Site Selection Is Strategy
Where you place the machine determines everything.
This is not marketing wisdom or real estate platitude. It is the central operational truth that separates profitable Bitcoin ATM networks from expensive lessons in depreciation. I have watched operators with superior machines and lower fees fail because they chose locations based on intuition. I have watched operators with aging hardware and aggressive pricing thrive because they understood something fundamental: the machine is inert until the location activates it.
In traditional ATM deployment, the calculus is relatively simple. You need foot traffic, visibility, and proximity to commerce. People need cash; they will find the machine. Bitcoin ATMs operate under a different physics entirely. Your customers are not responding to a universal need but to a specific intent—an intent shaped by demographics, trust, accessibility, and the particular anxieties that accompany converting government currency into bearer digital assets. The location does not merely present the machine. The location qualifies the customer.
I learned this slowly, expensively, and repeatedly.
The Demographic Equation
Every location exists within a demographic context, and that context predicts transaction behavior with surprising precision. This is not about stereotyping neighborhoods but about understanding the economic forces that drive Bitcoin adoption at the street level.
Consider the fundamental question: Who uses Bitcoin ATMs, and why?
The academic answer involves financial inclusion, the unbanked population, privacy-conscious users, and cryptocurrency enthusiasts. The operational answer is more granular. In my experience, Bitcoin ATM customers fall into distinct behavioral categories, each with different transaction patterns, fee sensitivities, and location preferences.
The remittance sender uses Bitcoin as a rail for international money transfer. They are often immigrants sending value to family abroad, people who have discovered that converting cash to Bitcoin, then Bitcoin to local currency, can be faster and cheaper than traditional remittance services. These customers transact regularly—often weekly or biweekly, aligned with payroll cycles. They are price-sensitive but loyal once they trust a machine. They cluster in neighborhoods with high immigrant populations, near check-cashing stores and international calling card shops, in the commercial districts that serve working-class communities.
The privacy seeker wants to acquire Bitcoin without the identity verification required by exchanges. They accept higher fees as the cost of avoiding the KYC apparatus. Their transactions tend to be larger and less frequent. They prefer locations that offer discretion—not secrecy, but the absence of social surveillance. A machine in a busy mall food court does not serve this customer. A machine in a quiet convenience store, accessible but not exposed, does.
The crypto-native already holds Bitcoin but occasionally needs to convert cash—perhaps from a side business, perhaps from a transaction they prefer to keep separate from their bank account. They understand the technology, compare fees obsessively, and will drive twenty minutes to save two percentage points. They are your least loyal but most vocal customers. They leave reviews. They complain on Reddit. They also serve as unpaid evangelists when the experience meets their standards.
The curious newcomer has heard about Bitcoin and wants to participate without the complexity of exchange accounts and bank transfers. They are intimidated by the technology, reassured by the physical interface, and willing to pay a premium for simplicity. Their first transaction is small—fifty dollars, perhaps a hundred. If the experience is positive, they return. If it is confusing or feels unsafe, they do not.
Each of these customers has a different relationship with location. The remittance sender needs proximity to their daily patterns—near the grocery store, the laundromat, the bus line. The privacy seeker needs accessibility without exposure. The crypto-native needs competitive fees and reliable uptime. The newcomer needs a location that feels legitimate, that reassures them they are not being scammed.
When I evaluate a potential site, I ask: Which customer does this location serve? If the answer is unclear, or if the answer is "all of them," I have not thought carefully enough.
The Foot Traffic Fallacy
Early in my operating career, I pursued foot traffic with religious devotion. More people meant more potential customers. The mathematics seemed irrefutable. I negotiated placement in busy shopping centers, high-traffic convenience stores, popular gas stations. I paid premium rents for premium visibility.
The machines sat idle.
Not entirely idle—they generated transactions. But the transaction volume bore no relationship to the foot traffic. A machine in a convenience store serving twelve hundred customers daily might process fifteen transactions weekly. A machine in a quieter location, serving perhaps two hundred daily visitors, might process forty.
The fallacy is assuming that foot traffic converts to Bitcoin ATM usage at a consistent rate. It does not. The conversion rate varies by orders of magnitude depending on the composition of that traffic.
Foot traffic measures bodies. What matters is intent—not the intent to use a Bitcoin ATM specifically, but the constellation of needs and behaviors that correlate with Bitcoin ATM usage. A busy location filled with people who will never, under any circumstances, use a Bitcoin ATM is worthless. A quiet location that consistently attracts your target customers is gold.
I began to understand this when I analyzed my transaction data geographically. The patterns were stark. Machines in wealthy suburban shopping centers—high foot traffic, high visibility, premium rent—generated weak returns. Machines in modest strip malls serving working-class neighborhoods—moderate traffic, lower visibility, reasonable rent—generated strong returns. The explanation was demographic alignment. The suburban shoppers had bank accounts, credit cards, Coinbase apps on their phones. They had no need for my machines. The working-class customers had cash from jobs that paid cash, obligations that required international transfers, and a rational preference for financial tools that did not require banking relationships.
Foot traffic is not irrelevant. A machine in a location with zero traffic will process zero transactions. But foot traffic is a necessary condition, not a sufficient one. The question is never "how many people pass this location?" The question is "how many of my customers pass this location?"
Learning to see locations through this lens changed everything.
High-Risk, High-Reward: The Geography of Opportunity
Some locations terrify new operators. They exist in neighborhoods that insurance companies flag, that equipment financing requires additional collateral to serve, that polite society pretends do not exist. These locations can be extraordinarily profitable.
I am not romanticizing poverty or dismissing legitimate safety concerns. I am observing that the demographics most likely to use Bitcoin ATMs—the unbanked, the underbanked, the cash-economy workers, the remittance senders—often live and work in neighborhoods that appear "risky" to operators approaching the business from comfortable circumstances.
The risk is real but manageable. Machines in high-crime areas face higher vandalism and theft rates. The operational overhead increases—more frequent site visits, faster response to security alerts, stronger relationships with location owners. But the transaction volume often compensates, and compensates substantially.
I operate machines in neighborhoods where I would not walk alone at night. I also operate machines in gleaming suburban convenience stores attached to upscale fitness centers. The neighborhood machines outperform the suburban machines by ratios that would embarrass my early assumptions.
The calculation involves honest assessment of several factors:
Physical security infrastructure. A location with cameras, good lighting, and an attentive owner mitigates much of the risk. A location that is poorly monitored and casually managed amplifies it.
Insurance and reserve requirements. Higher-risk locations require larger cash reserves against potential losses. This affects your capital allocation. Can you absorb a total loss of the cash in that machine? If not, the location is not appropriate for your current capitalization, regardless of its theoretical potential.
Relationship with local law enforcement. In some jurisdictions, operating in certain areas invites scrutiny that may not be worth the transaction volume. Understand your regulatory environment.
Your own operational capacity. If a machine goes down, how quickly can you respond? If response time is measured in days rather than hours, high-risk locations become untenable. The machine becomes a target, and your delayed response becomes an invitation.
The operators who avoid high-risk locations entirely are leaving money on the table. The operators who pursue them naively are courting disaster. The correct approach is systematic: evaluate the risk, price it, mitigate what you can, and make informed decisions about what remains.
Why "Busy" Does Not Mean "Profitable"
Let me describe two locations I operated simultaneously for eighteen months.
Location A: A convenience store in a mixed-use commercial district. The store served a diverse customer base—office workers grabbing coffee, construction crews buying lunch, neighborhood residents picking up essentials. Foot traffic was strong, averaging perhaps four hundred transactions daily at the register. The store was clean, well-lit, and professionally managed. Rent was $400 monthly plus a small transaction share.
Location B: A check-cashing store in a strip mall. The customer base was narrow—people cashing paychecks, paying bills, sending money orders. Foot traffic was modest, perhaps eighty customers daily. The space was functional but not inviting. Rent was $350 monthly, flat.
Location A felt like the obvious winner. It had more traffic, better aesthetics, a more "professional" environment. Location B felt like a compromise—acceptable but not exciting.
Over eighteen months, Location A processed an average of 19 transactions per week, with an average transaction size of $180. Monthly gross revenue: approximately $2,700 (at a 10% blended fee). Monthly profit after rent and operational overhead: approximately $1,800.
Location B processed an average of 47 transactions per week, with an average transaction size of $220. Monthly gross revenue: approximately $8,200. Monthly profit after rent and operational overhead: approximately $7,200.
Location B generated four times the profit of Location A despite having one-fifth the foot traffic.
The explanation is intent. Everyone who walked into Location B was there to conduct a financial transaction. They were already thinking about money, already holding cash, already comfortable with non-bank financial services. The Bitcoin ATM was not a novelty but a natural extension of the services they expected to find. The convenience store customers were thinking about coffee and cigarettes. The financial services customers were thinking about money.
"Busy" describes the location. "Profitable" describes the fit between your machine and the location's customers. These concepts are related but distinct, and conflating them leads to systematic misallocation of machines and capital.
The Art of Reading a Location
When I visit a potential site, I observe before I measure. I stand outside and watch. Who enters? What are they carrying? How are they dressed? What vehicles do they drive? How long do they stay? I am not making judgments. I am gathering data.
Inside, I watch the transactions. What are people buying? Cash or card? Do they use the ATM? The lottery machine? The money order window? I note the other services available. Check cashing, bill pay, prepaid phones, international calling cards—each of these services suggests a customer base that might also use Bitcoin ATMs.
I talk to the owner or manager. Not about Bitcoin ATMs initially. About their business. Who are their customers? What do they buy? When are the busy periods? What services do customers request that they do not offer? The answers reveal whether Bitcoin fits the customer profile.
I study the physical space. Where would the machine go? Is there power? Is there connectivity? Is the location visible from the entrance, or hidden in a back corner? Can customers use the machine with reasonable privacy, or would they be conducting transactions in full view of a crowd? Each of these factors affects usage.
I research the area. Census data tells me about income levels, household composition, language spoken at home. Business licenses tell me about the commercial mix. Crime statistics tell me about risk. None of this data is determinative, but all of it is informative.
Finally, I consider the competition. Are there other Bitcoin ATMs nearby? If so, how close? What fees do they charge? What machines do they operate? Competition is not necessarily disqualifying—a location that can support one machine can sometimes support two—but it affects volume projections.
This evaluation takes time. A serious site assessment requires at least two visits at different times of day, several hours of observation, and genuine research. New operators want shortcuts. There are none. The operator who invests in site selection invests in everything that follows.
The Economics of Placement
Site selection is ultimately an economic decision, and the economics are more complex than they first appear.
The obvious costs are rent and revenue share. Most locations charge a monthly fee, a percentage of transaction volume, or both. These costs are negotiable, and negotiation leverage depends on how badly you need the location versus how badly the location needs you.
The hidden costs are operational. A location thirty minutes from your home or office costs more to service than a location five minutes away—not in rent, but in your time and fuel. A location that requires frequent cash replenishment because of high volume or low cassette capacity costs more than a location that can run for days without attention. A location with connectivity issues costs more in downtime and customer complaints.
The hidden revenues are equally important. A location with high average transaction size generates more revenue per transaction than a location with low average transaction size, even at identical volumes. A location with repeat customers generates more lifetime value than a location with one-time users. A location that builds your reputation generates referrals and word-of-mouth that benefit your entire network.
I model every location before committing. The model includes:
- Projected weekly transactions (conservative, moderate, optimistic)
- Projected average transaction size
- Fee structure (yours to the customer, landlord's to you)
- Operational costs (service visits, cash logistics, connectivity)
- Capital requirements (cash in machine, equipment value at risk)
The model produces expected monthly profit under each scenario. If the conservative scenario does not cover costs, I do not take the location unless I have strong conviction that the moderate scenario is more likely. Hope is not a business strategy.
Lessons Earned
I will close this chapter with the lessons I have internalized, the principles I would give my past self if I could reach him.
Match the machine to the market, not the market to the machine. Your customer exists before you arrive. Your job is to find them, not to create them.
Visibility matters less than alignment. A hidden machine in the right location outperforms a prominent machine in the wrong one.
Trust the data over the aesthetics. Clean, well-lit, upscale locations feel good but often perform poorly. Functional, modest, working-class locations feel risky but often perform well. Your feelings are not transaction data.
Interview the location. Talk to owners, observe customers, study the traffic. The location will tell you what it needs. Listen.
Competition is information. If a competitor already operates in a location, they have already validated the market. If they are struggling, they have already invalidated it. Learn from their experience.
Renegotiate aggressively. Location owners often do not understand what a Bitcoin ATM earns or costs. Their initial rent demand is a starting point, not a conclusion. Walk away from overpriced locations. There are always more locations.
Reserve the right to exit. Every contract should include termination provisions. Locations change. Customers change. Competition arrives. You need the flexibility to redeploy your machine when the economics shift.
Document everything. Transaction data, maintenance logs, customer feedback, photographs. Your network's history is your competitive advantage. Learn from your own experience, not just your intuition.
Site selection is strategy because every other decision flows from it. Your fees are constrained by your location's competitive environment. Your operational costs are determined by your location's geography. Your customer base is defined by your location's demographics. Your security requirements are set by your location's risk profile. Your reputation is built on your location's customer experience.
Get the location right, and the rest becomes manageable. Get the location wrong, and no amount of operational excellence will save you.
I have gotten locations wrong, often and expensively. Each mistake taught me something. The lessons in this chapter are not theory. They are scars, systematized.
When you stand in a potential location, asking yourself whether this is the place, remember: you are not choosing where to put a machine. You are choosing your customers, your costs, your risks, your returns. You are choosing, in a very real sense, your business.
Choose carefully.