Investors are naturally becoming more exposed to the thrill and excitement of buying and trading cryptocurrencies. These digital currencies that many dismissed in the past are now gaining plenty of traction today, primarily due to regular takes on social media and news networks. After all, the promise of hitting gold is similar to waging a stake in the lottery.
More and more establishments are accepting well-known cryptocurrencies as payment. In theory, this could be a more profitable investment. However, it’s still necessary to reinforce effective payment processing systems. Since cryptocurrencies are more complex than conventional wire transfers, making the right accommodations for your customer base is essential. For this reason, bitcoin ATMs are becoming more common in establishments that take cryptocurrency for payment.
?Understanding Bitcoin ATMs
Unlike traditional automated teller machines (ATMs), Bitcoin ATMs don’t dispense cryptocurrencies from a cryptocurrency wallet. Instead, they function more as shopping kiosks to allow investors to perform blockchain-based transactions. They can use these kiosks for buying or selling bitcoin and typically use QR codes to send and receive tokens from different users’ digital wallets. They’re a great addition to any establishment looking to prepare for the crypto-leaning client base.
Through scanning a QR code corresponding to their bitcoin wallet address, they can transfer and purchase coins. Additionally, buyers without a wallet of their own can get a newly generated wallet almost instantaneously after their purchase.
Providing Security Measures
Most bitcoin ATMs contain a lower and upper limit to the amount that can be deposited. Additionally, bitcoin ATM operators in the US must sign up with the Financial Crimes Enforcement Network. This is a precaution to prevent money laundering activities that violate the Bank Secrecy Act (BSA).
Depending on the transaction performed, a bitcoin ATM may request government-issued identification before confirming a transaction. Although the security provisions seem restrictive, this is a necessary measure for the safety of all parties involved.
Assessing a Bitcoin ATM’s Service Fees
Users of Bitcoin ATMs generally pay for a service fee as a percentage of the transaction instead of a fixed value. Since cryptocurrencies vary in value, this is seen as the fairest solution. Nevertheless, the Consumer Financial Protection Bureau (CFPB) warns that users of bitcoin ATMs can expect considerably high service fees.
Projecting Cryptocurrency’s Impact on Local Establishments
Like any investment, cryptocurrencies naturally have a risk factor attached to them. Its transparency and freedom from regulation may be appealing to some, but it’s never a sure investment. Nevertheless, this variable isn’t stopping businesses from accepting it as a viable form of payment for products and services.
The initial spread of Bitcoin ATMs from last year will only grow as businesses based on cryptocurrencies will want to offer their own trading platform or wallet. This is why Bitcoin ATMs will be more common, similar to how banks install traditional ATMs to complement their services. With over 9,000 kiosks by the fourth quarter of 2020 alone, the spread and use of these digital kiosks may soon be an ordinary sight in the US.
Although there’s no consensus yet on the reliability of cryptocurrencies, its recent track record makes it clear that crypto is here to stay. With digital transactions being formalized through hardware like Bitcoin ATMs, the accessibility to this economy will naturally be embraced by a wider demographic.
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