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How crypto exchanges can turn direct deposits into a fiat onramp

Pinwheel Team

March 31, 2022

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Cryptocurrency has had quite the story arc. What started as an experimental investment is now used by more than 100 million people worldwide who take fiat money (state-issued currency like USD) to purchase crypto (anything from Bitcoin to meme coins). And crypto exchange platforms are the first stop for every up-and-coming investor ready to turn their dollars into cryptocurrency.

A fiat onramp is an essential component of crypto exchanges because it enables users to purchase cryptocurrency using fiat. With a fiat onramp, anyone with enough money in their bank account can purchase the cryptocurrency of their choice.

While crypto exchange platforms have made it easy for anyone to own digital assets, users still largely rely on using their bank accounts to make a purchase. Is there a way to make this process simpler and more automated?

Enter automated direct deposit switching. It’s an API solution that connects crypto wallet owners to their income or payroll platform, enabling them to automatically fund their wallet on payday. And it might just be the most straightforward fiat onramping solution yet.

What is a fiat onramp?

A fiat onramp is the easiest way for an investor to acquire cryptocurrency using the “real” money (aka fiat) they already have. Onramps are available on crypto exchange platforms, like Kraken or, and sometimes investors can also access them via an emerging network of crypto ATMs.

Fiat onramps aren’t the only way to get cryptocurrency; investors can acquire it through mining or accepting it as a payment method. But newcomers who are just starting out will rely on a fiat onramp. And when they’re done HODLing, investors can use a fiat offramp to convert crypto into fiat currency.

How direct deposit switching works as a fiat onramp

With automated direct deposit switching, crypto exchanges can offer their users the easiest method of purchasing crypto — automatically, as soon as they get paid.

The simplest way for crypto exchanges to integrate a direct deposit switching solution into their platform is by using an API like Pinwheel. It allows investors to connect to their payroll or income platform directly on their crypto exchange apps and input the amount of money they want to deposit into their wallet on payday. For users, the set-up process is easy to navigate and only takes a couple of minutes.

Major crypto exchange platforms like Gemini and BlockFi have already simplified the fiat onramp process with automated investing. This feature allows investors to set up recurring buys using their bank account instead of manually purchasing crypto.

Although this process is convenient, crypto platforms can provide another equally user-friendly option with automated deposit switching. Thanks to this feature, if an investor changes their bank, they won’t need to manually update their payment method with their new bank account information. The funds will be transferred straight from the consumer’s payroll or income platform into their crypto wallet, bypassing the bank altogether (which is something some crypto enthusiasts can get behind).

Crypto exchanges need automated deposit switching to stay competitive

A direct deposit switching solution also has benefits beyond user convenience. For crypto platforms, it creates a single point of connectivity to a consumer’s payroll and income data, which they can leverage to power new products — and this is key in today’s hyper-competitive fintech space.

Major crypto exchange platforms are no longer staying in the crypto lane. They’re launching debit and credit cards, and some even offer loans. The product expansion has led them into the territory of traditional banks and fintechs, where companies are innovating around the clock to attract consumers.

To make things more exciting, some non crypto-native fintechs are moving into crypto trading. N26, a German neobank, announced it’s launching a crypto trading product this year. In the U.S., Venmo released a similar feature in 2021, and Robinhood’s brand new debit card can automatically invest in crypto.

Fintechs and traditional financial institutions have also realized the value of automated direct deposit switching and integrated it into their products. Pinwheel has helped a top 5 neobank increase direct deposit penetration by 20% in the first month alone, and some fintechs have seen increases of up to 75%.

So why is this important? When consumers can easily switch their direct deposit, they’re more likely to transfer their paycheck (or a portion of it) to their new account. As a result, financial service providers can capture a greater share of wallet and perhaps even become the user’s primary bank account.

Crypto exchange platforms stand to have the same benefits from automated direct deposit switching, which increases the likelihood of consumers funding their crypto debit card and using it to make purchases. And with more fiat deposits, crypto platforms can drive more revenue from trading fees.

How Pinwheel powers easy direct deposit switching

Whether they’re using a traditional bank or a crypto exchange, consumers want user-friendly financial services. And automating manual processes is an essential part of that.

With Pinwheel, crypto trading platforms can enable users to update their direct deposit settings in a few clicks and automatically fund their crypto wallet on payday. Our platform protects against fraud by verifying the user’s identity prior to making the deposit switch.

Pinwheel also uniquely enables recurring access, which allows financial service providers to track customers’ direct deposit allocations over time, gain insight into consumer income trends, and understand who else is their direct competitor.

Companies can then use this kind of consumer financial data to inform their strategy, understand what their customers need, and take proactive steps to address those needs.

Ultimately, automated direct deposit switching offers crypto trading platforms an easy fiat onramp solution, setting them up to capture a greater wallet share as cryptocurrency becomes more mainstream.