imply registration of activities through legislation? Do I need to pay taxes?
To be honest, I am not competent in this matter. I myself have never paid taxes; the company is not officially registered. All servers are located outside the territory of the Russian Federation, operations are carried out under the same conditions. It may be necessary to register, but I have not encountered such requirements.
— Can this business be considered as an additional source of passive income if there is free money? Or does this niche require a lot of attention?
Each exchanger has a different control system. I think it is quite possible to use your own business model. The niche that I am associated with has a narrow focus. But there are many exchangers that do not work with crypto. The more competition, the more offers, so you can try.
Since 2017, cryptocurrencies have captured the minds of many people. The increase in the value of some coins by tens and hundreds of times compared to January last year has switched the attention of many people to cryptocurrencies as a source of income, much more profitable than traditional ways of generating income on the Internet.
You can make money on cryptocurrencies in several ways: simply buy some cryptocurrency and wait for it to rise in price (“hodling”). You can “mine” (extract) one or more cryptocurrencies using powerful video cards or specialized devices (ASIC). You can buy cloud mining power or invest in a cryptocurrency fund. You can risk your money in cryptocurrency HYIPs.
One of the possible ways to earn money could be opening a cryptocurrency exchanger. Now many people are wondering:how to open your own cryptocurrency exchanger?Let's try to answer this question.
Why is it worth creating an online cryptocurrency exchanger?
When the need arose to exchange fiat money for cryptocurrencies, exchange offices and exchanges appeared.
Creating a cryptocurrency exchange is quite a long and troublesome task. Unless you plan to exchange billions of dollars every day and have a huge staff to maintain the exchange, forget about this option. Creating a cryptocurrency exchange is quite an expensive proposition and not suitable for the average enthusiast. Createonline cryptocurrency exchangermuch simpler, but this simplicity also has its downside.
In most countries of the world, there is currently no legislation regulating the circulation of cryptocurrency assets. Obviously, they are not going to ban the circulation of digital assets in our country, but they will regulate this market. It is still unclear how this will affect exchangers.
How to create a cryptocurrency exchanger: buy a ready-made one or write it “from scratch”?
There are two technical ways to create a private cryptocurrency exchange office. The first way is to write the exchange office code from scratch. For these purposes, you will need a qualified programmer who understands how the cryptocurrency market functions. Such development will cost a lot (from a few to tens of thousands of dollars) and will take a lot of time. As a result, you will have an original design of the exchange office (which users will immediately note) and a system built to suit your needs. What you put into the project is what you will get, since the code will be written according to your wishes (more precisely, according to the interests of clients, as described below). This path allows you to create flexible functionality of the exchange office, which can be changed when external conditions change.
The second way is to purchase a ready-made exchange office template. It will cost less (online amounts are quoted as no more than $5,000), but will have a standard, recognizable design (which its users will also immediately note). The second way is shorter (you just need to buy a script and configure it), but such an exchange office will not have flexibility, since you will not be able to change the script yourself. Accordingly, the functionality of the exchange office will be limited to what the script developer has included in it. Places where you can buy a ready-made exchange office script can be found on the forums of crypto enthusiasts.
How to open your own cryptocurrency exchanger taking into account the interests of clients
Exchange offices earn from commissions. The usual figure now is 1-5% of the amount exchanged. Much depends on competition. If there are many exchange offices operating in a certain direction (for example, exchanging rubles from a Sberbank card for bitcoin), the commissions will be small and the rates of different exchangers will be close. In this case, it will be difficult to make money. A person who needs to exchange fiat money for cryptocurrencies or vice versa will look for the most favorable rate and, other things being equal, will exchange his assets where the exchange rate will be the most attractive. For this reason, during the working day, the exchange rates of cryptocurrency assets for fiat money or for each other are constantly changing. Owners of exchange offices monitor exchange rates prevailing on the market and try to indicate their own exchange rate, which is more favorable than that of competitors.
In addition to a favorable exchange rate, the minimum exchange amount is important for clients. Depending on what assets are being exchanged, the minimum exchange amounts will vary between different exchange offices. To ensure that clients exchange assets at your exchange office, set minimum amounts for exchange.
The reputation of the exchange office is extremely important for clients. Most exchange offices are located in some aggregator of exchange offices, for example, in //www.bestchange.ru. It provides user reviews on the quality of services provided. If a person is dissatisfied with the way you served him, he will write a negative review, which can scare off customers. Therefore, it is important that the software works correctly, and that the exchange itself occurs quickly and without incident.
Also important is the number of assets exchanged and the direction of exchange. Some existing exchange offices have a small number of cryptocurrencies and a small number of exchange methods (for example, only WebMoney, Qiwi and Yandex-money). In others, you can exchange many cryptocurrencies in a large number of ways (including plastic cards from various banks, electronic payment systems, and even exchange for cash). It is clear that many people will exchange their assets in the second case - where there is more choice. Therefore, expanding the range of exchangeable financial assets is an important competitive advantage. You can make very good money by exchanging rare alcoins that are not available at other exchange offices. Here the commission may be higher, and clients may become regular.
Exchange offices work with users from all over the world, usually 24 hours a day. If your exchange office makes automatic exchanges and does it quickly, you will have more clients. If the exchange is carried out manually, then it is necessary to ensure round-the-clock operation of the exchange office in three shifts.
Also important is the stock of assets (reserve) for exchange. The more free assets (cryptocurrencies, fiat currencies) you have for exchange in your exchange office, the more transactions your clients will make. Often, clients choose another exchange office if they see that the available reserves (for example, cryptocurrency) are not enough to complete the transaction.
Of course, the interface through which the exchange office interacts with clients is important. It is convenient to use an exchanger if you do not need to perform many actions to exchange, constantly switch between the sites of the payment system or exchange office, or constantly check your mail or received SMS. If you write an exchange office yourself, rather than buying a ready-made script, you can think through these issues in advance and implement them better than competitors do.
All other things being equal, sales promotion tools work well, for example, providing customers with a cumulative discount. The greater the volume of exchanges a client makes with you, the greater the discount he is given next time.
Key success factors of the exchanger
The main success factors for any exchanger include:
Reliability of cryptocurrency exchangers
Since the cryptocurrency market and transactions are largely unregulated, it is very important that clients trust you. Exchangers work in such a way that first the client transfers funds (fiat or cryptocurrency), and only then receives the funds into his account. If there are any doubts about the integrity of the exchanger, people will simply be afraid to make an exchange on this resource. The only way to earn your customers' trust is to work honestly and always ask for feedback.
It is also very desirable to have a 24-hour (or at least open until late evening) chat to quickly resolve all issues.
Reliable exchangers can be added to the Bestchange exchanger monitoring site.
Relevance of cryptocurrency exchangers
Your offer should be competitive, and the rate and size of commissions should be no worse than the average offer on the market. The average rate of cryptocurrencies can be checked on Coinmarketcap, but it also needs to be compared with the rates of competitors (in exchange offices the rate can be overestimated). Some exchangers inflate the exchange rate but charge a lower commission, others do the opposite.
The relevance of the exchanger is also determined by:
- number of cryptocurrencies available for exchange
- number of payment methods (cards, electronic payment systems and wallets)
- funds limit
- quality of support service
Online exchange rate calculator
On the main page of any exchanger you need to install a special calculator form. It will help users instantly calculate how much cryptocurrency/fiat money they will receive after the exchange.
How much can you earn using a cryptocurrency exchange office?
Let’s take the not-largest commission value of 2%. If an average of $5,000 is exchanged every day, the exchange office's commission will be $100 per day, and about $3,000 per month.
It is clear that in order to achieve such a flow of clients, it is necessary to advertise the exchange office on the Internet and include it in the listing on exchanger monitoring sites. The most important success factor will be the flawless operation of the exchange office, taking into account the important consumer properties mentioned above. However, advertising is also important so that new clients, aggregators of exchange offices and bloggers who write about cryptocurrencies learn about the exchange office.
How much money do you need to open a cryptocurrency exchanger?
The costs of opening an exchanger consist of:
- expenses for setting up the exchanger site itself (the figures given above: up to 5000 for a template, original development costs more)
- purchasing the necessary cryptocurrency for exchange (fiat money must also be deposited into the account). It all depends on the ambitions of the owner. It could be 300,000 rubles, or tens of millions.
- advertising expenses. From several thousand rubles per month to hundreds of thousands.
Very roughly, you need to count on starting capital in the region of 1 million rubles and above.
Cryptocurrency exchange commission
The commission of cryptocurrency exchangers depends on the direction of exchange and the withdrawal method, but rarely exceeds 5-7%.
It is not advisable for your commission to be higher than average. But we must not forget that the client first pays attention to the exchange rate and only then to the size of the commission. Therefore, first of all, you should not overestimate the exchange rate.
What documents are needed to open a cryptocurrency exchanger?
Since the law on regulating the cryptocurrency market has not yet been adopted, exchangers are often opened without any licenses or documents. Formally, this is not a violation of the law: there are no special requirements now. Theoretically, now even an individual, not an individual entrepreneur, can open an exchanger. Perhaps, with the adoption of the law on cryptocurrencies, control measures will become stricter. Also, don’t forget about taxation.
Exchanging and withdrawing cryptocurrency from the Internet to the real sector has not been a problem for a long time. Cryptocurrency exchangers specialize in these operations. Online services make a profit from the commission they charge for transactions. It is no secret that every user who cashes out satoshi, tron and more exotic currencies thinks about the prospects of such a business.
Having decided to start your own business, you need to answer a number of fundamental questions about the potential of the direction, competitiveness, and demand. Cryptocurrency exchange is a controversial business. The dense occupation of the niche is not an obstacle. With the growing demand for cryptocurrencies on the Internet, similar services appear and disappear every day.
According to the most skeptical estimates, the demand for such services will continue in the foreseeable future. About 200 cryptocurrency exchangers and exchanges operate stably on the Internet, which is not so many when considered on the scale of the global market. Making a profit from launching your own exchanger is not as difficult as it seems at first glance. Although there are risks, subtleties and pitfalls here.
How to open a cryptocurrency exchanger
The system of earning money through your own cryptocurrency exchanger is quite simple: the more transactions and exchange operations, the higher the income. There are several options for starting your own business, each of which has its own characteristics and different profitability. The legal background is also different.
So:
- Partnership with the bank is not considered in relation to Russian banks. Not long ago, the Central Bank “did not recommend” Russian banks to take risks in operations with cryptocurrencies. In Ukraine, Privatbank successfully works with bitcoins. The option, let's say, is not easy. Foreign banks have not moved beyond announcements and statements in the press;
- Creating your own exchanger. In this business, newcomers will face serious competition. New exchangers appear with enviable regularity. However, not everyone is able to stay afloat for a long time. Analyzing the most successful and stable exchangers, you can see that each of them has some kind of “trick”. For example: transactions with exotic currencies, reliable transactions, extremely low commissions.
The second obstacle is financial transparency. The need to formalize contracts with major market players (WebMoney) requires a personal passport. To avoid legal problems, it is better to register as a dealer. By increasing turnover and, accordingly, profits, sooner or later the site will attract the attention of the tax service. An individual entrepreneur is great for legalizing an online business;
- Affiliate for exchange refers to the easiest ways to make money on cryptocurrency exchange. This option does not at all fall into the category of a business that can generate serious income. More suitable for those who want to know the market from the inside. Perhaps the experience gained will be useful in the future.
The success and demand for the service depends on many factors. Not least important are the reliability of operations, the anonymity of users and the size of the commission. A kind of “three pillars” serve as the basis for stable income through the formation of a base of regular customers.
Technical side of the issue
It is a rare business that does not require investment at the initial stage. The cryptocurrency exchanger is no exception. To correctly calculate financial costs, you need to have an understanding of the technical side of the matter. Through the eyes of a techie, the exchanger is not very different from any other site.
The main costs will be for:
- Layout, site acquisition with up-to-date functionality and attractive design. The minimum amount in this cost column will be five thousand rubles;
- Quality hosting It’s also worth something for the site. Free hosting is not suitable due to low relevance in search engines. A more expensive tariff for a separate site is more suitable. This guarantees that the site is hosted on a separate server with high speed and reliability. Monthly payment is approximately 400 rubles;
- Purchasing a script will take up the lion's share of costs. Prices vary widely. The best field for finding a performer is highly specialized forums of freelance programmers. The quality of the script determines the reliability and reliability of the service;
- Attracting target customers. Promotion through social networks has proven itself well. You can save money yourself by creating thematic public pages on various social networks. It is better not to abuse promotion programs.
It is necessary to act comprehensively. When promoting an exchanger or several exchangers on social networks, it is advisable to reach as large an audience as possible. Constant monitoring of competitors' websites is very important. This will help you create more attractive offers for potential clients. When creating an exchanger, do not forget about the source of cryptocurrencies for exchange.
The conversion of cryptocurrency received from clients goes through numerous payment systems. You need to open wallets in each of them with cash balances in the accounts. Many users consider the stock of reserves as an indicator of the reliability of the exchanger.
Drawing up an agreement with services
Almost all serious cryptocurrency exchangers enter into agreements with payment systems through which financial transactions are carried out. The main thing is transparency of cooperation! The percentage paid by the exchanger in favor of the payment system is separately specified. The owner of the exchange office independently sets the percentage threshold charged from users for exchanging funds.
Everywhere the commission fee varies from one to five percent. It is better for a beginner to stick to the golden mean. The maximum percentage is the privilege of major players in this market segment.
It is important that the interest rate corresponds to market conditions and is backed by cash reserves in different currencies.
Exchange service
Maintaining the service is practically no different from administering a regular website that handles user finances. A virtual exchanger resembles a dispatch center with a small staff. Often one person is enough to constantly monitor the situation on the market. His responsibilities also include installing software, so-called bot programs.
Automation of the process of averaging exchange rates is the key to the relevance of the exchanger and the effective attraction of customers.
Selection of cryptocurrencies
Most exchangers, unlike stock exchanges, work with the most popular cryptocurrency pairs included in the TOP 10. Ordinary users prefer Russified services with automated functionality, which exchanges cannot offer. To enter the cryptocurrency exchange market, it is enough to offer transactions with Bitcoin, Dasha, Bitcoin Cash, Ether, Zetcash, Litecoin. Monero and ripples are considered exotic coins that can attract additional traffic.
The more trading pairs, the more attractive and solidlooks like an exchanger.
Pros and cons of exchange business
The launch of a virtual exchanger looks much more interesting and promising than other investment areas. Despite the fact that trading in digital coins does not have a clear legal framework, it can hardly be called completely illegal. There is no direct prohibition in the law!
The prospects of this direction lie in the limited number of factors requiring direct control, which is beyond the capabilities of other types of business:
- The exchanger earns the trust of clients at the initial stage of development;
- A qualified dispatcher is required whose responsibilities can be handled on his own;
- Specific and expensive software.
The main advantage is maintaining liquidity. No need to buy equipment or rent an office.
Cryptocurrency exchangers are one of the most promising areas of online business. Creating such a service from scratch is a completely doable task, but it requires deep penetration into the topic, a thorough knowledge of all the nuances and pitfalls of this process, as well as considerable funds.
How the cryptocurrency exchanger works
Since virtual currencies exist only in the virtual world and have no physical analogues in the form of bills or coins, all transactions with them are carried out exclusively online. Today, there are many services online for exchanging money (both crypto and fiat), the functions of which are identical to those of banks:
- Buying and selling. Crypto assets can be exchanged for any fiat currencies, but in practice only a few of the most popular ones are used - dollars, euros, rubles.
- Exchange. New cryptocurrencies appear almost every week. Which of them to support on its resource, each exchanger decides individually, taking into account the needs of clients.
- Translations. There are many services offering the “electronic wallet” service. In Russia, the most popular are WebMoney, Yandex.Money, KIWI; in other countries people give preference to other resources.
For all the services listed above, the exchanger site charges a commission of 2 to 10% - this is the income from this type of business.
Where can I get a script to create an electronic currency exchanger?
There are three ways to get the script, and none of them are perfect.
1.The first method is to download it online. At first glance, the method is attractive because it is absolutely free. Unfortunately, this is where the benefits of free scripts are limited. This option is not suitable for creating a serious service; it can only be suitable for launching a test project and gaining experience. And here's why:
- Low quality. Free scripts have many flaws and bugs, often very dangerous. Here is just one example: a bug that allows the owner of a ruble account to click on “USD” in the list of currencies, and the amount in rubles is magically transformed into a similar amount in dollars (instead of exchanging at the exchange rate). Needless to say, such a mistake can lead the owner of the exchanger to bankruptcy in a matter of days.
- Low level of security. Free scripts do not have a sufficient level of protection against DDoS, and sometimes they can even contain spy code that gives hackers access to the admin area and client accounts.
2. The second method is to buy. A high-quality script costs from several thousand dollars. You can also try to negotiate with script developers and choose a more budget-friendly option: rent or participate in an affiliate program.
3.Order an individual script. If you have the required amount, then do not hesitate to choose this option. It will allow you to get a product with an original design and functionality, fully adapted to your needs. Of course, in addition to money, it will also take time: at least a month if only one programmer works on the script.
How to register a business correctly?
You won’t be able to start work without registration; everything must be done according to the law. Although cryptocurrency legislation has not yet been adopted in Russia, there are several ways to officially register an exchanger.
- Conclude a permanent loan agreement (done without notarization, which is the main advantage). It is under such agreements that most exchange services operate. Legal assistance will only be required to correctly draw up a contract.
- Register the exchanger as an individual enterprise working in the field of information technology. The only nuance that could theoretically cause problems with such registration is the lack of cryptocurrency legislation. But there is not long to wait: after lengthy debates and postponements, deputies during the autumn session of 2018
- Purchase a Japanese license to operate a currency exchange business. This will remove all legal problems. Unfortunately, the cost of this document is too high - up to $100 thousand, so it is often purchased when creating cryptocurrency exchanges, rather than exchangers.
How to make your service attractive to customers?
If, for example, hundreds of exchange offices exchange rubles from a Sberbank card to VTS, then the exchange rates on all resources will be approximately the same, and commissions will be low. You won't earn much from such operations. But it’s also impossible not to support the most popular directions, otherwise it will alienate a significant part of customers.
Coin rates change throughout the day. Exchanger employees must constantly monitor the markets and offer users a rate that is more favorable in comparison with competitors.
It is very important to set minimum exchange amounts, maximize the number of directions and methods of exchange (include cards from different banks, electronic payment systems, and even exchange for cash). All this will also contribute to the influx of users to your resource. Listing rare altcoins that are not listed on other sites is another good idea. Here the commissions are higher and the clients are regular.
It is important that the service operates 24 hours a day, and that the exchange is carried out automatically (that is, instantly). Resources with manual output are less popular; moreover, they require staff to work in three shifts.
Other factors to consider:
- simple and intuitive interface. The fewer “movements” the client makes during the exchange process, the better. Only a well-written individual script can provide maximum convenience;
- availability of bonuses, discounts (including cumulative discounts), affiliate programs;
- availability of sufficient exchange reserve. The client will not wait until you have funds for exchange; he will go to another site;
- organization of technical support work. Any problems must be resolved promptly, the client must always be satisfied. Negative online reviews can easily kill your business before it even gets back on its feet.
You should take into account the specifics of how exchange services work: first, the client transfers his money, and then waits to receive the converted amount into his account. This means that he must trust you unconditionally. People should not have even a shadow of doubt about your integrity. Positive reviews will work for your image, so it makes sense to incentivize users to receive them, for example, by awarding bonus points for this.
Price issue
Costs for opening an exchange service include:
- Website development and configuration. The average price of a finished script is about $5 thousand, original development is from $8-10 or more.
- Purchase of cryptocurrencies and fiat for exchange. It all depends on your ambitions. You can limit yourself to a few hundred thousand, or you can invest tens of millions of rubles.
- Website promotion. It’s not enough to create an exchanger; you need to let people know about it. To organize an effective PR company at the initial stage, considerable funds will be required - tens (and sometimes hundreds) of thousands of rubles.
How much income can you expect?
It is quite difficult to plan income from this type of business. If we assume that your resource will carry out transactions worth $10 thousand every day, then with a minimum commission of 2%, the profit will be $200 per day or $6 thousand per month.
