At the stroke of the midnight, err.. maybe an hour or so later, Bitbns announced a new way of depositing and withdrawing INR on their exchange using vouchers. I was reading the ‘tryst with destiny’ speech by Nehru when the announcement happened, sans the mighty opening.
The Bitbns ‘Plan B’ for INR deposits now rely on a third party called BidforX. Before we get into how its done and what is bidforX, a little bit of history. Almost all Indian exchanges have shut down INR deposits and/or INR withdrawals after July 6, the deadline for RBI mandate. Some exchanges have launched their P2P models and some are sitting tight with crypto to crypto trading only. Then there are a couple with unique solutions like Pexo with perfect money or Bitbns with BidforX.
Before we get into introducing BidforX, lets start with the test – depositing INR on BitBns.
How to Deposit INR on BitBns using BidforX
BidforX is a new website that auctions off high value premium products to highest bidder. The bids in this case are as low as 1% of the original product value. For instance the phone ‘Redmi Note 5’ was sold for just Rs. 10.92 to the winner.
Before you think of going and placing your bids, remember the gambling rule – “House always wins”. We will talk more about that and BidforX later.
To deposit INR into Bitbns, the exchange requires you to convert your money on BidforX to a voucher and send it to bitbns. You have to deposit INR to BidforX, convert them to a redeemable voucher for a unique email address that Bitbns will provide and it is exclusive to you. The money will be credited to your account within a few minutes.
Lets do one transaction of Rs. 500/-.
Step 1: Add Money to BidforX
After creating an account on BidforX, you can add money by clicking on ‘Add bids’. Enter your UPI ID and amount, you will receive the BidforX UPI details for sending money.
1 INR = 100 Bids, so 500 INR = 50000 bids.
I really hoped that BidforX will send a ‘collect’ request when I press that submit button but instead they gave me their VPA and QR code. A collect request would make life slightly easy.
Incredi Auctions is also the account holder name of this account.
The amount was credited within 5 min and now I have 50000 bids in my account.
Step 2: Generating the voucher
Go to Bitbns INR Wallet and click on deposit, copy the unique email address you need for the voucher. Then come back to BidforX and generate voucher.
You have to enter the amount to be sent to Bitbns and the email address. Again, the email address that you copied from your INR wallet is how Bitbns is identifying your deposit, so that must be correct.
Once the voucher is generated, the amount gets credited to your Bitbns account in five minutes.
So for Bitbns this is a voucher deposit and they are planning to allow voucher deposits from Amazon and Flipkart as well. Now, lets talk about this service provider – BidforX
What is BidforX?
BidforX is a new company that auctions products. You can place a bid for as low as Rs. 0.01 or 1 Bid (yes they call the unit of bid also a bid, it is very confusing). There is timer of 10-20 seconds, if no one places a bid higher than yours within that time, you win the product.
Most of the products are sold for less than 1% of the value, it is so incredible you can say, but there is a problem with this model for the user if he or she isn’t disciplined. This is not an auction where you can place a bid and if you do not win, you do not pay anything. This is an auction where you pay to place a bid.
Suppose an iPhone is on auction. The current bid is Rs. 1.43 or 143 Bids (again confusing), you decide to bid 144 Bids, you have to pay Rs. 1.44 to BidforX. Similarly, you will keep paying for every single bid you place. So if the iphone gets sold for say 15 rupees and a bid was placed for every Rs. 0.01, you can calculate the total amount in bids paid to BidforX.
The mathematical formula is S = n(n+1)/2 where n = 1500 (15 Rs. = 1500 Bids) S = total Bids
So in case of the iPhone, BidforX received 1125750 Bids or Rs. 11257.5.
You can say that its still significantly cheaper than a Rs. 70000 worth of iPhone but remember this is just the beginning. BidforX went live with bidding less than 2 weeks ago and there aren’t many users yet. They are already making huge profits on smaller products like Paytm Voucher of 1500, that was sold for Rs. 7.01. BidforX acquired Rs. 2460 in bids for selling something worth Rs. 1500.
The game requires discipline, the idea is you have to lose a lot of money for a chance to win a better product. You can even set auto bids until a certain amount is reached. Psychologically this is just like gambling, you will keep placing bids in order to recover the losses from previous bids.
This is the working model. Now, let’s talk about BidforX as a company.
Is BidforX Shady?
There are a few things shady about the website and they need to be addressed. BidforX domain was registered on April 11, 2018. BidforX went live in July with the auctions. There are speculations that this is a product from Bitbns itself to circumvent the RBI banking ban. Bitbns has denied this allegation and we haven’t been able to prove otherwise yet.
But let us talk about other dal mein kuch kala:
- BidForX website shares no details of founders or the parent company. Terms and conditions and privacy policies are vague and has no mention of legal entities running BidforX
- From UPI VPA and a video review, we can determine that the name of the company registered with bank is ‘Incredi Auctions’, but could not find it on the registrar of companies’ list.
- No support phone numbers besides just one email addresses
- If your money is not deposited, you have no way to reach out to them other than email.
- BidforX offers to create vouchers of upto INR 50000 per day which is a very large amount for a gift voucher and way beyond the permissible limits of INR 50000 per month on prepaid payment instruments.
According to RBI, a company offering vouchers or gift cards, must be registered under companies act and have approval from the central bank. We could not find ‘incredi auctions’ in the list of companies and are not sure about the approval.
I would personally recommend to stay away from the auctions till these things are clarified by BidforX. The only info available from the website – it is based out of Kolkata.
Are there any Risks on Using it with Bitbns?
I would like to first commend the relentless spirit of Bitbns to keep on trying, growing and bringing solutions for their customers. The jugaad works as a quick fix to banking ban but, using BidforX is risky for Bitbns and doesn’t look sustainable.
It will only take a few hours for BidforX’s bank to freeze their account if they realise that the purpose of deposits on BidforX is for transactions on Bitbns exchange. The sudden spike in transactions may alert the bank officials and no bank will go against a decree of RBI.
On top of that, any prepaid payment instrument provider is a regulated entity under the RBI, hence under the purview of RBI’s banking ban, neither BidforX nor any other voucher providers are allowed to provide service to Bitbns or any other cryptocurrency exchange.
The risk of abrupt ending of the service looms over your head all the time when dealing around the regulations, and the same is true here.
If the bank account of BidforX was to be frozen, user funds may remain safe in form of bids on BidforX that can be sent to Bitbns as a voucher. That is a good sign but there is a big ‘may’.
Bitbns offers a withdrawal-to-voucher service, that withdraws the money into a voucher redeemable at BidforX. This carries the same risk.
Despite RBI ban, the shadiness of the website with no other partners to provide the voucher service and that if your INR deposit is stuck in BidforX, Bitbns cannot help you worries me a little to work with them.
Not knowing the face behind the company that will handle your money is always risky in my opinion. So do your deposits at your own risk and try not to get stuck in the bidding war, just transfer it to Bitbns and trade.
It remains to see if Bitbns is able to allow deposits using Flipkart and Amazon vouchers. What do you think will happen? Keep the conversation going in the comments below