While there are many folks interested in becoming Bitcoin ATM operators, most of them have no idea where to start. The good news? Setting up a Bitcoin ATM business is actually pretty simple. In this article, we’ll cover the 4 steps required for setting up your own Bitcoin ATM business so you can be up and running in no time.
Step 1: Determine local regulations in your area
It is important to be aware of any regulations pertaining to Bitcoin ATMs in your area. Some jurisdictions will require a Money Services Business (MSB) registration, or other forms of licensing and/or permitting before your business can begin operating. Knowing and complying with all relevant regulatory requirements from day one is essential to creating and growing a sustainable business.
Specific regulations will vary by location. Consider seeking out professional assistance to ensure your BTM business is fully compliant.
Step 2: Choose the right bank to work with
You’ll need a bank account to operate a Bitcoin ATM. This is the account you will use to deposit cash from the machine to wire to exchanges, which can then replenish the Bitcoin ATM’s hot wallet with BTC, which is sent to the customers buying bitcoin.
There are some banks which are not willing to work with cryptocurrency-related businesses, and unfortunately this can apply to Bitcoin ATM operators as well. You will have to do some research on which banks in your area are able to provide banking services for your operation.
It is important to try to build relationships with multiple banks. This redundancy will prevent you from having to shut down your Bitcoin ATM business in case one bank decides to stop working with you. Some services like BankLine actually specialize in helping operators find banks willing to work with them.
While this might seem concerning, it is important to note that the Bitcoin ATM industry continues to grow at a rapid pace. The general trend is positive, and banking solutions continue to advance with industry development and increased demand.
Step 3: Choose a wise location for your Bitcoin ATM
This is an important factor that should not be overlooked. In fact, it might be the single most important factor determines whether or not your business will be successful. Ultimately, the transaction volume per machine is what will make or break your bitcoin ATM operator business. You can have two identical machines, and one may dramatically outperform the other simply because it is in a better location. How you approach this will depend on whether or not you already own a physical business, or intend to seek a place to host your machine.
If you are the owner of the business with brick and mortar locations, placing a Bitcoin ATM in your location can increase foot traffic, while adding another revenue source. Using your own location can keep costs down and let you adapt the business to compliment your existing enterprise.
On the other hand, if you don’t have a brick and mortar location of your own, you can approach another business and propose a hosting arrangement. The simplest way to do this is offering to pay a flat monthly rate to rent out floor space for the machine. This is a win-win arrangement for both parties: you get a place to host your bitcoin ATM, and the business owner earns rental income from underused space in their location. This is a very common practice, and many successful bitcoin ATM operators have machines hosted in different locations.
If you choose to go this route, it is important to be aware that certain locations will outperform others. Some of the more popular locations include:
- Convenience stores
- Small retail stores
- Coffee shops
- Restaurants and bars
- Bitcoin embassies
It’s not required that your machine be in one of these places, these are just where bitcoin ATMs are most popular at this time.
Regardless of which path you take, the most important factor to consider for your bitcoin ATM location is accessibility. How easy is it for customers to get to the machine? Can it be reached by highways and public transportation? What about the opening hours at the location where the machine will be hosted? These are factors you must research before choosing a place to host your machines.
It’s best to have at least one location tentatively on board before ordering your first machines, so you can be up and running as soon as possible when they arrive.
Step 4: Pick the Bitcoin ATM model that’s right for you
Running a bitcoin ATM business should be rewarding, not stressful and confusing. While immediately seeking out the cheapest or most feature-laden product can be tempting, you will need to think ahead and carefully consider your needs both today and as you grow. That’s why it’s important to choose a Bitcoin ATM provider that offers high quality hardware, a scalable software solution and good customer support as well.
Bitaccess offers a complete, turnkey system for setting up a Bitcoin ATM business. It’s a hardware, software and service platform which includes compliance features tailored to your specific location. All Bitaccess BTMs are also “two-way” by default, allowing them to support both buying and selling bitcoin. BTMs can also offer additional currencies (“altcoins”) to reach a wider audience.
Having all of this taken care of allows you to focus on offering value for your customers and scaling your business, instead of stressing over complicated technical issues
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In our next article, we’ll take a look at the bigger picture of the ATM industry. We’ll show you where it’s headed, what you can expect in the next few years, and why now might be the perfect time to become a BTM operator.