Bitcoin ATM Maker Robocoin Transforms Wallet Service Into Bank Account

Bitcoin ATM provider Robocoin is touting its ATMs as bank branches after launching an online banking platform, Robocoin Bank.

The platform allows users to send and receive bitcoins and monitor transactions. Users can send bitcoin payments to anyone's phone number, and if the recipient hasn't signed up for a Robocoin account, the bitcoin will be available at a Robocoin machine.

Bitcoin sent between Robocoin accounts arrive instantly without need for miners (the users who keep the record of transactions on the Bitcoin public ledger) to confirm the transactions.

The launch, built on Robocoin’s wallet service, makes sense for Robocoin after 72% of people used the "generate wallet" button on the first kiosk deployed in Vancouver, Canada in November.

The announcement is more about the vernacular within the Bitcoin ecosystem. Many people have discussed changing the words used to describe Bitcoin services to make them more accessible to mainstream consumers.

Robocoin's Bitcoin ATMs will now be called branches, and the new terms for buying and selling bitcoins are depositing and withdrawing, the company says. Plus, since users send money to phone numbers, the term “private key” is also abandoned.

"This is an example of a Bitcoin start-up trying to rethink a financial service," says Gil Luria, an analyst with Wedbush Securities. "This iteration may only look like a reloadable prepaid card, but as these companies grow I would expect them to come up with products that can only be delivered with Bitcoin."

This branchless banking idea is similar to Green Dot's GoBank mobile bank account, says Luria.

Bitcoin companies are also beginning to adopt security features that traditional payments providers have long used, such as multi-signature transaction authentication.

Other Bitcoin ATM providers include Lamassu Bitcoin Ventures and Moneero. Based in Uruguay, Moneero also provides users with wallet accounts when they use its machine.

Unlike the Bitcoin ATMs, which only allow cash deposits, Robocoin ATMs also allow users to withdraw cash. The machines support three-factor authentication; users supply a phone number and a personal PIN code, plus the machine scans the user's palm vein for biometric authentication.

Robocoin, based in Las Vegas, has deployed Bitcoin machines in 13 different countries and accepts 12 different national currencies.