There are few familiar places in the regular life of a consumer other than the grocery store, and that familiarity can breed a type of trust, a sense that nothing too weird or threatening will happen there.
That doesn’t mean they can’t be about innovation. Supermarkets are home to some of retail’s major and ongoing technological advances — and 2018 stands as a big year for grocery innovation.
Might that familiarity help with the push to bring digital currency deeper into the mainstream? In a new PYMNTS interview, Neil Bergquist, CEO of bitcoin ATM provider Coinme, spoke about how his company is part of the launch of bitcoin payments via Coinstar kiosks, those change-handling machines often located near ATMs, customer service desks or front entrances at grocery stores. The launch of that service brings the relatively unfamiliar world of digital currency into the well-known world of the U.S. supermarket.
According to Bergquist, the Coinstar-Coinme bitcoin effort represents the “largest mainstream on-ramping to date” for the digital currency. “That’s significant,” he said.
The timing is something, if not, puzzling. Never mind that the digital currency has yet to gain any mainstream traction — bitcoin prices are at all-time lows. There also remains wide skepticism about the use case for digital currency when transacting, since that is not really what it’s used for, and that is to say nothing of its reputation among mainstream consumers.
That said, if one was thinking about how to take bitcoin mainstream, grocery stores would be a logical starting point— and Coinstar a logical partner.
Coinstar has serious reach, with some 20,000 kiosks in four countries, mostly in the U.S. Bergquist told PYMNTS that about 90 percent of the U.S. population “lives within five miles” of a Coinstar kiosk. That matters because he knows of bitcoin enthusiasts who have driven up to two hours to find a bitcoin-enabled ATM. “Now, we are talking about much more consumer access” to bitcoin, which could spark more use of that and other digital currencies in general, he said.
For now, the bitcoin-enabled Coinstar kiosks are launching in “high-density” areas, with other deployments taking place throughout the year. Coinstar kiosks at select Safeway and Albertsons stores in California (surprise, surprise), Texas and Washington state are the first such machines with the bitcoin capabilities.
It works like this: A consumer inserts U.S. cash into the Coinstar kiosk (only cash can be used), selects any amount up to $2,500, then receives a voucher for bitcoin. Consumers must have Coinme online accounts to claim their bitcoin.
Who Uses Bitcoin ATMs, Anyway?
The growth of bitcoin ATMs appears to be slowing. While 187 bitcoin ATMs opened in July 2018, 132 closed. It’s been reported that the decline of crypto prices has created a market for used bitcoin ATMs.
A recent report from Pennsylvania’s LancasterOnline about the appearance of a bitcoin ATM inside a local convenience store found that pretty much no one knew what bitcoin was, and that the machine got little use. The machine does bring in $200 per month for the owner of that store, but the owner told the newspaper that “he’s actually trying to get rid of it, as it takes up too much space.” The store also has gambling machines, which attract high use.
The Crypto Curious
However, Bergquist is nothing if not an optimist about digital currency, and that attitude applies to a consumer segment that he called “the crypto curious.” Those are consumers “who have heard of bitcoin, and might have someone in their family who owns it,” but have never learned much about digital currencies beyond that. He estimated that 40 percent of the U.S. population has indeed heard of digital currency, but doesn’t own any.
One use for bitcoin, envisioned by Bergquist, is for workers who are typically paid in cash (specifically, immigrants) — using the machine to convert that cash into bitcoin, then send those funds home online at less cost than would be charged for an international money transfer.
“These access points are extremely important” in transforming the curious into actual users, he said. He also predicted that prices will stabilize over the year, removing the specter of “speculation and gambling” that hangs over bitcoin, thanks in no small part to last year’s headlines about the price declines.
Those consumers are not necessarily the people attracted to bitcoin because of the philosophical or political oppositions to fiat currency, the Federal Reserve and the various other reasons that drive that part of the digital currency wave, Bergquist acknowledged. Yet, that also leads to the issue of what bitcoin is good for in the longer term.
How can it improve the daily lives of all those consumers going about their shopping at the old, familiar grocery store? What will it take besides these new access points to push bitcoin further into the mainstream?
“That’s the billion-dollar question,” he said.
It all starts with understanding, Bergquist explained, and perhaps the start of that understanding is to make bitcoin more familiar than it has been. A year from now, that “access will be ubiquitous,” he said, and providing access to digital currency will eventually “become table stakes.” Maybe, maybe not — but the deployment of bitcoin capabilities to more Coinstar kiosks will surely provide more clarity about how deep into the mainstream bitcoin can really go.