Bitcoin Depot ATM

Making Bitcoin More Accessible with Daniel Polotsky of CoinFlip ATM

In this interview held in April 2020, you will see Lea talking with Daniel from CoinFlip ATM. Some of the stuff they will be talking about will be about how they run their business, what sets them apart from other companies, what are their plans for the future, how the global pandemic affected the crypto market, and much more.

Talking about the CoinFlip ATM business Daniel shared that they currently are at about 550 ATM’s and are trying to push 20 ATM’s per week so they can try to end the year at over a thousand, and hopefully continue that trend so they can end the next year at 2500 or 3000.

When asked about how the global pandemic affected their business, he explained that their volume per ATM did not go down, but they experienced a 15 to 20 percent drop in business having in mind that some of the stores were closed. He emphasized that this drop isn’t bigger thanks to the fact that most of their locations are gas stations and convenience stores that are open during the pandemic.

Further on, Daniel talked about the demographic saying that the people that are using the Bitcoin ATM’s are mostly the ones that the banking system left out so they don’t trust them. There are some that just are not willing to pay those bank fees. He also underlines the efficiency of the ATMs in comparison to the exchanges, where the authorization can take up to a couple of weeks, and the customer support is unresponsive most of the time. So, most of their customers are people that are new to the market and not so tech-savvy and are looking to invest some money.

He then went on to talk about how he understands the nervousness of people who are about to put thousands of dollars in some machine and having that in mind he pointed out the importance of 24/7 customer support which CoinFLip ATM is offering in order to put their customers at ease.

When it comes to security Daniel stated that they are a registered financial institution governed by FinCEN and that they need to comply with the KYC. He then explained the rules they have depending on the amount of money in circulation. Under 900 dollars the customer needs to leave the Name and phone number so they can confirm that they are the actual owner. Over 900 they ask for an ID card and a selfie. Over 3000, on top of that, the user will need to provide the social security and for transactions that are above 8000 dollars they request a second form of ID, and the user will need to sign a customer onboarding questionnaire.

He also stressed the importance of another procedure they have, in order to build up customer trust. Namely, their machines deliver the cryptocurrency to the user almost instantly, instead of batching the transactions where the customer would need to wait a certain amount of time after he entered the money.

As per Daniel, the thing that separates CoinFlip from other Bitcoin ATM companies is the lowest fees in the industry. They charge 6.99% of the buy and 3.9% of the sell as opposed to other companies that charge from 10 to even 20 percent. He understands that their fee still seems high compared to the exchanges, but he justifies it with the logistics expenses and already mentioned 24/7 customer service. He also says that their machines are, apart from being the coolest looking ones out there, the easiest ones to use. Having in mind that they are the biggest in the world in volume, they are definitely doing something right.

The current international presence of CoinFlip ATM is none, and David explains this with a fact that there is still a lot of US market to be covered. Another fact is that other countries will probably have different regulations that they will need to learn in order to operate legally. So, they plan to squeeze out every last drop out of the US market before they move to Canada or Mexico.

To summarize, if you want to operate a successful Bitcoin ATM business you need to offer your customers a sense of security through 24/7 support and almost instant transactions. The people that are using the Bitcoin ATMs are usually the ones that dropped the banking system and they need something they can trust. Also you should keep your fees at a reasonable rate to keep up with the competition. Bitcoin ATMs already have higher fees than exchanges but they offer faster authentication and easier transactions.

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