The number of Bitcoin ATM (BTM) installations has grown exponentially as the popularity of Bitcoin and the entire cryptocurrency industry expands worldwide. Business owners and entrepreneurs have rapidly entered the digital token markets as infrastructure and consumer demand for convenient cryptocurrency exchanges have increased – setting the stage for healthy revenue projections and robust profit margins.
If you plan to buy a Bitcoin ATM of your own and pursue a business opportunity in the lucrative crypto market, follow these three basic steps to ensure hassle-free revenue growth. Each step offers considerations to help you achieve a faster return on your investment — with lower overhead expenses and minimal errors.
Follow the outline below to make informed decisions that contribute to your ATM’s bottom line and total profits.
Step 1: Do Your Research
The more you understand the overall Bitcoin ATM market and any potential pitfalls along your path to ATM ownership, the less friction you involve within your business and its earnings. Be sure to research the following points:
- Confirm overhead costs and potential profits. Weigh the initial startup costs against your kiosk transaction volume and consumer commission fees so that you can determine the projected revenues and the timeline till profitability. Include expenses such as your kiosk purchase, operational costs, and maintenance fees, and then compare them to your expected return per customer and monthly earnings. For a detailed look at the average profits and expenses of a Bitcoin ATM, learn more here <Insert Hyperlink>
- Research the ideal location. Your Bitcoin ATM makes money on each customer transfer via levied fees, so the more transactions, the more profit. Locations that provide direct access, convenience, and high levels of foot traffic offer the best transaction performance, so search for an ATM placement that fits these criteria. Moreover, real estate costs can account for the largest expense to your venture, so finding an ideal locale has an impact on your ATM’s profit ratios. For more information on Bitcoin ATM locations, read all about it here. <Insert Hyperlink>
- Determine kiosk type. Some machines only purchase Bitcoin and do not offer the ability to sell it through an internet exchange. These one-way machines work for fiat-to-crypto transfers and have fewer expenses; however, they usually come with limited features compared to two-way options. Select the machine type that fits your business goals and consumer demand.
- Select the ideal machine. Different ATM kiosks vary in price according to add-on features such as top-mounted ad monitors, touch screens, and thermal printers. Stand-up models cost more than smaller desktop versions, and built-in wall mounts have increased installation expenses. Choose the ATM that fits your budget and requirements.
Step 2: Tick Regulation and Compliance Boxes
Cryptocurrencies are decentralized, but they still fall under several regulatory and legal frameworks. Failure to attain compliance can result in fees and a significant delay to your ATM’s profitability. Make sure you are compliant in the following areas:
- Register with FinCEN. The Financial Crimes Enforcement Network (FinCEN) monitors all compliance issues related to payment processing, even with deregulated cryptocurrencies. The governing body protects against fraud, terrorist financing, laundering, etc., so ensure that you register as a legal ATM kiosk owner.
- Register for your Money Service Business (MSB) License. An MSB License is federally required for any business that transmits and exchanges money. As a Bitcoin ATM owner, you must electronically register for your MSB license with the Department of the Treasury (Upheld by FinCEN). Registration is simple and covers a two-year time span.
- Register for any state compliance and additional regulations. Different states approach the acceptance and legality of Bitcoin at varying levels. Check-in with your local state authority for these individual requirements. Other compliance documentation such as Know Your Customer (KYC) is also required, though many of these regulations are covered by your ATM processing partner.
- Be AML compliant. Extending from the Bank Secrecy Act, crypto ATMs must have Anti-Money Laundering (AML) compliance. AML helps prevent the illegal use of money and deters fraudulent activity. It is your responsibility to keep detailed documentation about customer identification and your machine’s transaction record. Ensure that your kiosk and data collection follow AML compliant internal protocols.
Step 3: Find Partners
Bitcoin ATMs fit within a larger ecosystem of financial institutions that facilitate and service the direct exchange of currencies. It is in your best interest to find the following partners to help safeguard your investment:
- Find a legal partner. Since Bitcoin and other cryptocurrencies are a newer phenomenon and still involve a small amount of skepticism, it is a good idea to connect with a legal partner who can help you traverse the legal compliance requirements of your particular jurisdiction. Not only does this minimize costly delays, prevent errors, and minimize compliance fees, but it adds a level of insurance in the event of money laundering or illegal activity committed by users on your Bitcoin ATM.
- Connect with a crypto-friendly bank. You need to connect your cryptocurrency hot wallet to a traditional institution for the liquidity requirements of fiat currencies. Unfortunately, not all banks will accept the risks involved with cryptocurrency exchanges. Look for a banking partner who is comfortable with alt-coins, digital tokens, and fiat-to-crypto transfers.
- Partner with a reputable ATM processing company. Each ATM needs a processing partner who operates the actual software mechanics of each exchange, such as PIN confirmations, hot wallet location, and service transactions. Select a partner with robust service offerings, low fees, and who can help you and your Bitcoin ATM succeed.
With those three simple steps, you are well on your way to entering the Bitcoin ATM industry! Keep the information above in mind, and then make a purchase that fits your budget and goals.
How can ATMMachines.com assist?
When you purchase a Bitcoin kiosk from us, you receive 0% in processing fees. We help install and program your BTM and assist with the technical and legal hurdles associated with owning a Bitcoin ATM Business. We set up your hot wallet, have established relationships with crypto-friendly banks, and let you use our federal registration and state licenses to meet compliance regulations.
If you are interested in installing a Bitcoin ATM and want more information about partnering with us, contact us here.