by Nuno Menezes
Netcoins is a Canadian-based startup that has developed the world’s first “virtual” Bitcoin ATM. By offering no-cost entry for retailers into the Bitcoin space, the company aims to offer online and physical retail shops a new way of attracting tech-savvy customers that typically shop online.
Netcoins was co-founded by Canada’s “Bitcoin Brothers,” Michael and Dominic Vogel back in 2014. The company, which already collected some experience by taking part in cohorts in Vancouver’s “Spring Activator” and Coquitlam’s TriCelerate startup accelerators, has now finally revealed its product. Netcoins is a virtual Bitcoin ATM designed to run on any web-enabled device.
With Netcoin’s software, retailers can install virtual ATM’s on any mobile device or computer at the store for customers to use. The ATMs are also equipped with a functionality which allow customers are able to buy Bitcoin by using cash or debit cards.
Netcoins recently launched a series of “virtual” Bitcoin ATMs throughout several retail stores in western Canada and has announced a partnership with the exclusive newsstand retailer in North America’s third largest transit system, Gateway Newstands, which is hosting the virtual ATMs in two other locations.
The company is now trying to expand to the rest of Canada as well as looking for stores in the United States that would like to have a Netcoins virtual Bitcoin ATM installed in their store.
BTCMANAGER corresponded with Michael Vogel, one of Netcoins’s founders, who was able to tell us more about these recent events.
On the Genesis of an Idea
Netcoins is here to make it easier for consumers to buy bitcoin, and to make it even easier for stores to sell it. Our original idea was born from the difficulties we experienced when buying bitcoin for the first time a few years ago. Netcoins is now also in a position to help retailers expand their customer demographics and attract tech-savvy Bitcoin customers to their stores by hosting a Netcoins virtual Bitcoin ATM.
Netcoins was founded in 2014. Our team has decades of experience in technology and financial sectors.
In late 2015 we launched in Canada, and are currently accepting a wait-list from retailers around the world. We can typically get a new store live within two days. Store owners outside of Canada can encourage Netcoins to launch in their country by signing up on goNetcoins.com. We are actively working on launching in Europe and the USA.
How does Netcoins work?
Netcoins’s virtual Bitcoin ATM is designed to run on any web-enabled device. Many stores are running it on a PC at the checkout, although some are also using tablet kiosks. Customers simply tell the cashier the amount of bitcoin they’d like to purchase, and after making payment, customers immediately receive their new bitcoins. It’s extremely easy for both customers and store staff; in fact, a lot of store staff had no previous experience with Bitcoin, so we’ve intentionally made it overtly simple to use.
Netcoins also looks after all the bitcoin inventory and regulatory management for the store, and it’s free for stores to participate. Like physical Bitcoin ATMs, there is a convenience fee attached to the order which is split between the store and Netcoins.
Physical Bitcoin ATMs are incredibly popular; however, the high machine cost and space requirements put them out of reach for most retailers. Netcoins solves these problems for retailers as a no-cost entry into the bitcoin space.
On their recent partnership with Gateway Newstands
Smart retailers are discovering that a Bitcoin ATM is a great way to attract Bitcoin’s “ideal” tech-savvy and high income demographic, especially in an age when these customers typically shop online. Gateway Newstands is a North American convenience store chain that has been very positive about Bitcoin. They also host physical Bitcoin ATMs in some of their stores, but because floor space is limited in most convenience stores it is a natural fit to offer Bitcoin for sale via a virtual Bitcoin ATM instead, which requires no floor space at all. We recently announced a partnership with Gateway and have already launched in several of their stores.
On Gateway Newstands’ past experience with CaVirtex’s Bitcoin ATMs
To clarify: Netcoins is working with Gateway Newstands (convenience store chain) and not CaVirtex. CaVirtex deployed a series of Bitcoin ATMs, including at Gateway Newstands locations. I think the main reason that Netcoins’ Virtual Bitcoin ATMs are useful to Gateway Newstands is that the Netcoins ATMs don’t take up any physical space (it runs on an existing computer / POS terminal in the store).
On regulation and the future of bitcoin
It’s amazing to see how far Bitcoin has come in a few short years. A few years ago it was not even possible to buy anything with Bitcoin, but now we’re at a point where even U.S. State governments are considering accepting it as a payment method for taxes and licences. My hope is that governments continue to recognize that a “wait-and-see” approach is crucial towards regulation. This same type of approach with the Internet boom in the ’90s was critical to its lasting success.
On Netcoins’s expectations and goals for the future
Merchants that host Bitcoin ATMs in their stores report as much as double-digit increases in spin-off sales. This is partly to do with the young, high-income, and tech-savvy demographic that makes up much of Bitcoin’s user base. Retailers see Bitcoin as a way to attract this ideal customer demographic, which is especially difficult in an age when most of this demographic shops exclusively online.
Our goal is to help retailers participate in the Bitcoin ATM ecosystem without needing to be burdened by the technological, machine cost, and regulatory barriers-to-entry.