Buying a bitcoin ATM: Advice from an insider

Jon Weilbaker, general manager, New York ATM, knows ATMs. He knows which ones are a good fit for his customers and which ones are not. But as the pandemic hit and the sale and service of ATMs came to an almost a standstill, as general manager of New York ATM, Weilbaker began researching different ideas to keep his business on track. That research led him in a new direction: bitcoin ATMs.

"I am intrigued by the [bitcoin ATM] business and met several of the big players at the ATMIA conference last February in Houston. And once the pandemic hit hard in March and April, none of my customers were buying new stores and no one wanted to talk ATMs, so I began looking at bitcoin ATMs. Plus, I hate walking into a store and seeing someone else's Bitcoin ATM right next to my cash ATM. I want to be the guy who controls all the cash products for all my customers," Weilbaker said.

Weilbaker began researching to determine what bitcoin ATMs covers in the payment system that cash ATMs don't. After much research, Weilbaker purchased bitcoin ATMs and hoped the gamble would pay off as the pandemic continued to sweep the country. Apparently, it has.

"The fastest growing crypto ATM operator in the U.S. went from 250 locations at the end of 2019 to 1250 today… 10% of those new customers are ours…" Weilbaker said. "We just started selling bitcoin ATMs ten months ago and the dramatic rise in its price means the more publicity about bitcoin that is out there, the less I have to explain what [bitcoin] is."

Although the buzz around bitcoin ATMs has increased, Weilbaker says there's still a learning curve where his customers are concerned.

"We're getting calls from merchants that want a bitcoin ATM, but since we are not an operator, we explain to them their options. Still, it can be very confusing. We need to explain fixed monthly payments vs a percentage of the gross and that hybrid models are offering something in-between. There's differing platforms, some of which are easier for customers to use than others, different hardware, etc. After speaking with most of the major operators, we test-drove products and reviewed contracts and service companies.

"We created a short list of operators which we recommend to our customers based on our specific needs and desires. There is a lot of hype out there. A company may offer a great deal on a machine to a customer but may not be able to get it installed for six months. Clearly, some of the operators are building to sell," said Weilbaker.

All in the family

Weilbaker's company started as a part-time family business in New York City in 1998, but business began increasing to the point that Weilbaker and his wife Patricia quit their jobs with Manhattan ad agencies to run the ATM sales and service company full-time. The company opened additional offices in Saratoga Springs NY, Springfield MA and Hartford CT. Despite the growth of the company, there's still a family connection at New York ATM. Weilbaker's son Shea has been working on bitcoin ATM sales over the past several months and is doing well.

"When Shea joined the team, he created a lot of new customer relationships. He's a sophomore at Georgetown University in DC and has been going to school remotely since the start of the pandemic. He's very motivated and understands patience and hard work, plus he understands bitcoin a lot better than I do," said Weilbaker.

As a new year approaches, Weilbaker also gave advice for businesses looking to buy a bitcoin ATM.

"Don't try to operate one yourself, get a full-service placement. As bitcoin grows in popularity, it will become even more regulated than today. Thoroughly investigate your options before signing up. Find a nearby store and go look at their machine. And most importantly, ask the merchant about his experience."