Walmart, the world’s largest retailer by revenue, is installing bitcoin ATMs at dozens of its stores across the United States.
In a partnership with crypto ATM provider Coinme, the retail behemoth is now providing bitcoin at 200 of its Coinstar kiosks.
Customers may buy cryptocurrencies through Coinstar ATMs located throughout the retailer’s massive large box stores. On Oct. 12, a CoinDesk editor tested the service by purchasing a modest quantity of Bitcoin at a Pennsylvania Walmart.
Walmart communications director Molly Blakeman said via email that “Coinstar, in cooperation with Coinme, has launched a pilot that allows its customers to use cash to purchase bitcoin.” “This pilot includes 200 Coinstar kiosks that are positioned within Walmart shops across the United States.”
Coinstar is most recognized for letting customers to exchange coins for cash, gift cards, or paper bills. Coinme, a cryptocurrency wallet and payment company that specialized in bitcoin ATMs, has made it possible to buy bitcoin (BTMs).
A paper voucher is given once bills are inserted into the machine. Before the voucher can be redeemed, you must first create a Coinme account and pass a know-your-customer (KYC) check. According to the Coinstar website, the machine costs a 4% fee for bitcoin and a 7% fee for cash exchange.
Following a hoax last month in which a bogus press release claimed that litecoin (LTC) would be accepted as payment at Walmart stores, CoinDesk tested the service out of an abundance of caution. The bitcoin-Bentonville link is real this time. According to a source familiar with the pilot, the Litecoin fiasco has deterred Walmart, based in Bentonville, Ark., from publishing a press announcement.
Bitcoin ATMs on the rise
The cryptocurrency ATM market is rapidly growing, spurred in part by the COVID pandemic. In response to a surge in usage, Coinstar announced intentions to treble its fleet of 3,500 Coinme BTMs by 2020.
Coinstar, which began offering bitcoin-buying services with Coinme in early 2019, has recently added 300 bitcoin-enabled ATMs to Winn-Dixie, Fresco y Más, Harveys, and other Florida grocery stores.
Even if the 200-kiosk bitcoin ATM experiment is pocket change for a company with 4,700 stores and a market price of $409 billion, Walmart represents another step forward in pushing crypto financial services into the mainstream.
Given Walmart’s shared connections with Coinme and MoneyGram, the possibility for crypto-enabled financial services for lower-income users is alluringly close, but the store did not explain further on its crypto aspirations.
Compliance Issues with Bitcoin ATMs
While large-scale BTM rollouts may boost acceptance, money laundering risks remain, according to Seth Sattler, compliance director at BTM supplier DigitalMint.
This is because some crypto ATM operators ignore the relatively high degree of criminal activity attracted by the machines, he claims. Money mules, people traffickers, and other con artists fall within this category.
According to Sattler, who is also a prominent contributor to the recently convened Cryptocurrency Compliance Cooperative, DigitalMint has rejected and refunded $5 million to fraud victims over the last 18 months, despite accounting for only 5% of total BTM transaction volume.
In an interview, Sattler stated, “Large retailers need to make sure they know the vendor they’re getting into bed with and what that organization is doing to manage risk.”