Cryptocurrency ATM: Should You Add One to Your Fleet?

A cryptocurrency ATM is very similar to a traditional ATM. That’s part of what’s making them so popular. Their familiarity and ease of use lessen users’ apprehension and therefore draw more and more customers every year.  

You might already be familiar with cryptocurrency. You might buy and sell it yourself. If so, you might wonder whether adding a cryptocurrency ATM to your fleet is a good idea. Take some time to weigh the pros and cons when making your decision. 

New to cryptocurrency? Cryptocurrency ATMs are explained next!

What is a Cryptocurrency ATM?

A cryptocurrency ATM is an ATM machine that allows you to purchase and sell cryptocurrency. If you can picture a traditional ATM machine, you can imagine a cryptocurrency ATM machine. They look and function very similarly. And some ATM machines are converted to cryptocurrency ATM machines.

You might have heard of Bitcoin ATM machines, or BTMs/BATMs. It’s all the same. BTMs can be configured to enable all kinds of cryptocurrencies, not just Bitcoin. Some BTMs are unidirectional, meaning you can only use the machine to purchase cryptocurrency. Others are bidirectional. They allow you to buy cryptocurrency as well as sell it in exchange for cash.

BTMs do not connect to users’ bank accounts. Instead, users access their digital wallets from a cryptocurrency ATM. For many, this is much more convenient than suffering the longer wait times of online buying and selling. 

The United States leads the world with over 36,000 cryptocurrency ATM machines. That number has risen 8% since December 2021. Cryptocurrency is only getting more popular, and the need for convenient access is increasing. Should you join the cryptocurrency craze? Let’s take a look at some pros and cons of cryptocurrency ATMs.

Pros of a Cryptocurrency ATM

Easy to Use

First, a major draw of cryptocurrency ATM machines is that they are easy to use. This makes it a convenient service that crypto customers want and need. It’s important that people feel safe buying and selling cryptocurrency. BTMs provide them with the familiar comfort of a traditional ATM machine. A BTM transaction is similar to a regular banking transaction that most people understand.

Second, BTMs offer quicker transaction times than cryptocurrency trading websites. This offers customers a convenience they can only experience with a cryptocurrency ATM machine. 

These benefits support the need for more cryptocurrency ATM deployments.

New

BTMs are shiny and new! Those who aren’t already buying and selling crypto might see your cryptocurrency ATM machine, become curious, and try it for themselves. And guess whose machine they will use when they’re ready…. 

If you are an independent ATM deployer (IAD), adding a BTM to your fleet could set your business apart from the competition. You diversify your portfolio and have another service to offer customers, a one-stop shop if you deploy an ATM and BTM in the same area. 

If you are a business owner, having a cryptocurrency ATM in your business gives more people a reason to go there. You bring in more customers and passers-by when people hear that you offer BTM services. 

In either case, IAD or business owner, since BTMs are still relatively new, you could get ahead of the curve and corner the market for crypto services in your area.

Cash Recyclable

Some cryptocurrency ATMs are able to recycle cash. What this means is that the cash that users insert to purchase cryptocurrency can be the same cash that the machine dispenses to users who sell their cryptocurrency via your machine. 

Even if your BTM is unidirectional, and users can only purchase crypto from your machine and not sell it, the cash that users insert can be the same cash you use to reload your ATM machine. This can save you time and money working with a bank for your cash loading needs.

Secure

Cryptocurrency transactions are very secure with the help of blockchain technology. This is a large part of why more and more users are demanding more BTM deployments. Crypto users want a safe, secure, trusted way to buy and sell cryptocurrency. BTMs offer that with two-factor authentication and secure online transactions. BTMs can authenticate customers by ID, fingerprint, or QR code.

Profitable

There are many different ways to profit from a cryptocurrency ATM. The extra service brings locations more foot traffic, and you save money on credit card company and bank fees.

You also earn revenue from each cryptocurrency transaction made on your machine. Unlike traditional ATM machines, BTM transaction fees are a percentage of the transaction amount. However, with its popularity rapidly increasing, the BTM business can be quite profitable. 

Cons of a Cryptocurrency ATM

Equipment Costs

The first potential con to consider is the cost of equipment. Machines can cost as much as (if not more than) a traditional ATM machine. However, you can see about downloading software to an existing ATM machine that provides your ATM with cryptocurrency capabilities.

Niched Market

Cryptocurrency ATMs are much more popular in large cities like Los Angeles, Chicago, and New York. That is not to say that a BTM in your hometown wouldn’t do well. You just have to gauge the amount of need for the service in your area. Do you think you could bring in enough transactions each month to justify the time and money it would cost to operate it?

New Technology

Although BTMs are very similar to traditional ATM machines in structure and function, you still might experience a learning curve with the new technology. You have to consider whether or not you have the time to devote to learning the new technology, keeping up with changes, researching the fluctuation of transaction fees, and solving technological issues that could arise.

Different Compliance Rules

This may or may not be a con for you. You know there are certain rules and regulations you have to follow to operate an ATM machine, so why would a BTM be any different? 

BTMs are considered money services businesses (MSBs), so you have to register your business as such with the U. S. Treasury’s Financial Crimes Enforcement Network (FinCEN) when getting started. Then, you will purchase a custom-built Anti-Money Laundering (AML) program. 

Financial regulations are nothing new, and they protect you and your customers. These might just add a few extra steps and take some getting used to.

Should You Add a Cryptocurrency ATM to Your Fleet?

Unless you have any particular hang-ups about getting involved in cryptocurrency, it’s a good option to consider IF you find a promising location that justifies the cost of the equipment or software.

Like any business, there are certain risks involved in the decision-making process. You might risk your BTM not performing well. You might find that there isn’t the demand you thought there would be. However, this might just mean that your return on investment takes a little longer than you expected. If all else fails, remember that you can always try to move the machine to a better location! Like an ATM business, cryptocurrency ATMs are simple, flexible ways to generate passive income. Interested in learning more about your cryptocurrency ATM machine options? Talk to us today!