Should your pub install a Bitcoin ATM?

By Stuart Stone

- Last updated on GMT

Time to cash in on Bitcoin? Crypto de Change has installed two crypto currency ATMs in Cornwall
Time to cash in on Bitcoin? Crypto de Change has installed two crypto currency ATMs in Cornwall

Related tags Automated teller machine

The Morning Advertiser spoke to digital entrepreneur Thomas Plummer of Crypto de Change to see how pubs can cash in on cryptocurrency.

Created in 2009, Bitcoin is a digital currency and worldwide payment system that is independent of any authority meaning that large banks can’t control it. It can increasingly be used to make purchases on sites such as Expedia, but the main reason it has hit the headlines is through stories of investors getting very rich, very quickly.

Since January this year, Bitcoin’s value has leapt by 1,500% – accurate at time of publication. Bitcoin’s skyrocketing value was put into perspective by a report in the Cambridge News​ this month that a man who paid for a £1.55 half pint using Bitcoin in the Haymakers, Cambridge, in 2013, would have made £156 had he kept his crypto cash in his digital wallet. Effectively, it was the most expensive half he ever bought.

Previously a poorly kept secret by the tech savvy, Bitcoin is now attracting serious attention from big financial players. But how can pubs cash in on cryptocurrency?

Thomas Plummer, manager of Crypto de Change – has installed Bitcoin ATMs in two Cornish pubs and has seen operators reap the benefits.

“A Bitcoin ATM is quite the niche market because it serves a specific purpose – to allow people to spend cash to purchase cryptocurrencies (Bitcoin, etc.) with minimal effort. They come in two varieties; one-way (cash in, crypto out only) and two-way (cash in, crypto out or crypto in, cash out).

“When cashing out cryptocurrencies on a two-way machine, the ATM would provide the customer an address to scan where they send the cryptocurrency, the machine will wait for confirmation and then issue cash notes, much like a traditional cash machine. This effectively allows people to buy a round with their cryptocurrency, without the pub having to deal with it directly."

Plummer – a sole trader who also sells Bitcoin gift cards allowing customers to purchase vouchers for high street supermarkets and effectively allow users to spend Bitcoin on living costs such as groceries – founded Crypto de Change in 2013. His company installed its first ATM in the One & All in Penzance, Cornwall, in June 2016.

“In terms of benefits, it would bring potential customers who would otherwise not visit the pub to use the machine for potential footfall and more sales and custom; think of the Post Office being inside WHSmiths, it provides a two-way upsell for both WHSmith and the Post Office.

"We've found people going into our pubs to use the ATMs without the expectation of buying a drink but ending up staying.

“On top of that, you have the increased exposure that is a given with the growing hype around cryptocurrencies in general.

“Another benefit with this, which is massively overlooked, is a tourist who happens to be short on pound sterling can use the machine to cash out cryptocurrencies that they brought from overseas. This makes it effectively a cryptocurrency Bureau de Change, hence the name 'Crypto de Change'.”

However, he adds that his company’s ATMs may not be for right for all pubs.

"Trying to find places with high levels of footfall is important; local and village pubs probably wouldn't be a good fit. Passing trade is key, it's somewhere that's close to a train station would be ideal."

In terms of upfront costs, the entry level ATM – simply the cash in, crypto out model – costs in the region of £3,500 to install. However, the two-way cash in, crypto out or crypto in, cash out variety would set an operator back roughly £8,000.

"Depending on footfall return on investment can vary. Penzance's One & All pub is going to take about two and a half years to make a return on investment.

"The financial model depends on the site’s footfall. If it's quite a busy pub and the bar takes all the profits, it can do a rental scheme. If it's a quiet tourist-dependent town like Newquay, then a profit share and regular payment arrangement – for example I can pay the pub 0.5% per transaction and then around £200 per year on top of that – could work. It’s all up for negotiation."

More information on Crypto de Change and installing a Bitcoin ATM can be found on the company’s website.

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