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How a Digitally Minded Clientele Led a Small C-Store/Deli Chain to Install Bitcoin ATMs
June 24, 2014

By John Stewart

With Bitcoin ATMs now having been deployed in scores of locations around the world, merchants are starting to see how the machines could potentially drive traffic and sales—especially with a younger, hipper clientele.

Image Credit: Locali Conscious Convenience
The convenience store chain has Bitcoin ATMs in two stores.

The latest merchant to install Bitcoin machines is Locali Conscious Convenience, a three-store deli and convenience-store chain with outlets in and around Los Angeles. ATMs in its Venice and Hollywood stores went live on Saturday, allowing customers to both buy and sell Bitcoin and also send the digital currency to friends or family.

It’s too early to gauge the machines’ impact so far, but they are creating some buzz for Locali. “The future of Bitcoin is very exciting to me,” Melissa Rosen, Locali’s chief executive and co-owner, tells Digital Transactions News. “There’s unbelievable potential.”

Rosen hopes the ATMs, which were made by Las Vegas-based Robocoin, one of several Bitcoin ATM startups, will draw more customers and boost sales. The machines are two-way kiosks, meaning they will take cash for Bitcoin and dispense cash to customers who sell Bitcoin. Rosen figures that should put some purchasing power in their hands while they’re in the store, particularly since Locali accepts Bitcoin for purchases.

The remittance capability may also draw customers. The Robocoin kiosks, which include biometric authentication based on palm prints, allow users to send Bitcoin to any email address or mobile number. The recipient can access the currency at a local machine. Robocoin so far has installed machines in some 32 locations in the western U.S., in Canada, and in 13 other countries.

“We’re hoping that [remittance feature] will draw more people to check out our [menu] offering,” says Rosen, whose stores specialize in vegan, vegetarian, and gluten-free substitutes for various sandwiches.

While Robocoin ATMs are sparse so far, one of the key selling points for the remittance feature is cost. “It’s a fraction of the cost of a Western Union [remittance], and you can send Bitcoin pretty much instantaneously around the world,” says Cailen D. Sullivan, chief executive with Zenbox, which deployed and branded the Locali machines for Expresscoin Inc., a Santa Monica, Calif.-based digital-currency technology firm.

With three Zenbox kiosks installed so far (the third is in the D Hotel in Las Vegas), the company’s goal is to have “hundreds” deployed by year’s end, chiefly in North America, Sullivan says. His company takes 5% of each transaction as its fee, sharing out an undisclosed portion of that to Locali.

Rosen says the idea for a Bitcoin ATM occurred to her when her business partner, chief operating officer Greg Horos, proposed installing a conventional ATM in one of Locali’s outlets. Rosen says she liked the idea but thought a machine dispensing digital currency would carry more appeal for her stores’ young, digitally minded clientele.

“I Googled the subject to see if Bitcoin ATMs existed,” she recalls. “Our customer base is very diverse, very progressive. They’re into the health of the planet, and excited about anything that will bring about change in the political and economic situation in this country.”

Noting that a Robocoin machine had just gone live in Vancouver, British Columbia, Rosen in February contacted the company and was soon dealing with Expresscoin. By May, Rosen and Horos had signed off on the paperwork.

Next, Rosen says Locali is working on taking Bitcoin directly in its stores. That, she says, requires some rejiggering of its iPad-based point-of-sale system. For now, the company is accepting the currency through an interface with Foodler, a vendor of online-ordering tools for restaurants.

Now that it has found an alternative for conventional money, Locali has its sights set on conventional quick-serve chains. Rosen and Horos are hoping to begin franchising Locali stores. “We’re trying to shake up the fast-food paradigm,” says Rosen.

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