There are a lot of reasons for customers to use ATMs, but some people want more from them with each passing day. Some features have been greatly beneficial, such as depositing checks and cash directly without needing an envelope. Others aren't as well known, such as paying bills and making transfers. The general direction for users and banks has been to turn the ATM into a true automated teller, performing duties that once required live employees. However, a growing number of customers are demanding a unique function that many don't even realize is possible. The use of Bitcoin will be come an interesting question for many banks to deal with in the coming years.
Bitcoin is the most popular of a new form of currency called cryptocurrency. Instead of a hard material token such as a paper or polymer bill or metal coin, Bitcoins are bits of encrypted data that represent value, existing on a so-called block chain. A customer can transfer these bits of data in exchange for goods and services. What makes cryptocurrency unique is that its encryption methods make it possible for a person to have an almost completely anonymous and untraceable transaction. Many of its supporters see it as a way to reliably purchase goods as well as complete transfers of value that aren't defined by a central authority. While there are many virtual currencies that appeared in its wake, Bitcoin remains the most popular and strongest of them, with the exchange rate to the dollar currently in the hundreds.
Many tech evangelists suggest creating a Bitcoin service that banks can implement in ATMs, according to ATM Marketplace, citing reports from the ATM Industry Association. Customers could deposit money into the ATM that then converts instantly into the virtual currency. A person could also bring in a token that the machine can convert into dispensable cash. Operators receive fees based on these transactions and adjustments to the exchange rate.
While many banks see this as an opportunity for revenue, there is still the issue that virtual currencies remain incredibly niche. There were only 1.3 million Bitcoin users worldwide in 2014. The currency is unstable and lacks regulatory protection, which prevents mainstream acceptance. The ATM Marketplace article cites additional insight from Juniper Research, which stated growth in the field in 2014 happened because of increased transactions from established users instead of consumer adoption. While Bitcoin remains something to keep an eye on in the coming years, financial institutions should avoid rushing to garner consumers' attention from what is a tiny market by implementing Bitcoin at ATMs.
December 15, 2015