It's just never as easy as in the movies.
Biometric authentication seems all the rage now that Apple uses fingerprint ID in its mobile wallet, but the Bitcoin ATM provider RoboCoin has concluded that biometrics can be more of a hassle than a help.
Las Vegas-based RoboCoin started accepting pre-orders from ATM operators for its bidirectional machines (cash-in/Bitcoin-out or vice versa) in August 2013. The company touted its machine as more secure than competitors', in part because users scan their palm veins with a built-in Fujitsu PalmSecure system. The process was futuristic but too slow, so RoboCoin is eliminating it.
"Launching with [biometrics] was cool, removing it was even better," said Jordan Kelley, the chief executive of RoboCoin.
The startup spent tens of thousands of dollars on the project and hundreds of thousands on labor integrating biometrics into its ATM hardware. "It was not a cheap investment but we learned... a lot about biometrics, customer security and customer enrollment," Kelley said. "And we set an interesting precedent for Bitcoin."
In tests, biometric authentication added too many steps and slowed down the enrollment and transaction processes too much. While Kelley watched consumers use the RoboCoin machine that l aunched in Vancouver last November, he said his initial impression was: "Holy cow, the workflow is terrible; it's not convenient."
Now, without the requirement to use a palm print, customers can enroll and start doing business in less than a minute, Kelley said. (At enrollment, customers choose a personal identification number and have pictures taken of their faces and photo IDs.)
Users will enter their phone numbers each time they walk up to a RoboCoin machine. A verification code will be sent via text message for the user to input along with his or her PIN.
RoboCoin was also worried about other limitations of biometrics. "When we're thinking about other products and other verticals, having to be pigeon-holed into using only machines with biometrics was going to be difficult," he said. "Making sure our software can go anywhere is very important."
Kelley hinted that RoboCoin may someday focus solely on software. Eliminating biometrics makes the company "one more step removed from hardware."
Biometric systems aren't out altogether for RoboCoin. "I'm always excited about the idea of biometrics for wallet authentication," Kelley said. When RoboCoin launches its iOS app in the near future, the company will do "cool stuff" with Touch ID, he said.
RoboCoin has shipped nearly 100 machines, 45 which are live in 18 countries. The machines support 14 currencies and 19 languages. Each ATM gets used three to 10 times a day, said Kelley. Average Bitcoin purchases are $370 and average sales are $770, he said.
RoboCoin machines cost $15,000 and the company takes a 1% commission on the fee that ATM operators charge per transaction. On average, operators charge 5% per transaction, Kelley said, and they break even in about seven months.
While most RoboCoin users are Bitcoin enthusiasts, Kelley said he'd like the machines and Bitcoin in general to become an alternative for underbanked consumers who typically keep cash under a mattress.
"We're starting to see some really interesting remittance networks popping up," he said. "We've built the Redbox of remittance."