Since Bitcoin’s beginnings in 2009, the currency has rapidly picked up steam, garnering the attention of everyone from investors to retailers to consumers. As a result, the demand for Bitcoin ATMs, tools which enable easier Bitcoin purchasing, has risen.
Bitcoin ATMs or BTMs are already spreading across the U.S. and the world. Retailers however, might be wondering if Bitcoin ATMs are right for them. To uncover the answer to that question, we will need to take a look at the origins of BTMs, some challenges they have dealt with, and what opportunities they provide.
Bitcoin ATMs first began showing up in 2013 and 2014, with the very first one appearing in a coffee shop in Vancouver, Canada in 2013, according to a report by the BBC. America followed suit, with the first Bitcoin ATM showing up at a cigar bar in Albuquerque, New Mexico in 2014. However, it didn’t last long as it was removed 30 days after its initial deployment, according to a report by CNET.
Bitcoin ATMs have grown far beyond their humble origins in 2013, as there are now more than 14,000 such devices in the world, according to Statista.
Bitcoin faced a multitude of challenges from the moment it first emerged in 2009. On one level was simply lack of understanding or knowledge as to what exactly it was. On another level, there were also issues with finding resources on how to properly acquire and use Bitcoin.
Bitcoin also faced a major reputation problem, as many associated it with crime, since many hackers, drug smugglers and money launderers used it for its less traceable nature.
“As a Bitcoin ATM Operator, some of the challenges in the beginning were understanding the new technology behind Bitcoin. It was still so new that resources for learning were limited. Another major challenge was educating retailers on the benefits of hosting a Bitcoin ATM in their stores,” Ayman Rida, CEO, Cash2Bitcoin, said in an email.
In recent years, however, Bitcoin has had many new opportunities to flourish, and along with it, so did Bitcoin ATMs. For example, its value has exploded in recent years, going from a few dollars to now well over $50K, according to Coindesk’s bitcoin tracker.
“Bitcoin is becoming more acceptable by financial institutions and corporations as it recognized as a legitimate asset class. Bitcoin has outperformed every other asset class in the world over the past decade. As more companies adopt Bitcoin acceptance, transactions will increase, which in turn, will expand Bitcoin ATM deployment,” Rida said.
Bitcoin ATMs are also seeing a big uptick in business since COVID-19 started, as many customers invested their money into Bitcoin due to economic uncertainty.
“We have seen an increase in sales since COVID-19 started. In fact, most of our growth happened during the pandemic,” Rida said. “Consumers were buying more Bitcoin than ever in 2020, probably since spending options were limited due to stay at home orders. So far 2021 has seen especially high sales again.”
Retail makes it big
Rida has watched the industry grow since Cash2Bitcoin launched in 2017 in Detroit. His team has installed Bitcoin ATMs in 10 states, and Rida believes one of the draws of Bitcoin ATMs for retailers is that is a hassle-free product with zero maintenance required on their end.
In addition to these benefits, Bitcoin ATMs can also help boost the bottom line for retailers.
“Retailers will see an increase in traffic to their stores. They will also see new faces because we have seen customers drive as far as 1.5 hours to come to our Bitcoin ATMs,” Rida said. “We do see a large amount of repeat customers coming back to the same location. This benefit is in addition to the monthly compensation retailers earn for hosting Bitcoin ATM.”
A Cash2Bitcoin client mentioned that the Bitcoin ATM has already made them a lot more money than the newspaper stand that was previously in its place.
Retailers also receive a big financial benefit from Bitcoin ATMs, since they get a flat monthly rate regardless of the number of transactions.
“With traditional ATMs, the merchants earn profit based on the number of transactions so if they don’t get a lot of customers using the ATM, the merchants don’t make a lot of money. With Bitcoin ATMs, merchants are paid a flat monthly rate even if transaction and sales volume are low,” Rida said.
However, some retailers may be concerned that they may have to do a lot of work to keep the Bitcoin ATM up and running. With Cash2Bitcoin, however, the process is a lot easier.
Cash2Bitcoin’s website emphasizes that retailers don’t have to handle any of the backend operations such as maintenance or customer service, since it handles all of that.
“Our ATMs take up very little floor space and don’t require any of your attention. We do all of the dirty work,” Cash2Bitcoin’s website states.
What about the consumer?
Some retailers may ask what benefit there is for its actual consumers. Why would they want to use a Bitcoin ATM?
Rida emphasizes that cryptocurrency is a great investment for consumers. “History has proven that the value of Bitcoin is on the rise and has become a leading choice for both consumer and corporate investors. Cryptocurrency also provides services for the underbanked and for those who do not have access to a bank account.”
Furthermore, the cryptocurrency itself has advantages over cash and checks.
“Cash has to be backed by a central authority, Bitcoin doesn’t,” Rida told ATM Marketplace. “That’s what makes it more attractive than cash. Rida also asserts that consumers will be interested in using Bitcoin ATMs due to the ease of use and quick delivery of the cryptocurrency. “For consumers, the benefit of purchasing cryptocurrency from a Bitcoin ATM is receiving their coins instantly.” According to Rida, Bitcoin ATMs have advantages over online exchanges and traditional ATMs as well. For one, Bitcoin is not regulated by any ATM networks such as Star, Pulse, Visa and Mastercard, so the process is smoother than other transactions. Bitcoin can also be approved far faster with an ATM than with an exchange.
“When dealing with an online exchange, the approval process takes a while and you don’t have access or control of the cryptocurrency for days or even weeks. When a customer uses a Bitcoin ATM, there is no delay waiting for the compliance process,” Rida said. “We do the compliance right on the spot so the customer gets an automatic transaction in the moment and they get the coins in just minutes.”
With all that being said, it’s easy to see why Bitcoin ATMs can be a major boost for your business and your consumers. It’s easy and generates a great deal of extra income for your business. Also, Bitcoin ATMs are on the rise, and they show no sign of slowing down. Now might be the best time to try one out for yourself!