With an increasing number of merchants accepting cryptocurrency as payment these days, Bitcoin ATMs now provide a convenient way for customers to buy and sell Bitcoin. ATMMachines.com offers sales and placement of Bitcoin ATM Machines, which allow users to buy and sell Bitcoin (BTC) and other cryptocurrencies. Contact us to learn more about the benefits of installing a Bitcoin ATM in your establishment.
What is Bitcoin?
Unlike U.S. dollars (USD) or Euros, Bitcoins and other forms of cryptocurrency aren’t printed or minted money, but rather a decentralized form of digital currency created and held electronically through a public ledger. There is a finite number of Bitcoins (about 21 million), and the increasing scarcity has driven up the value of Bitcoin over the past few years. Cryptocurrencies have several advantages, including no fees, lower international transaction costs, and top-notch identity protection.
What are Bitcoin ATMs?
Similar to standard ATMs, Bitcoin ATMs are digital machines that allow users to transfer or exchange cryptocurrencies financially. Made for public use, a customer can buy bitcoin using fiat currencies. In some instances(i.e., cloud ATMs), users can convert bitcoins held in a digital wallet into cash of different denominations.
What are the different types of Bitcoin ATMs?
There are two types of Bitcoin ATMs: Unidirectional and Bidirectional. Unidirectional ATMs can only buy Bitcoins, while bidirectional ATMs allow users to buy and sell crypto tokens in exchange for fiat currencies.
How do Bitcoin ATMs work?
Bitcoin ATMs do not connect to standard banks or financial institutions. Instead, the internet kiosk connects you to your digital wallet and a cryptocurrency exchange where you can buy and sell bitcoins. To use a Bitcoin ATM, you first need to verify your identity through the standard two-factor authenticators. Once you have logged in, you can buy or sell bitcoins for cash (machine-dependent), with most of the transactions receipted on a QR code attached to your digital wallet.
The Growth of Bitcoin ATMs and the Bitcoin ATM business model
As Bitcoin grew in popularity, and as the value of the bitcoin drastically increased compared to the American dollar, businesses started to cater towards the demands of users who wanted to pay for goods and services with cryptocurrencies. Several early adopters created business-to-consumer debit machines to meet consumer demand (and to take advantage of lower transaction fees outside of traditional finance institutions). Soon, physical ATMs that could exchange Bitcoin into fiat cash provided a level of convenience for those who used cryptocurrencies, all while giving entrepreneurs a new method of income. Bitcoin ATMs popped up in grocery stores, casinos, and gas stations as physical exchange points.
How much commission can I make from a Bitcoin ATM?
Most Bitcoin ATM entrepreneurs earn 5-10% commission on each transaction. Transaction volumes can reach up to $30,000 a month.
What are the costs of starting an ATM business?
Fees will range based on your location, state regulations, and machine purchased. Machines can cost as high as USD 10,000. You also need stock liquidity for each exchange, there may be fees when exchanging fiat currencies to bitcoin, and you might need to pay legal fees for licenses.
What are the legal regulations on Bitcoin ATMs in my area?
Cryptocurrencies are not legal tender, so they have no monetary jurisdictions. That said, Bitcoin ATMs are considered payment services, and they fall under MSB, AML, and BSA compliance rules. FinCen from the U.S. Treasury Department governs these regulations. Check your local state requirements for additional compliance requirements.
What bank account do I need to get started?
Since Bitcoin is deregulated, many traditional banks will “de-risk” and limit business transactions with Bitcoin ATM owners. Search for a bank that will allow you to connect your accounts to a Bitcoin hot wallet (the digital wallet that replenishes cash for bitcoins and vice versa as customers make exchanges).
Where should I put my Bitcoin ATM?
Location is one of the primary factors that can determine the overall success of your ATM. Look for areas that include high levels of foot traffic, and if you do not own the physical locations, consider the cost of the rent.
Popular locations include:
- Restaurant/pizzeria 12%
- Cafe/coffee shop/gelateria – 9%
- BTC embassy/company office – 7%
- Shopping mall – 7%
- Supermarket / food store / Deli – 6%
What Are The Benefits of Installing a Bitcoin ATM?
- Increase in Foot Traffic: If you already have an existing store or physical location, expect sales to increase. You can access an entire market share of cryptocurrency users, all while boosting customer engagement.
- Generating Extra Revenue: Collect a far higher fee for each transaction when compared to traditional ATMs, with no additional costs from credit card companies, banks, or financial institutions.
- Customer Convenience: Offer near-instant financial transfers to customers who value privacy and trust. That level of trust and convenience will boost store traffic, transactions, and overall traffic.
- Supporting Community Adoption of Bitcoin and Other Cryptocurrencies: Bitcoin disrupts centralized institutions. A bitcoin ATM installation allows the greater community to enjoy the benefits of cryptocurrencies, such as easier global transactions, enhanced privacy, reduced fees, and greater liquidity.If you are interested in installing a cryptocurrency ATM in your business, contact ATMMachines.com to learn more about how to acquire an ATM equipped with safe and reliable cryptocurrency software.
Bitcoin ATM FAQs
Depending on the Bitcoin ATM manufacturer and their software partners, Bitcoin ATMs have transaction limits that range from $100 – 3000 USD per day to USD 10,000 per week.
The profitability of your ATM will depend on the costs, fees, locations, maintenance, customer usage rates, transaction amounts, rent payments, and machine type. Many operators report breaking even after six months.
The following steps can help you get started:
- Discover your state regulatory and compliance guidelines
- Find several banks that will accept cryptocurrency transactions
- Select or rent an optimal location to place your ATM
- Purchase the right Bitcoin ATM for your business
At the moment, no, but there are Bitcoin software manufacturers who are developing or have developed limited API platforms designed to facilitate cryptocurrency exchanges on standard ATMs.
Bitcoin operators earn on average 7% in commission, far higher than the standard 1-3% of standard ATM fees. You can set higher fee percentages if desired.
While the customer experience is quite the same, ATMs connect and are regulated by traditional financial institutions. In contrast, a Bitcoin ATM connects to a digital wallet and an internet-based cryptocurrency exchange.
While it is impossible to discover exact consumer interest, the volume of Bitcoin use (average of 3 million transactions a day), the increase in manufactured and installed Bitcoin ATMs, the prevalence of Bitcoin wallets (64 Million Wallets), and the rapid expanse of crypto platform exchanges (Cryptocurrency market project to hit 1,758 million in capitalization by 2027) all speak to the swift growth of consumer demand for physical Bitcoin exchanges.
As of January 2021, statista.com reports nearly 14,000 ATMs in use worldwide.
The first Bitcoin ATM was a Robocoin machine installed at Waves Coffee shop in Vancouver, Canada, on October 19, 2013.
Cryptocurrency transactions are highly secure thanks to blockchain technology. Likewise, cryptocurrency ATMs are equipped with numerous fraud protection protocols, including protocols like Anti-money laundering (AML), Know Your Customer (KYC), and more.
As a digital form of currency, cryptocurrencies were naturally used mostly with online transactions. They are great for international transactions because they require no exchange rate. They are also popular in places like dispensaries, where credit or debit card purchases are either not allowed or inconvenient. That said, a growing number of mainstream merchants now accept Bitcoin, including some national food chains and brick-and-mortar retailers.
Just as you keep your cash in a physical wallet, cryptocurrency is stored in a digital wallet. When you buy Bitcoin for the first time, you will set up a digital Bitcoin wallet that updates your current amount every time you buy, sell, or spend Bitcoin.
The blockchain is a public database technology that instantly updates at all points across a given network. Blockchain technology serves as the public ledger on which all Bitcoin transactions are recorded. Using this open technology to record and update transactions offers a greatly reduced risk for fraud, making cryptocurrency transactions more secure.
Bitcoin (BTC), Ethereum (ETH), LiteCoin (LTC), and other cryptocurrencies are essentially just different types of digital currency, not unlike the differences between traditional currencies like US dollars, Canadian dollars, Euros, or Yen. They all serve the same basic functions but have different degrees of value, just as different currencies have fluctuating exchange rates.
If you are interested in installing a cryptocurrency ATM in your business, contact ATMMachines.com to learn more about how to acquire an ATM equipped with safe and reliable cryptocurrency software.