Experience of running bitcoin ATMs by Gil Valentine from Athena Bitcoin

The following video from Chicago meetup in beginning of 2017. Gil Valentine, one of the founders of Athena Bitcoin, gives a presentation about their experience of running bitcoin ATM business.

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At the moment of presentation (March 2017) Athena Bitcoin runs machines in 7 different states and 12 metro areas.

Scams alert

One of the experiences they had are scams organized via bitcoin ATMs:

Athena Bitcoin Presentation -- Scams

Customers were asked to deposit money at machine in promise to get product / service in the future, e.g. buy a car at very low price, get employment etc. Bitcoin ATM operator returned more than $30K in funds over 6 months as refunds to such customers. Implementing scam prevention system is very important. Usually operators put on hold large transactions of newly registered customers and get in contact with them to verify, whether they buy bitcoins for themselves or were victims of known scam schemes. This brings an inconvenience for real users, however, saves a lot of money for company and saves people from getting scammed.

Regulation and bank relationships

One of the aspects of running bitcoin ATM is that you need to be properly registered in certain jurisdictions (MSB, money transmitter). And one of the largest problems of bitcoin ATM operators is finding a bank that will agree to provide access to financial services.

When bank representatives, especially BSA (compliance) officer, hears a word “bitcoin” they discontinue discussion. Twice hard to find a bank if you have “Bitcoin” in your name, like with Athena Bitcoin.

Bitcoin ATM regulation / banks

Customers metrics

Although there is a common belief that absolute majority of users are male, it is not fully the case for Athena Bitcoin (>20% are female). More than half of all users are unbanked or underbanked. This makes characteristic of Bitcoin as digital cash more important, as it will allow those users to get access to financial services without banks.

Although many customers are privacy oriented, practically all don’t mind sharing ID when they are explained that the process needs to follow KYC rules.

Typical customers of bitcoin ATM

Use cases

Many users use bitcoins as a remittance medium. Some customers were purchasing before travelling, so they could cash out in other countries in local currency. Many customers pay for goods and services, especially online. Some purchased bitcoins as a form of investment.

Bitcoin ATM use cases

Interesting use-case, when user was buying bitcoin in order to pay to suppliers in India for hair supply. Although machine charges 10% on top of price, customer was able to save 60% on purchases by establishing relationships with suppliers, which could not accept credit cards for example.

See original article here
Author: CoinATMRadar”