Largest Swiss railway company turns 1000+ ticket machines into bitcoin ATMs

The national railway company of Switzerland, Swiss Federal Railways (SBB), recently announced a new service. Starting on November 11, Swiss customers will be able to buy bitcoins from over 1000 SBB ticket machines.

Switzerland has long been a bitcoin-friendly country. In April, the Swiss Federal Tax Administration (FTA) made a decision exempting bitcoin from Value Added Tax (VAT), after three bitcoin organizations asked for clarification in 2014. “This is the most reasonable way to classify Bitcoins in the context of VAT,” said Luzius Meisser, President of Bitcoin Association Switzerland. “Bitcoin is a currency, and thus should also be treated like a currency.”

“Until now, there have only been limited opportunities to purchase Bitcoin in Switzerland.”
— – Swiss Federal Railways

The European Commission on rail services states that Switzerland has a dense rail network with a highly-integrated timetable and three distinct operators. SBB has with over 9,000 trains traveling daily. Its 3,030 route kilometers make up almost 40 percent of the country’s 7,590-km rail network. All cantonal capitals are on the SBB network, except Herisau and Appenzell. There are 794 SBB stations and halts throughout Switzerland, all of them with ticket machines. With 33,000 railway employees, SBB is also one of the biggest employers in the country.

The company claims that they transport 441 million passengers every year, about 52 times as many people as there are residents in the small country of 8.36 million. According to the Swiss Information Service for Public Transport (LITRA), Swiss residents make 59 journeys on average per year.

A report by international internet payment specialist Datatrans revealed that, as of last December, the proportion of SBB’s self-service ticket sales was 75 percent, 16 percent of which were online. Datatrans handles all payments made via the SBB Mobile app. “SBB is planning to increase the proportion of self-service ticket sales from 75% to 90% by 2023,” the report states, adding that online tickets are projected to match ticket machine sales.

“Nowhere in Europe do people travel as frequently and as far by train as they do in Switzerland […] The only country in the world with a higher level of railway usage is Japan.”
— –  Swiss Information Service for Public Transport

SBB has been testing whether there is a market in Switzerland for selling Bitcoin over the past two years. The investigation lead to a partnership with a regulated financial intermediary, SweePay. SBB ticket machines will connect customers directly to SweePay for bitcoin purchases.

SweePay was founded in 2014 and designs, delivers and operates payment and distribution services. The company’s prepaid products include paysafecard, international airtime Topup, gift cards, prepaid cards, and bitcoin. The company directly connected to paysafecard, TransferTo, the Rock Trading bitcoin exchange and a leading prepaid cards and giftcard provider.

The startup is based in CryptoValley Zug, a little town in central Switzerland known as the Silicon Valley of Europe for cryptocurrencies and blockchain technology. Zug City Council is currently trialling bitcoin payments for municipal registration fees, up to 200 Swiss francs. The trial period runs from June until the end of this year, when the town will decide if it wants to continue accepting bitcoin payments in the future.

In a phone interview with CBC News, Zug’s Mayor Dolfi Mueller said, "It’s something new. People don’t know what it is. People are afraid it’s for killers or criminals. It’s not that — it’s very simple." Niklas Nikolajsen, CEO and co-founder of Bitcoin Suisse told the Neue Zürcher Zeitung newspaper, “This is the first time worldwide that Bitcoins have been accepted as a currency on a state level.”

"Acceptance is not far away. It won’t be a hard-hitter among people in the second half of their lives, but for younger people it will be common."
— – Niklas Nikolajsen, Bitcoin Suisse CEO

The SBB ticket machines were upgraded last August. The new machines allow contactless payments using Postfinance-Card, which is a card for postal accounts, American Express, Mastercard’s PayPass, and VISA’s payWave credit cards. Change for up to 100 francs is available and large notes are accepted up to 200 francs/euros.

To buy bitcoin at an SBB ticket machine, a bitcoin wallet is required. SBB provides a link to the independent listing of bitcoin wallets from bitcoin.org’s Choose your Bitcoin wallet. Customers only need to identify themselves using a mobile telephone number.

Between 20 and 500 Swiss Francs can be exchanged for bitcoin per transaction. Customers select the “Mobile top up” option on the ticket machine, and then scan their QR code on their bitcoin wallets. However, “You cannot top up Bitcoin by credit card,” SBB clarified in its announcement.

While Bitcoin ATM tracking site CoinATMRadar has not added SBB to their list of bitcoin service providers yet, the new network should put SBB in the top ten largest Bitcoin-selling service networks globally, about the same size as Bitcoin Australia’s network of 1004 listed bitcoin-selling Blueshyft kiosks.

The major difference is that SBB’s machines are used on average more than once a week by each resident of the country, ensuring that everyone in Switzerland has easy, if not frequent, access to bitcoin. For the purpose of branding and advertising bitcoin to a large audience, Switzerland’s 8.3 million residents is easily the world’s largest captive market.

CoinATMRadar shows that Switzerland currently has 14 bitcoin-selling ATMs deployed across the country, and about half of them are operated by Zug-based Bitcoin Suisse. The bitcoin startup has been working to establish the largest brand of bitcoin ATMs, putting new, two-way BitXatm machines in eight of the larger Swiss population centers so far.

The company operates a bitcoin ATM network allowing customers to buy and sell bitcoin for cash. However, the unlucky company invested heavily in the German BitXatm brand, which was hacked last month. Bitcoin Suisse then reported ATM stability issues, so only bitcoin purchases are possible, although the company does plan to replace all of their machines.