By Isaias Seth
A decade ago, Neil Bergquist was stuffing six figures of cash into a JanSport backpack, anxiously waiting for banks to open so he could deposit money from his Bitcoin ATMs. “We’d empty six figures of cash onto the counter. The bank teller’s expressions were priceless,” he recalled in a 2024 interview.
Today, his APIs process cryptocurrency transactions seamlessly, powering everything from self-custody wallets to gaming platforms. The transformation from hardware operator to software infrastructure provider represents one of the most significant pivots in the cryptocurrency industry—and offers valuable lessons for entrepreneurs building in emerging markets.
The Humble Beginning
Bergquist launched Coinme in 2014 with the first licensed Bitcoin ATM in the United States, one of only ten such machines deployed globally at the time. The operation was decidedly low-tech: customers inserted cash, received Bitcoin, and Bergquist handled everything else manually.
“All we did was put out fires on a day-to-day basis,” Bergquist explained in interviews. “The ATMs would malfunction, which seemed to happen every few days. A customer’s ID would get stuck in the ID reader and, reasonably so, they needed it back as soon as possible. It didn’t matter how far away you were; you needed to visit that ATM immediately.”
The biggest challenge proved to be cash logistics. Thousands of dollars accumulated in each machine, requiring regular collection and bank deposits. Without access to armored car services used by established businesses, Bergquist and his team handled collections personally.
“After much discussion, we decided the best approach was to put on street clothes, visit the ATM late at night with a JanSport-type backpack and stuff it full of cash from the cash acceptor,” he recounted. “Then we’d wait anxiously for the bank to open, wait in line, and then, when it was our turn, we’d empty six figures of cash onto the counter.”
The Transformation Moment
The pivot from hardware to software began as Bitcoin approached significant price milestones, attracting attention from established financial institutions. Rather than continuing to deploy physical ATMs—a capital-intensive, operationally complex business—Bergquist recognized an opportunity to leverage his regulatory expertise and technical infrastructure differently.
The breakthrough came through partnerships with established companies. Instead of building thousands of new ATMs, Coinme integrated its software into existing networks. The partnership approach transformed Coinme from a small hardware operator into the software layer powering larger crypto access networks.
The B2B Vision Emerges
The success of infrastructure partnerships revealed a larger opportunity. Companies wanted to offer cryptocurrency services but lacked the regulatory licenses, technical expertise, and operational infrastructure to build solutions independently.
The modular approach allows partners to select specific services—payment processing, custody solutions, or redemption capabilities—based on their unique needs.
XO Pay Success and Market Validation
The strategy’s effectiveness became clear with the launch of Exodus XO Pay in May 2025, powered by Coinme’s Crypto-as-a-Service platform. XO Pay allows users to buy Bitcoin and other digital assets directly within the Exodus mobile application using familiar payment methods like Apple Pay and Google Pay.
According to the official announcement, XO Pay is “the first self-custody wallet with native on-ramping” and “eliminates the need for third-party exchanges, providing a seamless crypto buying experience for customers with all the benefits of self-custody.”
The integration eliminated traditional friction points that have historically complicated cryptocurrency purchases. Users complete transactions in under 60 seconds without leaving the Exodus interface, while Coinme handles regulatory compliance, fraud prevention, and payment processing behind the scenes.
“By creating a Web2 checkout experience into a Web3 self-custody wallet, Exodus has set a new bar for crypto user experience,” Bergquist noted in the XO Pay announcement. “Exodus’ innovative integration of Coinme’s APIs delivers the seamless in-app purchase flow users expect while keeping them in full control of their assets.”
Scaling Through Partnership
The transformation from direct competition to partner enablement has created scaling advantages. Rather than acquiring customers individually, Coinme gains access to entire partner user bases through single integrations. Each successful partnership validates the platform for additional prospects.
The approach also reduces capital requirements and operational complexity. Partners handle customer acquisition, user interface design, and market-specific customization, while Coinme focuses on core infrastructure capabilities.
Bergquist’s journey from manually collecting cash to powering digital transactions illustrates how successful entrepreneurs adapt their business models while leveraging accumulated expertise. The infrastructure built to operate Bitcoin ATMs became the foundation for a much larger opportunity—one that transforms how entire industries access cryptocurrency capabilities.
Related: Neil Bergquist on How Coinme’s API Platform Is Democratizing Crypto Infrastructure
