There is no doubt that the crypto ATM industry is growing quickly. That fact, along with the growing popularity in cryptocurrencies, it’s easy to see why convenient stores and local businesses are starting to take an interest in installing crypto ATMs at their store locations. If you are one of those businesses that is thinking about setting up a crypto ATM then there are a few items of business you’ll want to look into before doing so.
As bitcoin and other cryptocurrencies become more standard one thing is clear, governments will regulate the digital currencies. Crypto ATMs are no exception. In many areas you will need a special license (like an MSB) or other form of certification in order to operate the business.
CAUTION: Running a crypto ATM without complying with the law is a very bad idea. Make sure you understand the legal framework of the regions where you manage a crypto ATM.
If you are in the U.S. – Read this article to get a foothold on the laws surrounding crypto regulation. While the article does not give a comprehensive outline of all the laws of crypto (as they are ever changing), it will provide you with an introduction to federal and state regulation concerning crypto ATM business in the US. You may also want to consult with a lawyer before installing an ATM. Here is a list of international law firms that deal with the crypto market.
While starting a crypto ATM business yourself might take a lot of upfront work and a large financial investment on your part (creating a KYC/AML compliance policy, obtaining proper licenses) there may be a cheaper work around. If you approach another business in your local area you may be able to set up a collaboration. This may allow you work under their name and their legal license. To find another operator near you check out our crypto ATM location finder.
A prerequisite to owning a crypto ATM is opening a bank account. This may sound a little funny since one of the purposes of cryptocurrencies is to cut out the middleman. And it might be worth mentioning that the idea of an “unbanked” crypto ATM has already surfaced but has yet to come to fruition. So while this plan is still hatching you will need to open a bank account.
If you install a buy only crypto ATM you will definitely need to organize a cash delivery to the bank and you will need to make wire transfers from your bank account to replenish your crypto balance.
While cryptocurrencies are still in their infancy stage, not many banks want to be associated with parties that deal in the crypto space. It is a good idea to check available options in advance and to have several bank relationship to eliminate the risk of closing your ATM down. Here is a resource to help you find a bank that supports cryptocurrencies. The worse case scenario is to have a crypto ATM paid for but no bank wants to take you on as a client.
If you own a brick-n-mortar business than this won’t be an issue for you. Placing a crypto ATM might actually increase the foot traffic to your store and hopefully add an additional revenue stream to your shop.
If you are an owner of a brick-n-mortar shop and want all the foot traffic but don’t want the hassle of operating a crypto ATM, you can approach operators near you and suggest your location as a possible destination. Crypto ATM operators have reported that finding ATM-friendly locations are difficult to find so it is highly probable that if you approach the operators you will have favorable results.
If you plan on running a crypto ATM yourself, you will need to find a physical location for the machine. Important factors to consider include: traffic volume, easy accessibility, proximity to transport connection, good parking facility, hours of operation (the longer the better).
From the ATM locations listed on our site, here are the most popular sites:
- Restaurant – 12%
- Cafe/Coffee Shop – 9%
- BTC Embassy/Company Office – 7%
- Shopping Mall – 7%
- Supermarket/Food Store – 6%
Crypto ATM Type
Once you’ve got the appropriate license, have a bank account, and find the perfect location for your ATM, it’s time to choose which crypto ATM is right for you. There are two types of ATM categories: one-way or two-way. One-way machines only have the capability of selling cryptocurrencies for cash. Two-way allows the customer to buy and sell cryptocurrencies at the machine. About 42% of crypto ATMs are two-way and the 58% are one-way only.
According to data pulled from crypto ATMs, 90% of all crypto ATM operations are buying digital assets and the remaining 10% and selling. However, these numbers change during huge price dips. We are seeing that these numbers are equalling out so it might be worth the extra investment to have a two-way machine.
There are several crypto ATM providers in the market at the moment. While Crypto ATM Locator does not provide a comprehensive list of all the ATM providers, the providers listed have a positive and long track record in the market.
- Genesis Coin – Provides one-way solutions with the Satoshi1 for $6,800 and a two-way Satoshi2 machine for $2,100 more. There is also the old Genesis1 for $14,500.
- General Bytes – Provides a one-way crypto ATM called BATMTwo for $2,849 and two-way BATMThreeL (basic version) for $7,000. There are several different variations of the BATMThree model family depending on the hardware you choose.
- Lamassu – Provides one-way solution Douro for $6,500, additional Santo Tirso stand can be purchased to make it two-way for $5,500 more.
- BitAccess – Provides a two-way crypto ATM for $7,000.
Just as the prices of these ATMs vary greatly, the features do as well.
Volume and Fees
Before stepping into the crypto ATM realm, one should perform some preliminary profitability calculations in advance to have a good estimation of the profits and cost.
The following are average metics on the crypto market (based off of surveys answers from operators):
- In order to reach planned volume it takes about 6 months with diligent advertising of the location. If you’d like your ATM location to display on our website please reach out to us through our contact page <<INSERT SUBMIT NEW ATM PAGE>>.
- Average normal monthly volume of a crypto ATM is about $30,000. It may vary depending on several factors but this number is not lofty by any standards. If you need a basic forecasting number you can use $30,000.
- Average crypto ATM fees are now hovering around 5.5% for sell operations and 7.5% for buy operations. Note: these fee numbers are based on operators who have decided to reports their numbers. Those who charge higher fees opt out of reporting their respective numbers.
When you run a crypto ATM it is very important to provide valuable service to customers. Operators have to monitor whether machines are operational and bitcoin funds are in place.
Since many people have their crypto accounts linked to their email address it is advantageous to provide a place where they can login to their email account.
Recently, ATMs have implemented a voting functionality which allows customers to give feedback.
We hope this article helps as you look into managing/placing a crypto ATM in your store location. If you have further questions, you can search our article section to search for an answer.