Bitcoin is going mainstream. And soon it could be available an ATM near you, providing consumers with greater accessibility to the mysterious world of crypto-currencies.
Some smaller retailers are enthusiastically hitching their wagon to the growing popularity of Bitcoin and adopting platforms allowing them to accept the currency as payment. However, other observers are warning the benefits of trading in Bitcoin are limited and even pose risks for small business owners.
The inaugural Bitcoin ATM was unveiled today inside the Pitt Street mall in the heart of the Sydney CBD allowing street-shoppers to buy and sell the currency for the first time.
The orange machine looks just like a normal ATM and is being rolled out by ABA Technology which has aspirations to introduce 100 such machines in Australia by the end of 2015 and 500 across the globe by the end of 2016.
The young chief executive of the company, Chris Guzowski, said he believed Bitcoin would continue to grow in popularity and would provide small business, particularly those with low margins, greater flexibility.
“One of the main benefits is cost saving,” he told Dynamic Business. “At the moment when you accept credit cards, you are charged a fee of 2 per cent, maybe more.
“Bitcoin is essentially free… some service providers will charge a fee. But it is low because the technology is so competitive. So it is cheaper for a retailer to accept Bitcoin than to accept credit card.
“It is more immediate because you get your cash the following day rather than a delayed settlement period.”
Kelly Lee, owner of Cellinis coffee shop located inside the Pitt Street mall, is an enthusiastic up-taker of the Bitcoin payment method allowing customers to pay with the digital currency. Ms Lee said the payment system was easy to use and would attract new customers. She was expecting her competitors in the vicinity to adopt the new payment system.
“It’s so easy, simple and the charge is not much. I think this is future currency,” she said.
Ms Lee said that, by using a payment platform called BitPOS, she was able to convert the digital currency into Australia dollars and gain protection from wild fluctuations in the Bitcoin price. “I installed it on the iPad. Very easy to do. (It took) about ten minutes,” she told Dynamic Business.
To mitigate risk for retailers, service providers like BitPOS will immediately sell Bitcoin payments received by merchants on local exchanges. For example, BitPOS co-founder Jason Williams says the platform allows a restaurant owner who accepts a $100 Bitcoin payment to have that payment sold within 60 seconds of the purchase on one of three local exchanges.
This ensures the restaurant owner will receive the $100 back without it being subject to the wild fluctuations in the Bitcoin price. BitPOS charges a one per cent fee for the service. “You’ll pay in Bitcoins and what BitPOS will do is take those Bitcoins and sell them on the exchange almost immediately,” Mr Williams told Dynamic Business.
Mr Williams said paying in Bitcoins was more convenient for customers who could simply use their phones to purchase goods and services. However, he acknowledged it could be risky for small business operators to trade in Bitcoins if they did not use a service provider, thereby exposing themselves to the volatility of the Bitcoin price. “It can be risky if the merchant elects to adopt that risk,” he said.
However, Bitcoin expert from the University of Western Australia, Professor David Glance, said the emergence of the new ATMs would not lead to a “consumer revolution” in the virtual currency. He said the currency was used mainly as a speculative investment and questioned the purpose of introducing an ATM allowing consumers to buy and sell Bitcoins for cash at street-level.
“Until a reputable company gets behind it its just going to be the preserve of enthusiasts and people who like high risk investments,” Professor Glance said. He pointed to the recent decision by the National Australia Bank to shut down the accounts of those who traded in the digital currency as evidence of Bitcoin’s obvious limitations.
He also said that retailers who accepted Bitcoin were exposing themselves to a degree of risk. “Everything they sell on Bitcoin they can lose money on,” he said. “As a commercial mechanism it has zero value.”