Crypto on-ramp aggregators claim to offer ease of implementation and lower prices to your users, but is it true? Read on to find out why this might be misleading.
When looking for an integration solution to let your users purchase and sell crypto from within your application, you’re likely confronted with two options:
- integrate one or more on-ramps/off-ramps one by one;
- integrate an on-ramp aggregator, which claims to allow you to have several on-ramps within a single solution.
It might be tempting to consider the aggregator path. In theory, that should save you time and effort in implementing and maintaining your on/off-ramps (from now on, we’ll refer to “on-ramps” to mean both on- and off-ramps for short). After all, you’d get all the benefits of multiple integrations for the effort of just one, right?
And moreover, these aggregators even claim to be able to offer better pricing to your end-user, arguing that they have “bulk agreements” with each individual crypto ramp. It looks like a no-brainer: why even consider other options?
However, in real life, that’s just not the case, no matter what aggregators might claim. Being in the crypto on-ramping industry for the past 5 years, we can assure you of that.
For this very reason, we do admit we got skin in the game, and it’s our explicit choice not to offer our services through integrators. Given these circumstances, we’ll try our best to remain as neutral as we possibly can and stick to facts over opinions.
But first, let’s clarify what crypto on-ramp aggregators are.
What are crypto on-ramp aggregators?
In essence, a crypto on-ramp aggregator is an intermediary that aims to offer the experience of multiple working crypto on-ramps under a single user interface (the same goes for off-ramps).
They sit between an integration partner and one or more crypto ramp providers, purportedly benefitting crypto businesses with reduced integration and maintenance costs, and helping end-users find the best price on the market.
We say purportedly because, despite their claims, that’s not how it goes.
Should I integrate a crypto on-ramp aggregator?
Placing an aggregator in between your users and crypto on-ramp (or off-ramp) providers is just adding an intermediary to the mix - which in this case adds no value to users or to crypto ramp providers.
It’s not that the act of aggregating is bad. Ramp itself is an aggregator of different payment methods, local payment rails, global licensing, customer service - all working together to make up a product that’s greater than the sum of its parts.
Aggregators in some industries fill important roles in facilitating discovery, arbitrage, and optimal allocation of resources (say, for hotel rooms, or flights that would otherwise take off half-empty).
However, most crypto on-ramp price aggregators just replicate the value created by each on-ramp, while taking a cut and trying to create enough of a network effect to justify their own existence.
Here are 8 reasons why it’s better to integrate a crypto on-ramp directly instead of an aggregator.
1. Higher fees for the end user
Despite what many aggregators claim, they will always offer worse rates for the end user as their business model adds an unnecessary intermediary who takes a cut from each transaction.
This fact can be easily checked by reviewing and comparing live examples.
Their claim that they are able to negotiate better rates from on-ramps due to their high volume is simply untrue, as that would mean on-ramps are undercutting themselves to the aggregator.
The resulting higher fee also limits their partners’ monetization options, as adding yet another fee on top becomes too expensive for end-users - meaning you’re at a disadvantage against a competitor that decides to implement the on-ramp directly.
2. Poor user interface
By combining multiple unique on-ramping experiences into a single user interface, aggregators are forced to break down the source UIs into their lowest common denominator.
Whatever information or functionality they carry is dictated by the least-capable on-ramp provider they work with in order to keep their single interface experience from breaking.
The aggregator experience is often slow, buggy, and broken, as the best on-ramps are focused on providing highly customizable, ever-evolving solutions.
This means that any updates and improvements from on-ramp providers may not be readily available to aggregators (if at all).
3. Compliance, fraud, and reputational risk
Aggregators often compete by having the largest number of on-ramps within their platform. However, not all crypto on-ramps hold up to the same regulatory or security standards.
Some providers may not be subject to the same level of regulation as others, creating additional risk and limiting recourse for your end-users.
Without the right level of compliance controls, there’s a risk you end up facilitating illegal or high-risk transactions through your platform.
Plus, if one of the substandard on-ramp providers ends up facing a security breach or fraud, your reputation may suffer by association.
4. Bad customer support
Aggregators generally offer no level of customer support. Instead, they redirect your users to catch-all FAQs that don’t reassure your users - or solve their problems. They just don’t have access to the data around the user’s inquiry, as they’re not a part of the transaction.
As a last resort, aggregators push end-user inquiries to each on-ramp’s support teams. This support may vary significantly in service quality and response times, which is made worse by trying to pull limited information from the middleman.
5. Increased integration complexity
While integrating a single on-ramp aggregator may sound simpler, partners often find that this solution can be more complex to integrate and maintain than cutting through the middleman.
For an aggregator, supporting multiple on-ramps (each of which can update its documentation at any time) within a slimmed-down made-to-fit integration can carry significant drawbacks, as well as hidden costs.
Aggregators lack the resources to provide you with an integration manager to help you set up, customize and deploy the solution that works best for your users while providing continued high-quality technical support.
Additionally, they offer you no SLA that you will have the same or any support over time; they can withdraw or refuse to work with a given partner at any time.
6. Lack of transparency
Aggregators have the option to not be transparent about their fees or the specific exchange rates they use, which can lead to confusion and uncertainty for users and integrators.
Also, they’re unable to provide you with significant data insights, webhooks, and analysis on the transactions you process on your platform, as these are held by each individual on-ramp.
7. Lack of ecosystem support
Aggregators are focused solely on trying to make varying APIs fit within their module. They lack the ecosystem support to help your business grow.
They aren’t able to support any custom integration you might require or any tokens you plan to add in the future. Neither can they support you with business development and marketing activities that a well-established on-ramp like Ramp can.
8. Low adoption rate risk
Although aggregators have been around for a few years now, none of them has managed to sign deals with any partners that would produce significant volumes for them, mainly for the business-model drawbacks we discussed above.
Their business model is therefore still untested at scale, whereas individual, trusted on-ramps like Ramp have experienced periods of extreme stress with little to no issues.
We understand the need that DApps have to compete against an ever-increasing number of providers across multiple platforms, all the while keeping costs under control - and integrating and managing a large number of on-ramps doesn’t help.
But the thing is, you don’t have to manage a large number - all you need is one trusted, global integration partner. And that’s where we’re uniquely positioned to help you.
We’re already global, with coverage in 160+ countries and regions, and connected to the world’s most popular payment methods.
Moving forward, we’re doubling down on our commitment to making crypto easy for everyone. We’re focused on deploying our latest fundraise to expand our coverage and payment methods across the globe - while remaining strictly compliant with applicable regulations.
With Ramp, you don’t need to integrate an aggregator or another provider. You’ll benefit from having a direct relationship with us, and our integration managers will help you to fully customize the flow that works for you and your users.
And your users will have a seamless omni-ramp in and out of crypto, with the lowest rates and most advanced technology on the market.
Ready to integrate? Reach out to our sales team and let’s get you started!
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