By Brandon Mintz
Bitcoin Depot
The surge in cryptocurrency adoption is unmistakable, and for retailers and investors this trend opens up new business avenues, such as hosting a Bitcoin ATM, also known as a BTM, in-store or investing in a BTM operation as a franchise operator.
BTMs provide customers a convenient way to buy bitcoin, and the foot traffic they attract provides retailers with an opportunity to increase revenue. Of course, not all BTM operators are created equal, and the market has a varied range of BTM operators. Currently, according to Coinatmradar, there are 215 BTM operators in the United States, with 79 percent of all domestic BTMs being operated among 10 companies.
The hardware and software components of a BTM are the heart of the machine. Reliable and well-maintained hardware ensures smooth transactions, reduces downtime and minimizes maintenance costs. Similarly, the associated software must be steadfast, intuitive and receive regular updates to enhance features and security measures.
Dozens of hardware and software options are available, but according to Coinatmradar.com, the top three software providers make up most of the market with roughly 25,000 BTMs on their platforms. Hardware providers include manufacturers such as Genmega that already produce kiosks and ATMs for other purposes, as well as Bitcoin-specific kiosks.
In addition, other manufacturers only produce BTMs and no other kiosks or ATMs for other industries.
One of the leading software providers Bitaccess has had BTMs operating on its platform for around 10 years. The company provides support for multiple types of hardware and has had dozens of operators using its software for many years.
The first consideration when choosing a BTM provider is its commitment to licensing and regulatory compliance. Partnering with an operator registered with FinCEN as a money services business and licensed in all jurisdictions where it is required will help ensure that BTMs in your retail partners' locations operate legally and adhere to all local and federal regulations. Compliance is crucial in protecting your business, as well as your merchants and their customers.
The seriousness of anti-money laundering (AML) and know your customer (KYC) regulations cannot be overstated. A reputable operator will have a full-time compliance officer with supporting staff, conduct transaction monitoring, and report suspicious activity. AML and KYC procedures help verify the identity of customers while preventing suspicious transactions from happening as much as possible. Robust compliance measures protect all stakeholders and the integrity of the cryptocurrency ecosystem as a whole.
Additionally, these measures along with additional scam and fraud prevention policies serve as a way to protect customers from criminals. Reputable BTM operators work to prevent this by implementing practices that make it harder for illicit activities to occur at their machines. These include, for example, scam warnings on BTM screens and not allowing customers to send to a wallet owned by a third party.
A BTM operator should have stringent data security protocols in place to protect sensitive customer data. Doing so will have a twofold effect: First, it will create a sense of trust and transparency between the operator and the customer; second, it will reduce the likelihood that a customer gets hacked or scammed. Diligent record-keeping of transactions for AML and KYC purposes is vital for potential audits and contributes to industry legitimacy.
Choosing an operator with an established reputation and a trusted brand presence in the industry will go a long way in boosting a retailer's profile and attracting customers. Many consumers return to what they know and recognize, so it’s best to partner with an operator with strong name recognition nationwide.
Even more importantly, you’ll want to ensure your operator of choice has the marketing expertise and resources to drive traffic to their machines and, by extension, your merchants' stores. The largest operator of BTMs in the United States has over 6,000 BTMs in operation and will likely receive significant name recognition, contributing to higher numbers of transactions than a smaller BTM operator.
An extensive, agile customer service team is invaluable. The right BTM provider should offer exceptional customer support to aid users with their cryptocurrency transactions across multiple channels such as phone, email, text and live chat. A user-centric interface enhances this support, ensuring a smooth operational experience. Evaluate the provider's support in setting up and maintaining BTMs.
Another critical area to consider when choosing a BTM provider is its installation and maintenance support. Some providers offer this type of assistance, while others expect the retailer to help handle this task. In addition to installation, ask about maintenance support offered by the provider. No one wants a machine in their store that’s continually breaking down due to a lack of routine maintenance. A reliable machine that runs smoothly keeps everyone happy.
These measures go hand-in-hand with compliance in that they all offer a safeguard to your business, merchants in your portfolio and their customers. Security features include data encryption, physical security functionality and user authentication. A secure BTM is one that protects against fraud and enhances trust among users.
Some physical security measures on BTMs include additional exterior bracket or belt locks. In some high crime areas, a steel enclosure wrapped around the BTM could be necessary.
A seamless, positive user experience is key to customer satisfaction and repeat business. Look for a provider whose interface is clear, accessible and multilingual to accommodate a broad user demographic and promote inclusivity. As bitcoin usage continues to grow worldwide, it should be expected that a more diverse user base will make use of BTMs. As a result, it’s critical that BTMs employ multi-language support to enhance inclusivity.
Doing so allows operators to accommodate users who may not be fluent in the local language and is especially important in areas with culturally diverse populations.
Quick and smooth transactions are the hallmark of a positive customer experience. Speed is crucial in the verification process. Since BTMs must adhere to regulatory requirements, efficient identity verification is essential for user convenience and reduced waiting times.
Providing quick verification makes the bitcoin buying experience more pleasant.
To accomplish this, a BTM must employ a high-quality scanner and compatible software capable of quickly processing government-issued documents like passports and driver's licenses.
Some of the larger BTM providers use automated document verification software from sophisticated third-party compliance software companies to quickly verify identity documents without needing a physical human to review them.
Delays in these and other processes can create user frustration due to longer wait times, which could lead to users leaving store locations and causing BTM operators to lose business. 
Brandon Mintz is the founder, president and CEO of Bitcoin Depot, https://bitcoindepot.com/, a leading BTM operator with the largest network of BTMs deployed in North America. Fostering an entrepreneurial mindset from a young age, Mintz was an early adopter of cryptocurrency and is a vocal advocate for simplifying its access for everyone. While attending the University of Georgia, he started his first cryptocurrency company, and in 2016, he established Bitcoin Depot with a mission to bring cryptocurrency to the masses by providing the most secure, convenient and speedy process to convert cash into cryptocurrency. Contact him via LinkedIn linkedin.com/in/brandonmintz or https://bitcoindepot.com/contact-us/.
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