In this video, you will hear first-hand experience form Matt who owns a chain of stores and decided to include Bitcoin ATM’s. He will try to get into a little more depth on the two different types of structures that most Bitcoin ATM companies have, and also which model he thinks is the best to chose going forward.
Before he decided on the operator, he reached out to three or four companies. Although the contract he signed is confidential, he will let us know a little bit about the different sorts of structure and how different companies operate the Bitcoin ATM machines. There are some basic structures that they all follow when offering their services to store owners.
Option 1: Rent a place to operator
One of these structure types is that you absolutely have no stake in the machine. You are getting a fixed amount of money per month just for having the machine in your store. This works out great for people who have convenience stores, gas stations or small retail stores and have no interest in the machine or what it’s about. It is a great way to bring extra foot traffic to the store and get anywhere from a hundred to several hundreds of dollars per month. It is completely hands-off. The machine gets dropped off to your store, you just plug it in and collect the money for hosting the machine. Ideally, you see the benefit in collecting rent and increased foot traffic of people coming in just to visit the machine and, hopefully, patronize your store.
Option 2: Buy ATM and operate yourself
On the other hand, you can buy the machine directly from the manufacturer or a reseller which basically makes you an owner-operator and you have to do pretty much everything with the machine. First of all, you have to pay the upfront cost for the machine. Then you need to set up all the wallets, fund the wallets and keep them funded. You have to handle cash logistics which means to get the money out of the machine or put the money in the machine if it is two-way. You need to get the money transmitter licenses that differ from state to state and are held on a federal level. That is something Mat did not want to be a part of because he thinks that putting your signature on that kind of forms opens you up to a lot of vulnerability. So, he really wanted to find a company that handled all of the licenses. Of course, there is a lot more upside when you are doing it by your self because you can control the fees and you can potentially make a lot of money here, especially if you are the only machine in town. But on the other hand, funding the machine and putting your signature on the transmitter licenses exposes you to greater risk. In the end, you have to weigh the pros and cons and make the decision.
Option 3: Hybrid model
But then there is the middle, the direction in which Matt thinks the industry is heading as a whole, a hybridization. Matt, like most small independent operators, wants to spend as less time as possible dealing with the government agencies because it is just so time-consuming and of course, costs money. But, he is aware of the potential upside of having an ATM in the store and is not willing to take the monthly fee, even if it is a thousand dollars. So, he wants to take a bigger cut of those fees and for that, he is willing to pay a partial price for the machine. That way he will incur more risk by financing the machine, but the company will handle all the legal stuff, so he will have no part in that. Of course, since the risk is shared, the cut is smaller, but the upside is still bigger than taking the monthly fee.
In the end, Matt emphasizes the importance of mass adoption of the cryptocurrency and marks the ATM machines as the frontline of promoting the cryptocurrency to everyday people. He also states that we also need to make the crypto as easy as possible for those people since they have a crucial role on that path. It is annoying that there are a lot of developers and crypto gurus that have a kind of elitist stance and mentality. They do not want noobs coming in unless they’re gonna take the time to learn the cryptocurrency in detail and get familiar to all of this overly technical jargon. He insists that this kind of behavior is ridiculous because if you want to see crypto upsetting banks and major financial institutions then you need the noobs and the everyday people to come in and put their money in, and they are not gonna do that if they need to acquire a degree on blockchain to get involved.