An Australian company says it has produced one of bitcoin’s holy grails: a cashless ATM that allows users to buy bitcoins using a credit card, and sell bitcoins via a direct deposit to their bank account.
The first fully functional Diamond Circle ATM arrived from its manufacturer in Brisbane this week. Unlike competing ATMs and vending machines that rely on QR codes and cash, Diamond Circle’s solution is based on near-field communication (NFC) technology with paper receipt backups.
This unique approach is the brainchild of CEO Stephen Rowlison, a seasoned FinTech (financial technology) entrepreneur with 30 years of IT experience in Australia, Asia and the US. Before founding Diamond Circle, Rowlison was working on various projects developing NFC payment and loyalty card systems for retailers. He said:
“I was interested in NFC technology and payments, but just needed a unit of transfer. After learning about bitcoin, I figured I could combine the NFC chip with the ATM idea.”
He added: “What I’ve really done is just brought together two existing technologies: contactless NFC and BTC. QR code payments have been outlawed in China and have no inbuilt card security, which is why using contactless technology makes so much sense.”
Wallet tags
Although Rowlison is exploring other NFC devices for his ATMs, he has decided to focus on a ‘wallet tag’ for now, which is a small disc that can be used as a pendant or keychain.
“It’s got the same smarts as banking technology except we mandated a Personal Identification Number for all tags that are registered online.”
It’s the same contactless technology being deployed in some countries by Visa’s PayWave and Mastercard’s PayPass. Australia’s point-of-sale debit card network EFTPOS, which uses PC compatible devices, has also begun using NFC chips.
This all means Diamond Circle will be in a dominant position to launch its second phase: POS integration that will enable retail merchants to accept payment in bitcoin using devices they already have.
The ‘wallet tag’ devices function as cold storage wallets that communicate with the cashless ATMs. Customers also have the option to print out paper receipts and use them with more traditional smartphone or desktop wallet clients. The paper receipt can also be used as a backup for wallet tag users.
Diamond Circle customers can use the NFC ‘wallet tag’ device with a number of smartphones to check bitcoin balances and broadcast their public address.
More secure storage
Diamond Circle provides customers a secure way to store and use bitcoins. The company does not provide online bitcoin wallets that are often susceptible to theft. Diamond Circle wallets and private keys are stored only on the wallet tag devices and paper receipt backups.
“Even if we get hacked, there’s nothing to take,” Rowlison said.
Diamond Circle will save a fortune by not handling physical cash. Once a machine needs to handle paper (or in Australia’s case, polymer) dollar bills it reduces the value proposition by increasing the costs of its production, materials and maintenance.
He insisted the technology itself was a lesser challenge, since it uses mostly off the shelf components that have already been tested in other payment systems.
“Once we ironed out the problems of bitcoin, the value proposition for consumers and the entire supply chain becomes obvious. instant cheap international money transfer and payments.”
Working with the current financial system
Often the bigger test faced by Diamond Circle and other bitcoin startups is learning to function within the regulatory environment. Rowlison said his focus has been on developing a compliant product with all KYC/AML regulations built in, meaning Diamond Circle ATMs are fully compliant.
This focus has helped the company form the necessary partnerships with banks and other financial institutions, though there has still been some resistance.
“It hasn’t been easy, we’ve had two rejections from major banks,” Rowlison continued.
“They just need to understand risks can be managed, it’s just a matter of getting that through to them. I don’t see it as an ‘Us vs Them’ situation, bitcoin is just another currency, we can coexist. We need to figure out how we can cooperate.”
He said there had also been “a bit of pushback on locations” from larger shopping malls worried about the product being delivered. The company may need to prove its technology first in a smaller location, like the coffee shops and cafes that house bitcoin ATMs elsewhere, then move to larger centers.
International interest
The company is an ‘Enrolled Money Transmitter Business’ and is run by a team with extensive C-Level experience in various fields of compliance in Australia and in the US.
Diamond Circle has received international interest in their ATMs already with queries from customers in in the UK, Canada, USA, Asia and the Middle East, and says it has already sold two of its ATMs within Australia and one to the UK.
The company is listed on cryptostocks.com under the ticker XDC, a direct pass through to their underlying shares, which helped them raise initial seed capital.
Images via Diamond Circle