Author: Justin Gilmore

While the value of a single Bitcoin has skyrocketed compared to the American dollar and far surpassed any gains made from the S&P 500, you might still question the reliability and overall investment security of a cryptocurrency ATM. Concerns about market volatility, crypto ATM fee rates, the popularity of Bitcoin, overhead costs, and the consumer demand for physical exchanges may put you off investigating the entrepreneurial returns of a cryptocurrency kiosk.

The concerns are not unfounded, but recent data shows a robust business opportunity available worldwide:

• Over 24,000 ATMs are installed globally as of July 2021 (up from the 9000 a year before)
• The Crypto ATM Market was valued at $54.8 Million in 2020
• The compounded growth rate is forecasted at a massive 58.7% CAGR

Investor interest, revenues, and customer desire are clearly present. Will the rapid growth of the Bitcoin ATM market continue? Can a machine create a profit in 2021? What return on your investment can you expect, and what costs will lower that return? Let’s do the math on how profitable a Bitcoin ATM (BTM) can be.

What Are The Costs of Buying and Owning a Bitcoin ATM?

There are several upfront overhead and recurring costs to plan for when assessing the value of a BTM.

1. Machine Type:

Each machine type comes with differences in price point:

• Freestanding – Freestanding machines are ideal for locations with ample space and convenient with minimal installation. They are the most popular kiosk type but have a higher price point (A Chainbytes model costs $6500).
• Built-in – Desktop models are smaller, have fewer features, and offer a lower price point (A Chainbytes model costs $3500). That said, their installation costs are higher. Gain more real estate and security with built-in wall-mounted BTMs.
• Pre-owned – Resellers markets have flourished, and you can often find models with 30-50% reductions in price. Users accept more risk and potential defects with pre-owned models.

2. Installation and Training Costs

Shipping, delivery, and installation will add to your overhead expenses, with reports stating you should expect $2-3K in startup costs. This stems from import fees, machine installation from your manufacturer, and shipping costs.

3. Transaction and Commission Fees

Your Bitcoin manufacturer processes all payments via your kiosk’s software. That comes with transaction and commission fees, either as a percentage range of 1-12% or a flat monthly fee ($100 per unit, per month for Lamassu). Also, banks will charge a fee for each fiat-to-crypto exchange and will often include surcharges to Bitcoin hot wallets.

These fee rates follow market conditions or are removed depending on your financial institution, kiosk, and Bitcoin ATM manufacturer.

4. Liquidity Requirements

You are required to hold liquid assets in both fiat and cryptocurrencies, with most operators opting for a 50% percent split between both currency types. The ideal amount of liquidity is based on your kiosk’s total transaction volume and if you pool cash through several machines. You will also have to maintain compliance and pay any sign-up or regulatory fees as your state requires.

5. Machine Maintenance

According to a Deloitte study, the standard ATM repair costs average about $150 a month. The price point for BTMs can increase as the supply of technicians with expertise in cryptocurrency kiosks is not as expansive. The fees come from both physical and software defects or malfunctions.

6. Operational Costs

You will also need to train employees to collect cash and operate the machine, with operators budgeting for $200-$300 per month for those intangibles. Additionally, there are the standard utility costs and supplies payments for receipt paper, branding, and customer support. The most expensive recurring operational cost is your real estate rent, depending on where you place your ATM.

So, How does a Bitcoin ATM Make Money?

BTMs recoup costs through a margin for profit attached to any fees levied on the consumer. Each machine achieves a return on investment in three primary ways:

1. Transaction Surcharges

Transaction surcharges are the direct fee percentages you apply to your customer for each transaction they make. These are the costs associated with trading crypto coins on internet-based exchanges.

Whether they are included in the spread between the fiat and cryptocurrency rate prices or applied as a percentage of the transaction, the fees involved with making a market, processing payments, and shifting currencies between hot wallets and financial institutions pass onto the consumer and can include a profit margin (often between 1-4%).

2. Commission Fees

Commission fees are the direct earnings percentage of an ATM. This is your labeled fee for service and can fluctuate as you wish, with averages quoted at 10%. Commission fees change based on real estate prices, credit card or debit card fees per transaction, costs included with hot wallet hosting, ACH fees from banks, institutional transfers, and fast payments.

Commission fees mean that the bulk of your profits comes from a high transaction volume. The average kiosk makes about 30,000 transactions a month, translating into a $3000 a month profit.

3. Increased Foot Traffic to Existing Stores

Consumer demand for the convenience of a Bitcoin ATM can drive target markets to your current business. Retailers state they earned an additional $3500 per month from the increase in foot traffic and that 25% of new customers came from a prominent Bitcoin ATM placement. For store owners, the knock-on effects of a Bitcoin ATM can further post profits.

Benefits of an ATM Processing Partner

With the rate of fees and the overall popularity of Bitcoin, a cryptocurrency ATM is still highly profitable. Many companies meet breakeven points between 3-6 months and continue with steady streams of passive income. You can judge your own earning potential and ROI timeline with this handy calculator.

You will need a company to process payment transactions between a bank and your customer (i.e., pulling up customer identifications and Bitcoin Hot wallets); with ATMmachines.com, you do not pay any of those costs, further increasing your profits. You can also take advantage of our 0% ATM processing fees when purchasing one of our kiosks.

Partner with AtmMachines.com, LLC to start a lucrative business opportunity with a Bitcoin ATM. Click here for more information about our online ATM Business Course or here to request a consultation.

Bitcoin ATMs (BTMs) have surged in total installations and consumer use as cryptocurrencies grow in popularity. Customers and businesses alike have pivoted to digital currency as a method of payment transactions, and that has propelled the BTM market to a forecasted 58.7% compounded annual growth rate between 2020 and 2026. Placements of cryptocurrency ATMs have increased (above 23,000 as of July 2021) as entrepreneurs meet consumer demand for access to Bitcoin.

As the Bitcoin ATM market is flooded with more machine options (and at varying states of quality), it becomes increasingly difficult to find the ideal Bitcoin machine that can meet and surpass your success metrics. The BTM you select will affect your potential return on your investment, and well-supported and high-level kiosks can reduce your expenses, limit support tickets, increase security, and offer better ease of use.

Finding the right selection criteria and applying them to different BTM providers ensures you make an informed machine purchase that protects your investment.

Introducing Chainbytes

We have already shown you our top three picks for the best ATMs available for installation (which you can read here), and in this blog, we will review another excellent Bitcoin ATM provider — Chainbytes. We will look into their line of 2-way and desktop kiosks, along with a new 2020 ATM release of Chainbytes 2.0 +.

Tips for Buying the Best Bitcoin ATM

Before we dive into Chainbytes and their Bitcoin kiosks, it is important to know the benchmarks of top-level BTMs to help compare the strengths and weaknesses of each machine. Use the following selection criteria to ensure that you purchase the right BTM for your needs and get the most value from your purchase:

• Partnerships. Bitcoin ATMs integrate with a variety of partner solutions to facilitate all transactions and innovative solutions. Connections between your bank, hot wallet, online cryptocurrency exchanges, and manufacturer support rely on physical and digital infrastructure. The more partnerships a BTM has, the more reliable and scalable you know their solutions are.
• Local Support. For those that want to set it and forget it, finding a manufacturer that offers robust technical support is critical for ease of use and reduced downtimes. From hardware malfunctions to software repairs, high-level local support can pay dividends in the lifecycle of your BTM.
• Warranty. Component replacement and effective manufacturing warranties can protect you from software errors or defective kiosks. A comprehensive warranty will cover any expense for parts (often including shipping), and it speaks to the customer service of your Bitcoin ATM provider.
• Security. A high level of security is critical to prevent theft, fraud, or other malicious activity that can hurt profits. Look for machines with strong physical structures and locking mechanisms, secure digital environments, and several other security features, such as pin code requests, cameras, and ID scanners.
• Compliance. Money service businesses and payment providers are subject to stringent regulations (even though the currency itself is deregulated). Select a Bitcoin ATM that meets compliance standards such as Anti-Money Laundering (AML), Know-Your-Customer (KYC), and Customer Due Diligence (CDD).

These tips and quality metrics can help you select the perfect Bitcoin ATM for you and your business.

ChainByte Bitcoin ATM Review

ChainBytes is a blockchain software and hardware company with a stated focus on “complete turnkey solutions.” As blockchain experts, they provide technology applications such as digital pay and blockchain tokenization, and the company’s value stems from their plug-and-play BTM manufacturing services.

By simplifying the creation, technology service, and installation of crypto ATMs, Chainbytes allows you to create effective white label business models for BTM investments. You can even apply branded wraps to the outside of their machines for efficient marketing material. The software technology is the primary driver of Chainbytes’ success, and what they lack in customer support and distribution, they make up for in BTM customization.

Chainbytes also scores well according to our selection criteria:

• Partnerships. Chainbytes has a series of partners that facilitate distributing its software services, but the company is limited in its software integrations. Since Chainbytes has its own high-level software solutions, it does not rely on other technical partners. For the sale of machines in new markets, technician support, and compliance requests, Chainbytes has partner integrations with companies such as Hippo Kiosks, BTM Compliance LLC, CoinOutlet, and Bayside Corporation.
• Local Support. Chainbytes puts less importance on local support than market competitors because they base their value on proprietary blockchain technology applications. Resources are directed toward custom-made alt-coin IOS wallets, smart contracts, and tokenization rather than direct support services. Third-party integrations do offer technical support when needed.
• Warranty. A one-year warranty applies to machine defects, but the software is excluded from liability. This is satisfactory to market conditions, but not ideal.
• Security. The machine contains standard security protocols and steel manufacturing, but most of the security comes from its extensive software technology. Chainbytes is considered an enterprise solution, and it contains premium software components designed for the protection of all internal systems. As proof, Chainbytes maintain decentralized autonomous organization (DAO) transaction records, which involves a high level of security.
• Compliance. Chainbytes covers all major compliance requirements for you — but it does come with an extra fee. For $1500, a third party will send a designated compliance officer to ensure registration with FinCEN, KYC, AML, and any other location-specific regulations. The machines themselves have the required ID scanners, thermal printers for receipts of QR codes, and customer identification cameras.

Chainbytes BTM models

As for physical machines, Chainbytes offers three options: Two versions of two-way stand-up kiosks (you can both buy and sell cryptocurrencies with your fiat money) and a one-way desktop style. The most recent Chainbytes 2.0 + is the more feature-laden upgrade to the standard stand-up model, offering a touch screen display, cold-rolled steel, additional top mount marketing screen, and a cash recycler.

For those with smaller budgets and fewer feature requirements, the desktop model may be of interest. It maintains regular one-way transactions at a better price point (an average ROI spread of 3-6 months). Each kiosk is customized according to the requirements of your business, all within simple white label redesigns.

As the Bitcoin ATM market continues its rapid growth, owning a Bitcoin ATM is a profitable venture. But your return on investment will hinge on the quality of your ATM kiosk and its supporting partners. Chainbytes scores well on our list of metrics. For businesses wanting scalable technologies beyond blockchain with simple machine customization, their kiosks are ideal.

If you would like a quote on a Chainbytes Bitcoin ATM, contact us here, and we would be happy to help you through your installation process.

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.

While early adopters of Bitcoin celebrated the placement of the first Bitcoin ATM Machine in Waves Coffee shop, many curious viewers paid minimal attention to the yet-unknown digital currency phenomenon. Fast forward to 2021, and Bitcoin (and several other cryptocurrencies) have skyrocketed in use and popularity, with large sale outlets and businesses now offering money transactions in Bitcoin and Bitcoin ATMs (BTMs) for convenient fiat-to-crypto exchanges.

The BTM market is experiencing a rapid expansion in line with consumer demand, and cryptocurrency kiosk installations are increasing with massive year-over-year growth rates between 50-80%. The total number of BTMs worldwide has surpassed 23,000 in July 2021, up from the 9,000 stated the year before.

Even top brands such as Tesla and Microsoft have accepted the advantages offered by cryptocurrency payments. Low transaction fees, extended privacy from the decentralized currency, improvements in security from blockchain technology, the lack of government involvement, and the overall ease of use have attracted consumers and market makers alike, further driving Bitcoin’s popularity.

If you are a store owner or plan to install a Bitcoin ATM, now is the ideal time to enter the market.

How Popular are Bitcoin and cryptocurrency in the United States?

In particular, the growth of Bitcoin ATMs in the United States is unmatched:

• America surpassed 11,000 placed BTMs as of January 2021 (For reference, the nearest competitor Canada has just over 1000).
• Retail giants Walmart and Target now offer crypto-based gift cards to accept Bitcoin as payment for goods and services.
• Home Depot and CVS have point-of-sale infrastructure that accepts multiple cryptocurrencies.
• The Bitcoin ATM market is worth 54.83 million as of 2020.
• The growth targets of the Bitcoin ATM market are expected to hit 204.8 Million by 2026.

As consumer demand for seamless cryptocurrency transactions (B2B and B2C) increases rapidly, Bitcoin ATMs present a fortuitous business opportunity.

Let’s discuss a crucial element that determines your BTMs success: Location.

Why Is Location So Important for the Success of a Bitcoin ATM Machine?

Your customers use a Bitcoin ATM because the exchange machine offers several benefits compared to a traditional online exchange or a peer-to-peer marketplace:

• Convenience 
• Availability 
• Speed 
• Support 
• Security 
• Privacy

The placement of your BTM either supports these benefits or creates barriers to them. Transaction volume is a key metric of success for a Bitcoin ATM. Your machine’s performance will rely on its ability to attract users – location either creates the ideal environment or hampers it.

For example, establishments with long working hours have a better chance for success, and kiosks placed in populated venues, where BTM users are more likely to visit, have greater odds at continued use. On the other hand, putting your ATM in an area that is difficult to access or has low foot traffic will decrease user convenience, availability, and speed.

In short, when deciding on the ideal location for your BTM, remain customer-centric in your placement:

• Convenience – Look for areas with high volumes of foot traffic and a dense population of target users, two elements that increase machine usage. Traditional ATMs average 1-3% transactional volume to total foot traffic access, so select a place that offers convenience for nearby patrons.
• Availability – How often can someone access your machine? Is it accessible, easy to find, visible, and has extended hours of use?
• Speed –  The length of a lineup (even if only perceived) can deter customer action. Bitcoin ATMs that create convoluted lines, restrict movement, or spill into walkways can limit usage. Even the availability of parking and access to a highway can either promote or prevent users. Select a spot that allows for fast transactions.
• Support – As Bitcoin’s popularity grows, you will receive new customers who need extra support. If you already have a business footprint, this can help increase your machine’s transaction volume and in-store sales (some bitcoin owners say store sales improved by 10-30% with their Bitcoin ATM installation). If you are a solo entrepreneur renting real estate, placing a BTM close to human support can boost total machine use.
• Security – Not only will a secure location prevent scams or malicious activity, but it builds user trust. Find a well-lit location if possible. Venues such as malls also offer additional security.
• Privacy –  As a core tenet of Bitcoin, search for a location that offers an element of privacy. Maintain your access to direct foot traffic, but avoid exposed areas such as open walkways.

Ideal Venues for Placing a Bitcoin ATM

Customer-centric BTM placement will always offer an enhanced return on your investment, but the actual real estate you purchase or rent for your machine will also affect performance. Gas Stations are the most popular locations for an ATM in general, with casual dining and public-use spaces occupying second and third. These are all venues with extended foot traffic, access, fast exchanges, and availability.

Coin ATM Radar released BTM data based on customer usage, with restaurants owning 12% of all transactions, coffee shops in second with 9%, and the company office tied with the shopping mall at 7%.

These numbers are also affected by considerations such as the cost of real estate rentals, the prevalence of current store owners to accept Bitcoin ATMs, and the openness of public spaces for crypto ATMs. BTMs perform better when placed in a location that also accepts cryptocurrencies as a form of payment for goods and services, helping build a more robust payment ecosystem.

With these factors in mind, we suggest you look into the following locations for your own BTM placement:

• Nightclub/Bar – Surcharge fees and the need for quick cash can boost ROI.
• Hotels and Airports – Travelers often want to avoid currency exchanges, and a Bitcoin ATM can solve that pain point.
• Grocery stores – Stores offer various goods and services, and customers want to make bulk purchases with cash or crypto.
• Gas stations – Foot traffic volume and the prevalence of cash make gas stations ideal for BTMs.
• Event Grounds – Fairs, carnivals, and entertainment venues often support cash-use only. A well-placed Bitcoin ATM can receive extended use from targeted users.

As Bitcoin grows in popularity, business owners can take advantage of the unique opportunity a cryptocurrency ATM provides. Be sure to consider the placement factors noted above when selecting an ideal location; you want to place your BTM where high transaction volumes are more likely for continued profitability.

If you are interested and want to set up your own Bitcoin ATM installation, you can find more information about our BTM placement services on our Bitcoin Service Page.

In a ground-breaking vote from congress, El Salvador has become the first country to accept Bitcoin as legal tender. By securing 62 of 84 votes from legislators, the bill reclassifies cryptocurrency’s acceptance, use, and function within the country. The ripple effect of this change has set a new global precedent, and other countries around the world have started to accept Bitcoin as a form of digital payment.

With legal tender status, Bitcoin (BTC) is now considered an official currency by the El Salvadoran government and will fall under similar fiat currencies’ standards and compliance regulations (El Salvador’s reserve currency is the U.S. Dollar). All debtors, businesses, and payment processors must accept Bitcoin as remuneration when offered.

Why Did El Salvador Formally Accept Bitcoin?

The passed bill is considered innovative but has also fallen under intense scrutiny. Global lawmakers are cautious of digital currencies since they are decentralized and deregulated. El Salvador did receive some pushback after its central digital wallet went offline. While that may show some of the instability involved with cryptocurrencies, the delay came from added server capacity as large corporations such as Mcdonalds began accepting payments in BTC.

Outside of simple access and a progressive approach to fiscal policy, the El Salvadoran government instituted Bitcoin for several other reasons:

1. Foreign Investment, Job Creation, and Financial Literacy Gains

President Nayib Bukele stated that the move into Bitcoin would create pathways for foreign investment, boost the economy with more jobs, and provide access to a primarily unbanked nation. 70% of El Salvadorans do not have bank accounts because of a lack of financial access and an overall distrust in formalized savings. With digital cryptocurrencies (and their ledger systems located on blockchain technology), public access, security, and convenience can promote financial literacy and a usable asset class for the government. Investment, inclusion, and economic development are the key factors driving the Bitcoin decision.

Moreover, money transfers fees made from abroad make up close to 20% of El Salvador’s GDP. The move to a flexible digital token can accelerate that monetary growth while removing payment barriers for the nearly two million Salvadorans outside the country.

2. Remittance and Payment Transfers Made Easy.

Six billion USD flowed into El Salvador in 2019, one of the highest remittance ratios in the world. Of those transactions, the amount initiated via Bitcoin increased by four times from the year before. Bitcoin funds sent from worldwide locations increased to 1.7 million in USD, up from the $424,000 the year prior.

Salvadorans have already capitalized on BTC as a method for remittances. Chainalysis states that payments less than $1000 increased from about 1000 transactions in April 2019 to 12,000 transactions in June 2021. The monthly value of BTC transfers boosted from $178,000 to $2.6 million in the same time frame.

How Did We Get Here?

Much of El Salvador and its historical and political connection with the United States have led to the landmark inclusion of Bitcoin as legal tender.

In the 1990s, the country had just emerged from a long civil war that had decimated the economy. To keep interest rates low, promote global trade, and propel the economy forward as it held steady inflation rates, El Salvador went through a process of dollarization, where it connected itself to the USD as a reserve currency.

This coincided with many Salvadorans abandoning the war-torn state for the safety of North America, starting the now common practice of remittance and payment transfers critical to El Salvador’s present economy.

Around 2004, about 60% of all Salvadorian exports traded with the United States, and the stability of the U.S. dollar supplanted the national currency, the Salvadoran Colón. Many found the complete reliance on the U.S. damaging to the Salvadoran values, and they have fought to create a more stable nation-state outside of American currencies.

Bitcoin presented a possible solution to El Salvador’s economic limitations between lower global GDPs and the need for U.S. Trade and currency support. Bitcoin will join the USD as a reserve currency, slowly relieving El Salvador’s need for capital in U.S. Dollars.

Why Bitcoin ATMs?

For the rest of the world, the disruptive nature of Bitcoin and its ability to support El Salvador’s economy provide continued proof of the value of cryptocurrencies. Other countries have followed El Salvador’s example:

• Brazil: The Brazilian government accepted bill 2.303/15, initiating a vote about the status of Bitcoin within the country. While Bitcoin did not obtain legal status, Brazil defined it as a virtual asset, allowing Brazilians to pay for digital currencies with crypto coins (similar to how airline miles work for retail purchases).
• Panama: Congressman Gabriel Silva announced Crypto Law, a bill designed to make Bitcoin legal tender in the footsteps of El Salvador.
• Paraguay: Carlitos Rejala, a member of the Chamber of Deputies, announced he would run for president on a political platform that would make Bitcoin Paraguay’s official currency.
• Ukraine: Ukraine passed a draft law that will legalize cryptocurrencies after the El Salvadoran bill came into effect. The country even has plans to start building cryptocurrency mining rigs.

Even the U.S. Federal Reserve has plans on creating a government-backed cryptocurrency. The infrastructure for Bitcoin and Bitcoin ATMs is growing amidst governmental acceptance.

The Critical Piece of the Digital Infrastructure is Bitcoin ATMs.

Cryptocurrency kiosks are the gateway between the consumer and a money transaction, allowing for the convenient use of a digital token. That access leads to widespread adoption, a fundamental tenet in each government’s plan for financial inclusion.

Already, this has caused Athena Bitcoin to install close to 1500 Bitcoin ATMs (BTMs) at the request of President Nayib Bukele. The kiosks are non-technical entry points for average consumers, facilitating more robust spending and formalized saving. Having an easy and secure way for Salvadorans to buy, sell, and exchange Bitcoin will help boost free-market growth factors.

Undoubtedly, other Bitcoin-leaning nation-states will look to the pioneering efforts of El Salvador, and that offers an opportunity for Bitcoin ATM owners. Panama has only 21 placed BTMs, the entire country of Ukraine has 39, and Paraguay has one single kiosk. For Bitcoin ATM investors, global placements present potential returns.

Expect Bitcoin ATMs to continue their rapid installation worldwide as the consumer infrastructure plays its role in altering digital money and global financial access.

Learn more about our first-of-a-kind Bitcoin ATM Ownership Program to find out how you piggyback off our existing cryptocurrency kiosk infrastructure to enter this fast-growing Bitcoin customer market.

With the popularity of Bitcoin skyrocketing, installations of cryptocurrency Bitcoin ATMs have followed suit, growing a staggering 80% in 2020 from 6373 units to a total of 13,955. Consumers want to buy, sell, and make payments with digital tokens for goods and services, and Bitcoin ATMs offer that convenience. A Bitcoin ATM’s peer-to-peer, borderless, and profitable transfer network has become attractive to entrepreneurs and investors who can meet the demand of digital money holders.

While Bitcoin ATMs offer you a unique business opportunity within the world of deregulated cryptocurrencies, there are several payment service regulations you must follow. So if you are about to become the proud owner of a cryptocurrency ATM, read this guide to make sure you are compliant in your jurisdiction, as it will help determine the success of your Bitcoin kiosk.

What is the problem with virtual currency regulations?

Even though Bitcoin is decentralized, cryptocurrency ATMs are considered payment services, which means they fall under several compliance laws at the state level. As the kiosk operator, it is your responsibility to comply with your state government’s specific rules. Different states have completely different legal viewpoints on digital money, tokens, or currencies; for example, most states now require a Money Transmitter License (MTL), while Montana does not. For many bitcoin operators, the various virtual currency regulations are very confusing.

Plus, the Federal government wants to maintain consumer privacy, reduce fraudulent situations, and limit money laundering (as they do with all standard payment services), which they accomplish with more regulations. The safety and security of each digital money transaction benefit us all, but it also means you need to obtain additional federal business licenses. Each new compliance law takes time and creates more expense for you, the ATM operator.

So, with confusing state laws, different regulations, and additional federal restrictions, what do Cryptocurrency ATM operators need to do or know to achieve regulatory compliance?

Your crash course in Cryptocurrency Regulators

Everybody, Meet FinCEN

• The Financial Crimes and Enforcement Network (FinCEN) is a branch of the U.S. Treasury designed to safeguard against the illicit use of the financial system. It’s the regulatory body responsible for enforcing compliance laws; it also covers cryptocurrencies under the Bank Secrecy Act. FinCEN has no interest in regulating the movement of cryptocurrencies, but they are very invested in the legitimacy of each payment transaction and the accuracy of all record keeping. FinCEN helps reduce illegal money transfers by ensuring strong payment regulations, even via digital markets or cryptocurrency exchanges.

• For Bitcoin ATM Operators, FinCEN is who you report to and from where you obtain your licenses. FinCEN considers you a financial transmitter or a Money Service Business (MSB), so you must have your own compliance controls, just like a bank. FinCEN Director Kenneth A. Blanco made that fact clear when commenting on the advent of blockchain: “We expect each financial institution to have appropriate controls in place based on the products or services it offers, consistent with the obligation to maintain a risk-based AML program.” You must register every two years with FinCEN for their database as you keep your machine compliant. Luckily, you can complete the registration with FinCEN online in about a half-hour!

AML, MTL, and MSB – What You Need to Know

There are three main compliance regulations that you need to know: a Money Service Business (MSB) registration, a Money Transmitter License (MTL), and an Anti-Money Laundering (AML) Policy.

• MSB: Any person or business who exchanges money, whether it is a traveler’s check or a cryptocurrency, must register as a Money Service Business. When you get your license, it will outline for you the required records you must keep for each transaction, most of which involve identity verifications. For example, an MSB must report any large transactions (over 2000$) deemed suspicious (i.e., planned for illegal activities). You will receive your reporting details when you register.
• AML Compliant Policy: You are required to create an Anti-Money Laundering Policy that follows a set of procedures that deter illegal activity. This includes filling out Suspicious Activity Reports (SAR) and adopting Know Your Customer (KYC) protocols that alert the proper regulatory bodies to potential money laundering. In effect, you enact due diligence on each customer who uses your ATM to minimize illegal activity. Not only is this good for the economy, but it protects your ATM and business.
• Money Transmitter License: For most states, anyone who exchanges money must apply for an MTL in the state that they plan to do business. Each state fits within four categories of restrictiveness with virtual currency regulations, so what you need for your license may be different than someone else. For example, some states require surety bonds while others do not. The purpose of an MTL is to clarify best practices in regards to money transfers — this can help reduce fraud and incorrect transactions, especially as financial services move into digital channels.

So, What’s The Solution?

Even with all this information, there are still many internal controls, audit protection, and employee training that may be required in addition to the compliance articles outlined above. So what is the simplest way for ATM operators to stay compliant? We suggest you follow these steps:

1. Register with FinCEN
2. Register for your Money Service Business (MSB)
3. Be sure to be AML compliant.
4. Register for money transmitter license (MTL) and any other state business licenses.
5. Find a legal partner that understands the jurisdiction where your Bitcoin ATM will be located.
6. Find a crypto-friendly bank that is familiar with dealing with cryptocurrency businesses.
7. Partner with a reputable ATM processing company.

An ATM processing partner can help you reach compliance with far less hassle. Most Bitcoin ATMs come with built-in KYC compliant hardware, and they also include software that handles much of the reporting and due diligence you need to satisfy most regulations. Plus, your Bitcoin ATM provider is an expert when it comes to regulatory compliance, and they can guide you through the entire process, ensuring that you obtain each license in good order.

If you need more information about Bitcoin ATM regulations, you can attend one of our ATM business courses, or you can always contact us here via our online contact forms to initiate an inquiry— we would be happy to help you with our Bitcoin ATM compliance needs!

3 Best Bitcoin ATMs On The Market

We explain what makes an ideal bitcoin ATM and review the three best manufacturers. 

When Waves Coffee Shop installed the first Bitcoin ATM in Vancouver, Canada, the cryptocurrency payment device remained a novelty and new phenomenon. Fast forward to today, and there are now 14,000 Bitcoin ATMs around the world. With the price index of Bitcoin surging in line with its overall popularity (one bitcoin has gone above 60,000 USD in value), and with cryptocurrency exchange requests growing as well, the gold rush of Bitcoin ATMs is now.

The numbers present a staggering opportunity. Coinbase reports over 35 million bitcoin wallets in use, while there are at least 64 million expected unspent transaction outputs (UTXOs), meaning roughly 100 million digital wallets have unused cryptocurrency funds. The infrastructure for business-to-consumer point of sale is rapidly growing, and manufacturers of ATMs have made the purchase and installation of a Bitcoin ATM simple, and easy.

Previous owners of Bitcoin ATMs already report making profits after six months of use, and that is before the explosion of public interest, the increase of customer support, and the availability of machines. For entrepreneurs, the idea of cryptocurrency ATM ownership has never been more attractive of a possibility — or as lucrative.

But what are the best ATMs? How can you discern and decide on a sensible investment in the unregulated field of cryptocurrency? The type and model you should buy will change based on a series of factors, such as the business you have, customers, and location (e.g., grocery stores vs. gas stations vs. casinos).

We will look into everything you need to know about purchasing a Bitcoin ATM, and then review the three best Bitcoin ATMs on the market – Genmega, Hyosung, and Triton – so that you can make an informed decision.

Selection Criteria For Purchasing A Bitcoin ATM

The purchase and installation of a Bitcoin ATM is not a simple buy-and-install. There are a few selection criteria categories to consider for you to get a positive return on investment, but also to ensure that the day-to-day management of your machine is hassle-free:

Reputable Industry Partnerships

Your Bitcoin ATM will connect with both a physical and digital infrastructure maintained by a variety of partners. From the specific self-service kiosk software to the future-forward bank relationships that can handle one-way and two-way cash transactions, you want reliable service. Many Bitcoin ATMs come with built-in integrations, revenue share programs, or platform-as-a-service capabilities that give you varying levels of control. It is in your best interest to research the partnership network each Bitcoin ATM relies upon so that you can select a provider that has high-quality, scalable solutions.

Local Support

Technical support from your bitcoin payment service is critical for business efficiency. Expert help with software solutions, sales support, hardware, and application troubleshooting, and even design input are tools you can use to limit costly downtimes and user friction. Select a Bitcoin payment provider that offers local support so that your ATM ownership is an advantageous experience

Enhanced Security

To ensure the safety of each payment transaction, the privacy of user data, and to prevent fraud, enhanced security applications are necessary selection criteria for a Bitcoin ATM. A reputable Bitcoin exchange provider will have features that protect against scam transfers. They will include physical and digital applications that verify each transaction (e.g., pin requests and ID scans). Protect against a variety of fraud situations like cryptodusting and cryptophishing. Plus, let’s not forget that your physical kiosk needs top-of-the-line metal manufacturing, and lock design to remain secure from damage and bad actors.

Regulatory Compliance

The legal ramifications change in different jurisdictions. Even though cryptocurrency is far less regulated than fiat currencies, governments still require payment services to abide by transfer rules. Often this means becoming compliant with a Money Service Business License (MSB), Know Your Client (KYC) Verification Rules or Anti Money Laundering (AML) Policies. A high-quality bitcoin payment provider will be compliant with a large majority, or all, regulatory bodies (e.g., Financial Crimes Enforcement Network), saving you time, and money.

1. Warranty: If the machine you buy is defective, or has broken parts, a warranty with a comprehensive component replacement plan covers all costs. Most standard ATM warranties extend just past one to two years of coverage in North America — finding a payment provider with a warranty also speaks to the level of customer support and overall machine quality you will get with that service’s ATM.
2. User Experience: With the need to stay compliant, several purchase/use barriers can limit engagement from the standard consumer. Plus, since Bitcoin ATMs still contain an element of novelty, and many users do not feel safe making exchanges at the physical kiosk (much of Bitcoins benefits is its advantages in monetary privacy). Reducing customer friction with an attractive design and a simple interface can make all the difference. For continued success as a bitcoin ATM owner, consider the impact of user experience.

The Best Bitcoin ATMs: Genmega, Hyosung, and Triton

With a clear understanding of what to look for in a Bitcoin ATM, we can review our three staff picks for the best Bitcoin ATMs on the market:

Genmega

1. Partnerships: Genmega is a well-known major player in the Bitcoin ATM Industry. Entrepreneurs often talk about the payment provider’s reliability, a perception earned by the high-level partnerships garnered over the years. Relationships with advanced technical partners such as Bitcoin Depot, Advanced Traction Solutions, and Genesis Coin speak about the extensive network of cryptocurrency industry leaders Genmega relies upon.
2. User Design: Genmega also earns top marks for User Design, as their range of kiosks includes features such as touch screens, removable cash dispenser cassettes, backlit LED signage, and printer integrations for a variety of receipt printing options.
3. Local Support: In regards to local support, Genmega offers extensive technical solutions, even presenting custom adaptations. Hardware, sales, and software support are presented in addition to distribution and design backing.
4. Warranty: Genmega ATMs come with a two-year warranty (one year for shell kiosks), and they will replace any defective parts with same-day shipping.
5. Security: Kiosks contain dial and electronic locks for physical security, and Genmega has a partnership with TPI for best-in-case lock and metal manufacturing. Advanced Transaction Solutions Inc provides state-of-the-art software security for your payment gateways, as well as verification hardware/software such as pin codes, and digital video footage setup.
6. Compliance: Stated compliance with PCI, EMV, CE, ADA.

The Bottom Line: A reliable and modern-looking financial ATM that can fit in most environments. Ideal for hassle-free owners.

Hyosung

1. Partnerships: Hyosung relies on a local distribution model, so its partnerships are widespread. For example, Bancsource controls local delivery in southern states, Automated Transaction Delivery integrates with fiat bank gateways, while Bitload4U and LibertyX manage the ATM software applications. As an ATM manufacturer, Hyosung is a well-connected and technical-first provider.
2. User Design: Compared to the sleek look of the Genmega, Hyosung opts for simplicity. If you want a straightforward service for both customers and employees, then Hyosung delivers.
3. Local Support: While the number of custom options is not as robust as they could be, Hyosung has expert technicians that offer high levels of technical support. Since Hyosung’s ATM lines include a more value-based approach, they streamline their support to online software help, or in-person fixes with a qualified technician.
4. Warranty: Hyosung offers a standard two-year warranty for replaced parts. You do have to fill out a lengthy RMA form, but the company recently extended their warranty by 12 months in response to the Covid-19 pandemic, which speaks to the ATM provider’s character.
5. Security: The extra security features are what sets Hyosung apart. PCI Complaint Keypads, extra break-in protection, and EMV readers can give you peace of mind. ActiveEJ, TLS encryption, and Near Field Communications can protect cardless transactions. Reinforced metal, double welds, and a protected cash tray with a security bracket make each kiosk a secure vault.
6. Compliance: ADA, PCI, and they are a certified encryption security organization.

The Bottom Line: A simple model with advanced security features presents a great value buy.

Triton

1. Partnerships: Triton does have an extensive distribution network, but its predominant partnership regarding Bitcoin is with Fintech Coinsquare. This allows Triton to piggyback off of their existing ATM networks to deliver cryptocurrency exchanges. Triton’s service chains are its true strength, stretching back to its time as Triton Systems (before Hyosung purchased it). Convert any regular Triton ATM into a cryptocurrency exchange with Coinsquare software.
2. User Design: Simple in design and execution, Triton holds more value with nostalgia when it comes to user design. Familiarity and recognizability with standard ATMs can give Triton an edge when compared to other Bitcoin kiosks.
3. Local Support: Triton offers real-time phone support, or they will connect you with a local technician through their extensive assist network. Triton also has a rapid turnaround for parts and repairs through its comprehensive reach with authorized distributors.
4. Warranty: New ATMs receive 13 months of worldwide warranty coverage.
5. Security: Triton has such a long history within the industry, which you can take comfort in. A variety of lock options and metal builds are available to you. Their software maximizes uptimes and has automatic recovery error to keep tight security. Triton is the “old faithful” of simple yet reliant ATMs.
6. Regulatory Compliance: ADA, ISO, PCI, TQM

The Bottom line: A long-standing partner in the ATM Business, turn any standard ATM into a safe bitcoin exchange.

There’s a lot to consider when purchasing a Bitcoin ATM. From upholding compliance, maintaining robust security, and selecting a manufacturer with the needed software partnerships, making the right purchase can feel daunting.

If you need more information on purchasing a Bitcoin ATM, or just need help to assess your business needs, please contact us here to request a consultation — we would be happy to assist you.

If you are interested in purchasing cryptocurrencies, this guide will explain all you need to know.

While investing in Bitcoin might seem like a tricky task, it is often much easier than you think! The world of decentralized and unregulated cryptocurrencies may have an element of novelty to them, but with a few simple tools: A hot wallet, a cryptocurrency exchange, and some internet connection, you could be the proud owner of digital crypto tokens. For all the details on what, how, and where you can buy cryptocurrencies with your USD, read this guide.

What types of cryptocurrencies can I buy?

There are over 4000 cryptocurrencies available as of 2021, from risky meme digital tokens like Dogecoin to stable, community managed, and developer built cryptography. The most common and popular cryptocurrencies (and often the most valuable) are:

• Bitcoin: The poster child (and most revolutionary) of cryptocurrencies is Bitcoin, developed in 2009 by the mysterious pseudonym Satoshi Nakamoto. It is the first peer payment network powered by its users through a public ledger system called blockchain, making digital money completely deregulated from traditional financial institutions. This means fewer fees, enhanced privacy, simple global exchanges, and more liquidity.

• Ethereum: Created in 2015 by Vitalik Buterin, Ethereum provides ether coins across a peer-to-peer network. Similar to bitcoin, it stores data information on a public blockchain, keeping the currency deregulated. In contrast with Bitcoin, Ethereum can deploy applications across its network, meaning you can add code and financial services. It is the worlds’ programmable blockchain, improving customer experience.

• Litecoin: Compared to other cryptocurrencies, Litecoin uses a scrypt to maintain better fraud control. It can also be decoded by standard, consumer central processing units (CPUs), which means that the transaction time is far shorter than Bitcoin or Ethereum. Merchants who value speed and security select Litecoin as their cryptocurrency of choice.

How do I choose which cryptocurrency to buy?

Selecting the right cryptocurrency ultimately comes down to your preferences, but think of these factors when making your choice:

1. Restrictions: Your geographic location will have several restrictions or compliance requirements for digital cryptocurrencies. Since cryptocurrencies are not centralized with governments, the line between legal tender is blurry. There are numerous payment service regulations that cryptocurrencies must abide by, such as MSB, AML, and KYC. Check your state regulations to make sure you can easily buy and sell the cryptocurrency you prefer.
2. Volume: The more overall volume that a cryptocurrency trades, the more liquidity you will have access to. Bitcoin (over a trillion in capitalization) and Ethereum (over 400 Billion in capitalization) are both major digital exchanges with simple access and value that is less volatile. Cryptocurrencies with an expansive market value offer you stability — so you can rest easy, knowing that when you buy or sell your coins, your order will be filled.
3. Security: Cryptocurrencies are digital money, and they all employ transaction encryption and time-stamped blockchain technology to store data. For the major digital coins, that means you can enjoy a high level of security. Still, over USD 3.8 Billion worth of crypto tokens were stolen by hackers in 2020. A little bit of research into lesser-known cryptocurrencies can ensure that your investment is secure. Pro tip: Only select cryptocurrencies with two-factor authentication.  
4. Price: Cryptocurrencies have no backed asset like fiat currencies, so their price can drastically fluctuate with market speculation, especially for less popular ones. Check the price index of your ideal cryptocurrency to make sure you are buying into a stable exchange. You do not have to buy an entire coin (e.g., A single bitcoin is worth over 60,000 USD) and can purchase smaller pieces (one-hundredth of a bitcoin is called a Satoshi). Select a cryptocurrency that can divide down to your desired budget.

What do I need to do to buy digital currency?

You might be surprised at how easy it is to log in and buy cryptocurrency. All you need are a digital hot wallet and access to the internet.

1. Select a hot digital wallet and wallet providerA hot walletis your holding center for your digital money. It stores on either your computer, an online software service, or a vault service protected by passcodes. You can get a hot wallet attached to a digital exchange, or you can open an account with a third-party service provider. Note that your Bitcoin wallet is not always the cryptocurrency provider, though many wallets and exchanges are linked together.
2. How to buy bitcoin or other cryptocurrencies You can now buy cryptocurrencies in a variety of ways: 
   1. Via credit card through centralized online exchanges
   2. Directly through a linked hot wallet
   3. Through a peer-to-peer trading platform
   4. From a verified, decentralized currency exchange
   5. Through a physical bitcoin ATM

Bitcoin ATMs are growing to become the most popular and convenient ways to buy and sell cryptocurrencies. With an easy customer interface, the ability to exchange fiat cash for bitcoin, secure partner networks, and quick transactions, it is no wonder there are now over 14,000 Bitcoin ATMs worldwide.

How to buy Bitcoin with an ATM

Buying Bitcoin through an ATM is a simple process, and it is very similar to the user experience of traditional ATMs. Once you pass the standard identity verifications, follow the on-screen prompts to buy or sell digital tokens with your hot wallet, credit card, or fiat cash (machine-dependent).

While many Bitcoin ATMs let you exchange Bitcoin without a hot wallet, it does give you a unique QR code when you complete a transaction. Store and keep that receipt QR code on hand until you need it again because the codes are like cash in hand. It is the digital representation of your money. If someone mugs you and steals the QR code, your cryptocurrency investment is gone.

For detailed and sequential steps on how to buy and sell Bitcoin through an ATM, check out our handy guide here.

Summary

With Bitcoin and several other cryptocurrencies growing in popularity, and with many merchants offering payment in digital money, there has never been a better time to buy and sell crypto tokens. If you want more information on accessing a cryptocurrency exchange or buying and selling cryptocurrencies through a Bitcoin ATM, contact AtmMachines.com, LLC here. We would be happy to answer any questions you might have.