In the banking world, branches came first and ATMs came later to streamline the experience. But in the Bitcoin world, ATMs came first with limited features, and the ATM makers are working hard to add the sort of services that one might find in a mainstream bank branch.

Lamassu Inc. is the latest provider to build out the capabilities of its Bitcoin ATMs, which are machines that, at a minimum, allow users to exchange government-issued currency for digital currency. The company's new backend software, called Rakia, allows operators to provide remittance services, bill payments and airport cash exchange.

"We have competition from all sides, and I think that speaks to how entrepreneurial this space is," says Zach Harvey, co-founder of Lamassu. "We are excited about the other open-source Bitcoin ATM projects and at the same time increasingly competitive about offering the best user experience for end users and flexibility for operators."

Lamassu Bitcoin machines, built by brothers Zach and Josh Harvey, at first only allowed cash purchases of bitcoins. In May, the company added a cash-dispensing floor stand called Santo Tirso.

The new Rakia software is open source, allowing operators to integrate third-party services and work with developers to extend the functionality of the machines.

For example, Harvey says, Bitcoin remittance services such as Kipochi and BitPesa could hook into the machine's software.

Lamassu was the first Bitcoin ATM provider, starting production in mid-2013, and it received more than 120 orders in its first four months.

"When we started developing our machine we had no competition. Now there are probably about twenty Bitcoin ATM manufacturers," Zach says. "That's happened in 18 months."

Lamassu machines will be independent nodes—applying Bitcoin's core principle of decentralization—with operators setting their own price, commissions and trading partners.

There's "no single point of failure and no single point of intrusion," says Zach. "A distributed network of Bitcoin ATMs will be significantly more robust than a centralized one and we have no interest in having a centralized database with the operational information of all the machines we've sold."

This is different from several of the other Bitcoin ATM providers in the industry, including Robocoin and Moneero.

Robocoin, based in Las Vegas, was the first Bitcoin ATM with bidirectional capability, allowing cash-out services in addition to the staple cash-in function. The company has promoted its ATMs as bank branches that allow buying and selling bitcoins and monitoring transactions in a user's Bitcoin wallet. Robocoin has since distanced itself from the word "bank" since in the U.S. only businesses with banking charters can use that label.

Robocoin's machines also let users send bitcoins to any phone number or email address. Recipients get funds in a Robocoin account if they have one, or are prompted to sign up for a Robocoin account if they do not have one.

The company has deployed its ATMs in the U.S., Israel, Japan, Singapore, Australia, the United Kingdom and Canada. During the first day of deployment of its ATM in Vancouver, 81 people used the machine to transact $10,000.

Robocoin has differentiated itself through its know your customer and anti-money laundering processes. When a user transacts at a Robocoin machine for the first time, the machine prompts the users to scan a government-issued ID and uses a biometric palm vein scanner for authentication. It also takes a photo of the user.

"We demonstrated this technology for the U.S. Congress in April, the Italian Parliament last week, and Robocoin operators are even being approved for money transmitter licenses," says Sam Glaser, who is responsible for growth at Robocoin.

And Moneero, a Bitcoin ATM provider based in Uruguay, plans to unveil new functionality in the coming weeks.

Moneero has been working on Rox, its currency-agnostic banking system in stealth mode for nearly a year. Steven Morell, co-founder and chief product officer at Moneero, has described its Moneero BTM, announced last year, as a way to "move Bitcoin out of the geek zone and into everybody's life."

Moneero's Rox platform allows users to hold any kind of currency in their accounts and can customize know your customer and anti-money laundering compliance to specific country regulations, Morell says. The BTM, Facebook app and SMS functionality are all "peripherals" on top of the Rox banking system, he says.

The Rox platform is in an invite-only beta period, and will be open to the public within a couple weeks. Moneero BTMs, which have been pre-ordered by about 100 people, will ship alongside the rollout of Rox, says Morell. The first BTM will be installed in Uruguay, he says.

"We're seeing a lot of people doing something similar to what we do and that's great because it backs up our thinking," Morell says. "We see everybody getting more professional; Bitcoin…is making huge progress."

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