Michael Graham is the Vice President of Retail Solutions & Strategy for Hyosung. In this role, he helps retail customers make decisions about transformation products and unlock the value of those investments. Prior to joining Hyosung, Michael worked at Wells Fargo Bank in both the Retail Banking and Technology business units, developing and implementing many transformative solutions and products.

Key Take-Aways

• Bitcoin has the power to fight financial inequality and potentially provide financial inclusion for the unbanked and underbanked consumer.

• Over 10,000 Bitcoin ATMs installed in the last 10 months globally with North America staking claim to 93% of Bitcoin ATM market share.

• With leading global innovation and experience, key strategic partners and over 180K retail connections today in North America, Hyosung can help you navigate the world of Crypto-Currency ATMs.

From its inception, Bitcoin has been a trendsetter—shaping and changing traditional thinking on financial investments and inviting consumer of all classes to the dynamic world of digital currency and an alternative to central bank-controlled fiat money. While its volatile nature and price fluctuations keep some investors from tying the knot, bitcoin continues to drive significant interest from new consumers and stimulate growth into stagnant markets and industries. Specifically, bitcoin has injected life-giving blood to Kiosk and Retail ATM businesses. For example, despite a prolonged pandemic, over 10,000 bitcoin ATMs have been installed globally in the last 10 months. Furthermore, North America has staked claim to 93% of the world’s bitcoin ATM market share.

Bitcoin 101

Before pontificating the virtues of a marriage of bitcoin and ATMs, one should ground themselves in the basics of bitcoin.

• Bitcoin is a form of digital currency which emerged post the 2008 financial crisis, becoming the most prominent among thousands of cryptocurrencies.

• Specifically, it relies on ‘blockchain’ technology, a communal database of transactions, of which entries are validated and encrypted.

• The complex of ‘blockchain’ tech is secured by individuals called “miners” who use high-powered computers to verify transactions, with bitcoins offered as a reward.

• There are more than 18m coins in existence, controlled by a mathematical system for generation of new bitcoins, which is decentralized and thus has no central bank oversight, and has a hardwired maximum of 21m coins.

The appeal of bitcoin is different for many; anonymity, a socially-viable banking alternative, fee conscious consumers, increasing technical understanding of cryptocurrency and/or ease of access and use. Yet there is one other alluring attribute, addressing financial inequality, which deserves our attention.

Bitcoin is Now Appearing as a Front-Runner to Serve Underbanked and Unbanked Consumers

According to recent FDIC studies, approximately 28% of US households are either unbanked or underbanked. Unfortunately, the prolonged pandemic has widened the gap to traditional financial services with accelerated traditional bank branch closures and increased KYC requirements. As such, underserved consumers leverage a myriad of alternative financial structures to access pay, pay bills, and send money to relatives or friends, often for extensive fees and at considerable inconvenience. Hence the appeal of Bitcoin to the underbanked/unbanked consumers:

• Bitcoin relies on distributed networks to provide financial infrastructure, which is ‘always on’ and easily accessible.

• In a matter of minutes, consumers can create a bitcoin wallet and invest in crypto currency or transfer money (even internationally) at much lower fees than today’s banking or money service businesses.

Coming to a Convenience Store, Grocer or Casino Near You!

Centralizing access to an alternative banking solution such as bitcoin, not only at one physical address but on a technology consumers are easily familiar, the ATM, provides the winning combination for the wedding nuptials for these technologies. Significant friction is eliminated and great convenience is presented to the unbanked consumers. Hence the dramatic increase and demand for bitcoin ATMs and in fact, according to an online map by Coin ATM Radar, there are now bitcoin ATMs in every state except Alaska. The reasons vary for using a BTM (bitcoin ATM); the aforementioned unbanked, of which many continue to get paid in cash, a desire to remit money abroad at lower cost, anonymity, and in many cases these consumers simply feel more comfortable interacting with a familiar, physical machine.
The capabilities of BTMs and bitcoin providers continues to evolve to meet consumer demand with machines which offer only bitcoin, while others offer various digital currencies. Fees can range from 6% to 20% of a total transaction, but can vary depending on the location of the machine and owner operator agreements.

More Opportunities Ahead

Fueled by increasing demand, the global Crypto ATM market is currently valued at $55MM with a CAGR of 58% from 2021-2030. As of January 2021, there were 28,185 bitcoin ATMs in the United States and the US is projected to remain the fastest growing market in the forecast period.

The Bottom Line

• Retailers, ATM owners/operators should continue to research the opportunities associated with Bitcoin and additional services to support underbanked/unbanked consumers.

• Given Hyosung’s leading market share of retail ATM deployments here in the US combined with global expertise in delivering solutions to meet and exceed consumer demand, you’ve got a perfect partner to help you navigate topics such as bitcoin and Retail ATMs.

• Be watchful of future exciting announcements from Hyosung regarding opportunities regarding bitcoin and additional prospects to maximize and empower your retail ATM.

Should you have additional questions about Bitcoin offerings or Retail ATMs, we encourage you to contact your Hyosung sales rep or your local Authorized Hyosung Dealer to see how Hyosung can help you.

Sources: Market Data Forecast – Crypto ATM Market April 2021, Socialnomics – January 2021, FDIC, Investopedia – Guide to Bitcoin, Seeking Alpha, CoinRadar.com.