Bitcoin Forum

Hi, I am hoping to get the community opinion on the commissions collected by bitcoin ATMs on fiat to bitcoin transactions. XBTeller recently installed its first bitcoin ATM in Denver, CO, with several more in the pipeline. We want to make sure our service is an attractive option to people looking to buy and sell bitcoin. https://xbteller.com/ (https://xbteller.com/)

To avoid an argument over the definition and appropriate use of the phrase ATM, let's agree that the term doesn't exactly fit as they are actually automatic currency exchange machines. But, for the sake of convenience, ATM is fine. We all know what we're talking about.

QUESTION: What % above the Bitstamp spot price is appropriate for ATM operators to collect? U.S. customers, consider the time and money saved not having to wire money to an exchange or deal with third parties in the case of Coinbase.

Thanks a lot for your input.

first question why mention its using bitstamp + spot.

what most smarter people do is find a reasonable priced exchange (secretly higher than bitstamp) and just quote that price.

EG last yeat btc-e was the lowest price and mtgox was the highest, so people just said they were converting at gox price, while secretly swapping at btc-e and keeping the difference.

that way it appeared to the consumer they were not paying fee's, thus staying within the whole "zero to low fee" bitcoin advertising that goes around. as soon as you mention +1% to 5% it turns people off the idea of bitcoin.

If it is not a two-way machine, you may want to consider calling it a "bitcoin vending machine", which will hopefully avoid some regulatory requirements.

I would prefer it if the mark-up is disclosed myself. However, the larger the mark-up, the less often I will use the ATM. The robocoin machine I could not use locally charges 6%. The Bitcoin vending machine I ended up using charged 9%.

First, thank you for explaining that in order to provide a service to consumers one must be smart enough to lie and deceive.
My question was not "how to best fleece consumers into using a bitcoin ATM by hiding the fact that they charge fees?" But I certainly know where to turn when that comes up.

It just so happens that transparent pricing without deceptive marketing tactics is something that many smarter consumers look for. But thanks anyway

Yeah. It really bothered me that I paid 2% more than I thought I would right before Bitcoin jumped 500%.

As I mentioned, I'm not at all interested in a debate over what to call them. But consider that regardless of being a 1 way machine or a 2 way machine, they aren't ATMs. Also that traditional banking ATMs are mono-directional more often than not.

Not disclosing the mark-up isn't an option. It's a bullshit way to do business. And were you pleased with the 9%?? Seems unreasonably high. What would you have thought was more appropriate?

By the way, in case you are looking for new places to put an ATM.  There's a neighborhood here in town they have dubbed bitcoin boulevard in Cleveland Heights, Ohio.  Several retailers have banded together and are all doing business in bitcoin.  I'm unsure if they currently have an ATM at that location, but it would be a great place to put one.

So is there any chance of getting one of you to just say "I think X% is the appropriate commission to charge"?

Back then it wasn't unusual to see 20% or more volatility in a day. Nowadays things are a lot more stable. With the current volatility, 2% is reasonable if you are willing to wait a couple weeks for the AML verification. If you want instant gratification, you'll pay more based on the level of convenience. If you could buy bitcoins with your groceries at Piggly Wiggly, I think 8-10% is reasonable at this juncture.

No I was not. I did not have a calculator, so estimated it was around 10%.

However, This machine did not ask for may name; only my QR code. Not sure if that deserves a premium.

However, because I only bought $20 worth, the transaction fees worked out to $1.74, which would be cheaper than trying to use an exchange.

I think I would kind of expect a premium of at least 3% from an "ATM": especially with the volatility of the price.

The merchant I was using was offering a 10% discount for paying in Bitcoin. You may want to check common merchants to see what the most common discount is (and try to stay below it).

Agree with this about it not being an ATM, I hate that these types of things are called ATMs but you can't SELL your Bitcoin to get fiat.

I think it's odd to get so hung up on this, but it's certainly a common point of contention.

to be as fair as possible to all sides and encourage people who want to buy bitcoin to use the service

Maybe Use an aggregated price or

currently as I write

Coindesk 583.5

Coinbase 583.69

and charge 1%.

I would personally not use any service (now ..as i have paid 3% in the past) with a higher than 1% cost..and in time I would hope that halves

can a break even point be reached at this rate in the next 6 months?  unlikely  in 1 yr ..maybe..in 2 yrs good chance.  depending of course on the location of the "atm"

If it is a two way ATM, you are a money service business. If it is one way, you are more like a precious metal dealer (still subject to regulation, but it may be less stringent).

I could not use my local robocoin ATM because they require me to have a cell-phone. They also require a government ID scan and handprint.

Traditional banks issue you their own identifying card after doing identification in an office setting. This means you don't have to submit documents every time you make a transaction.

You can already buy groceries at "piggly" with the anx card....

http://debitcard.anxintl.com/

It looks like this is the cost

2.5% to load with bitcoin..a further 0.5% spread to convert to $ on the card  (card has a $ balance)..and there may be a monthly charge..I will look into it to get their full terms...that appears to be  about 3-5% which is not too bad if you want the convenience to shop alomost anywhere


edit
http://www.coindesk.com/exchange-anx-launch-reloadable-bitcoin-debit-cards/

There is maximum cash withdrawal $200 USD (or equivalent) per day limit

The fees are a bit higher depending on how you use it

http://www.cryptocoinsnews.com/news/ken-lo-ceo-anx-hong-kong-bitcoin-exchange-talks-bitcoin-debit-cards/2014/07/16

What fees will be associated with the ANX debit card?

    As our fees may change from time to time, it’s best to check our fee schedule on our website to ensure the most accurate fee pricing.

After visiting the ANX website, the current fees for the ANX Debit Card are as follows:

ATM Withdrawal – $2.75

ATM Withdrawal Decline – $1.25

POS Purchase – $1.50

POS Purchase Decline – $0.20

Monthly Fee – None

Card Load Fee – $5 USD + 2.5%

Card Unload Fee – $10 USD

Can you purchase any amount up to your current loaded limit..at a 1.5% POS cost?  eg if you have $5,000 loaded on your card I assume you can buy $4,925 of goods and services

This is HK based..it is not unlikely that mainland Chinese on holiday abroad could use this to circumvent the $50,000 / year currency control :)..I would  LOL

For comparison  it looks like anx has xapo beat

http://www.coindesk.com/xapo-faces-online-backlash-debit-card-fees/



When it announced the card, Xapo promised a $15 one-time shipping and handling fee, but the company did not reveal any information on other associated costs.

The fee schedule, however, revealed the following card charges:

    A monthly service fee of $4.95, or £3.95/€3.95 for European customers
    An international ATM transaction surcharge
    Declined transactions costs of $1, or £1/€1
    Domestic ATM transaction costs of $3.50 per transaction, or £2.50/€2.50 in Europe.


http://media.coindesk.com/2014/08/xapo-debit-card-fee-schedule.png

as someone who advocates capitalism the ATM owners can charge as much as they want, if its absurd % then there will be incentive for the next guy to undercut him. bitcoin atms are starting to become more common

Cross-posting an idea I posted in another thread (https://bitcointalk.org/index.php?topic=742414.msg8501386#msg8501386).

Imagine a Bitcoin "ATM" manufacturer researched the MSB requirements in their area. Generally, you are not considered a MSB if you do not move enough money to make a business out of it. Say the limit is $500/day or $10,000/quarter.

You can then set up a machine that sets fees based on how close it is to exceeding those limits. The percentage can even vary within the same session with the user: depending how much of the daily limit they want to withdrawal.

While one machine with such low limits would be useless; you would likely be able to find a working machine if just about every business had one for side-revenue.

Edit: I may have just re-invented localbitcoins :)

I might not have to use btc atm in future so I don't worry about fees xD

I don't think the fact that an ATM only sells BTC would make them not be a MSB. The fact that the ATM is exchanging cash for a cash like product is generally what would make them subject to MSB regulations. I may be incorrect on this but this is my understanding.

Well in my opinion Canada's ATM's one way or two way have to comply with MSB requirements
http://www.mnp.ca/en/media-centre/news/2014/6/24/canada-implements-first-bitcoin-legislation

On June 19, Canada gave Royal Assent to Bill C-31, An Act to Implement Certain Provisions of the Budget Tabled in Parliament on February 11, 2014 and Other Measures. The bill includes provisions on virtual currencies like Bitcoin, requiring similar reporting and regulatory standards applied by traditional financial markets. The new law regulates Bitcoin as a “money service business” and specifically addresses dealers in virtual currencies. It is expected to cover Bitcoin exchanges and ATMs.

The amendments make Bitcoin and all digital currencies subject to the requirements currently applicable to money services businesses. Bitcoin exchanges will now be required to register with FINTRAC, report suspicious and other transactions, keep certain records, implement compliance plans, and determine if any of their customers are “politically exposed persons.” Bill C-31 applies to Bitcoin companies that have a place of business in Canada and outside Canada, who direct services at persons or entities in Canada.

“This is intended for external Bitcoin companies doing business in Canada who will have to comply with Canada’s anti-money laundering legislation,” said Christine Duhaime, a senior financial crime advisor with MNP LLP. “Part of the concern with such laws is whether they strike a balance between combating financial crime and supporting innovative technology development. The concern is that venture capital for Bitcoin start-ups may dry up if legislative obligations prove to be too onerous or expensive. But this legislation is an important step forward.”

Since they mentioned ATM's should impact it as well.

I think the regulatory environment in Canada is especially troubling. I have heard rumors that the reason that Just Dice closed down was because of the new Canadian regulations.

For adding the Bitcoin ATM ROI calculator (http://coinatmradar.com/roi/bitcoin_atm_business_return_on_investment/) on my site, I've looked at the average rate across all Bitcoin ATM machines in the world (for which the rates are available) and it was 5.2%. So 5% is something on average the market uses at the moment.

As a customer I find the rate 3-4% is fair at the moment. My bank charges me 3% mark up to get cash from their ATM in a currency different from the currency of the account, and this is one of the biggest banks. So if the rate of Bitcoin ATM is about the same - then it totally makes sense.

The other thing, how long it will take to make it profitable (you can check the calculator above for this). But with mass adoption the volume should increase and make it more easier to get return on investment earlier, even with smaller rates, so I think it will decrease over time to maybe 3% on average.

Imo Bitcoin ATM should not took a fee. The fee is a worst thing you can even imagine!

This is a business first of all, so your opinion is rather strange. I think everybody will appreciate if you purchase the Bitcoin ATM and install it for free usage. But something tells me, you're not going to do this.

I think this has a chance where its difficult to purchase bitcoins, here in the usa, its pretty easy, especially with coinbase, but they only buy/sell here in the usa, so I see it working where its difficult to purchase coins. Also, the only place that I see them working is in airports, where you can reach more people from more cultures.

Also, you will start seeing pawn shops start selling/buying coins. If you make the transaction right there, you may have to get fincen reguated, but I dont think you need to get all the regulations that are needed for an atm. im not 100 percent sure on this, but since bitcoin isn't considered money, i believe its the same as buying/selling gold or silver so you only have to report over a certain amount.

(could be wrong, but thats my undertsanding)

Bitcoin ATM competitors are dealers on localbitcoin.

Hard to see people paying higher fee on ATM than from local dealer.

I'd say the fees should be about the same as an exchange, but you could up them a bit and get away with it as you won't be exchanging as high of a volume as exchanges do. You'll also be providing a different kind of convenience, so that could allow you to raise the fees a bit. 0.5% seems about right. In order to ensure you have enough business, perhaps make the minimum fee the equivalent of $1.00. This way people don't create lots of dust transactions as well.

I don't think it is all that easy to buy bitcoin in the US. You need to complete the KYC process which generally can be very intrusive and can take at least a week or so but sometimes longer.

Buying BTC also generally involves a bank account, but if you are unbanked then the cost to get money to an exchange will go way up, probably to the extent that buying at an ATM is actually cheaper.

The question though is how to make a business from that after compliance costs, and renting the space in a building.
Although a flat fiat rate fee might be convenient if enough people are willing to use the machine
But for now until scale gets there I think 3 to 5% will be more closer to the real fee.