Coinme ATMs Let Anyone Purchase Bitcoin with Cash and Makes Cryptocurrency More Accessible via a Partnership with Coinstar – CardRates.com


In a Nutshell: While cryptocurrency aims to democratize the world of finance, those who are underserved or unbanked often cannot access digital currencies. Coinme is making it easier than ever to purchase cryptocurrencies through its Bitcoin ATMs, in partnership with Coinstar. The ubiquitous grocery store kiosks make cash purchases of Bitcoin easy. A Coinme survey revealed that about two-thirds of respondents are using Bitcoin to purchase goods and services or sending Bitcoin abroad to friends and family. Coinme also educates customers through its Private Client service that facilitates Bitcoin transactions higher than $2,500.

One of the major drivers behind the concept of cryptocurrency has always been the democratization of the financial ecosystem. Crypto and its underpinning blockchain technology are meant to take the power away from traditional financial institutions and place it in the hands of the people.

And it does — as long as those people have access to a computer or smartphone, a bank account, and a little technical know-how to navigate the world of crypto.

Coinme Logo

Maybe cryptocurrency isn’t the great economic leveler after all, but companies like Coinme are working hard to bring it much closer to that ideal with its Bitcoin ATMs that allow people to simply insert cash and purchase crypto.

“Coinme was founded back in 2014,” Sung Woo Choi, Coinme’s VP of Business Operations and Corporate Development. “We were the very first licensed Bitcoin ATM company in the United States. We got our money transmitter license only about three or four months after Coinbase.”

Choi said the company was launched by Neil Bergquist and Michael Smyers as a small operation in the Seattle area. And from the beginning, the company has believed that cryptocurrency is an economic tool that any person in the world should have access to.

“We realize that the current financial system doesn’t provide an equal opportunity for all to thrive,” according to the company. “That’s why we know how important it is for cryptocurrency to be made accessible to everyone, everywhere.”

As part of this mission, Coinme also seeks to help people better understand cryptocurrency so they can use it as a medium of exchange and a financially sound store of value.

In Coinme’s early years, the company grew slow and steady, Choi said, eventually maintaining about 70 Bitcoin ATM locations on the West Coast.

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“Something we realized around 2018 was that deploying our own kiosks infrastructure was too burdensome to be able to achieve our goals,” he said. “Between the cash logistics and the kiosk infrastructure maintenance, and all the other pieces of the operation, it was just too burdensome.”

Coinstar Kiosk

Coinme teamed up with Coinstar to bring its Bitcoin ATM functionality to locations across the country.

It was around the same time that Coinme realized an infrastructure — Coinstar — already existed all over the country that could help it meet its goals. Most people are likely familiar with Coinstar whose ubiquitous kiosks at thousands of grocery stores turn loose change into cash.

“We were fortunate enough to find our first partner in Coinstar,” Choi said. “The company has about 20,000 locations around the world, and I believe about three-quarters of them are in North America. There is a Coinstar machine within five miles of over 90% of Americans.”

Joining with Coinstar proved to be the perfect pairing for Coinme. Choi said Coinstar machines receive hundreds of millions of eye impressions per month because of their high visibility in stores. And Coinme’s presence is front-and-center as one of the main options on Coinstar screens.

“Together with Coinstar, Coinme operates the largest network of bitcoin kiosks in the world. It’s just one of the ways we’re making bitcoin more accessible to everyone,” according to the company website.

And using the kiosks is simple.

Choi said customers simply follow the on-screen instructions to insert their funds and purchase Bitcoin. They will be quoted a price before the transaction, and once the transaction is complete they will receive a voucher with a 16-digit alphanumeric code and four-digit PIN.

New customers will have to log on to the Coinme website to complete the KYC and AML process, and then they will have their own Coinme account and own Bitcoin.

Choi said a lot of cryptocurrency interfaces require customers to create a wallet, which can be difficult for the average consumer. So Coinme automatically generates a wallet on behalf of the Bitcoin purchaser.

We’ve created a very simple system,” he said. “The oldest customer on our platform is 103 years old. We are very excited that our platform has enabled someone who is 103 years old to buy bitcoin. It’s a testament to how easy the process is.”

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“The other exciting thing to us about the services that we provide is that when we surveyed our customers, about two-thirds of them actually use our services for a utility purpose,” Choi said.

In the general population, a lot of crypto enthusiasts view digital currencies as an investment. But a lot of Coinme customers are purchasing Bitcoin and using it for payments, he said.

Sung Woo Choi

Sung Woo Choi is the VP of Business Operations and Corporate Development at Coinme.

“The payments use case is the biggest one, where people are buying Bitcoin, then saying ‘Hey, you know, I’m going to send this to a company to pay for a good or service,’” Choi said.

Other users have purchased Bitcoin through Coinme after shopping for an item on a website like Alibaba or Etsy and discovering that the seller prefers payment in Bitcoin.

“Maybe this is a non-technical person that lives in a small town,” he said. “Well, there’s a Coinstar machine at your grocery store, so you can walk to the Coinstar machine and buy Bitcoin and then send that to pay for the product you are purchasing.”

A major future use case that the company is building for is remittances.

“If you’re a migrant worker from Mexico or an undocumented worker, some of these individuals don’t have access to banking,” Choi said. “And the way they have traditionally sent money is to go to a Western Union or MoneyGram and send money to family back home, who are also using cash.”

This method of remittance not only keeps these groups of people from participating in the digital economy, money transfer companies generally charge hefty fees. This can make a big dent in the amount of money the user is sending when at times they are sending sums as little as $25, Choi said.

“The blockchain eliminates that,” he said. “If you buy digital currencies and send them to your friends and family, that’s a situation where you can really have huge, significant savings by not having to pay fees.”

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Coinme’s most visible service may be its Bitcoin ATMs, but the company also aspires to educate its customers about digital currencies.

“We have a division called Private Client with Bitcoin advisors that help users understand what Bitcoin is and how to purchase it,” Choi said. “It’s a very educational group that helps inform people about the use cases around Bitcoin.”

The Private Client advisors are also able to facilitate Bitcoin purchases greater than the $2,500 daily limit at the Coinstar machines.

“Our experienced private-client team provides personalized, white-glove service and support,” according to the company. “From one-time bitcoin purchases to self-directed digital currency IRAs, we help you take advantage of the best performing asset class of the last decade.”

This segment of Coinme’s service not only helps entry-level crypto users understand more about the world of digital currencies, but it assists those who are interested in crypto as an asset.

“For those individuals who want to use Bitcoin as a store of value and invest in cryptocurrencies, we help you understand exactly what you’re getting into,” Choi said. “We’re not a broker or dealer, so we’re not providing investment advice. But we’re educating users on what Bitcoin is, its general foundations, and just how the system works.”

Choi said those interested in Coinme’s Private Client service can sign up for it through the company’s website and an advisor will speak to them.

“And that’s something that the company is really very proud of,” he said. “Whether it’s customer service for the kiosks or Private Client, we have real people on the phone that you can speak to.”

Choi said that, at this time, Coinme only facilitates Bitcoin purchases, but the company expects to expand its digital currency offerings in the future.

In May, Coinme announced a $5.5 million investment by Pantera Capital as part of its ongoing Series A fundraising to help accelerate the mainstream adoption of cryptocurrencies. Other recent investors include Blockchain.com, Nima Capital, Coinstar, and Hard+Yaka, according to a press release.

“We’re very excited to have Pantera Capital support our mission to make cryptocurrency globally accessible and delightful to use,” said Co-Founder and CEO Bergquist in the announcement. “Pantera is one of the largest institutional owners of cryptocurrencies and their participation in our round is a vote of confidence in Coinme’s vision, traction, and opportunity to drive main-street adoption.”





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