Having been in the ATM business for almost two decades, I have been able to uncover the mystery behind how ATMs work as a business. There is no magic potion, but there are several pitfalls and pitfalls that can be avoided if you work with an experienced ATM company. It is very similar to a vending business, the main differences being that this vending machine dispenses cash and deals with banking regulations. The only inventory is twenty dollar bills.

The ATM business is simple. Let’s see all the parts.

• You have a piece of hardware (the ATM).
• You need a good location (retail store, parking lot, restaurant, condominium complex, office building, hospital, medical building, airport, etc.).
• You need to fill the ATM with cash (yourself, the location manager, or an armored car company).
• You need a reputable ATM company (they have contracts with an ATM processor, sponsoring bank, move your money between banks, provide online statements and reports). They should also provide tech support, but some don’t.
• You need your own bank account, where the funds are deposited if you load cash.
• Revenue comes from the surcharge (the fee customers pay to use the ATM) a part of the interchange (the fee banks have to pay for the network and processor) and then deduct some network fees. This works a bit more than overloading (we’ll explain that later or you can skip to the bottom).

Many ATM companies try to make it sound complicated, but if you’ve been at it long enough, it should be a streamlined process. ATM companies that claim to sell you locations, or find your ATM locations and get you to invest in them, are likely scams.

Personally, if I found a good location to put an ATM, why would I offer it to someone else if I could put my own ATM there and make a profit? There are a few reasons, maybe I’m out of state and need someone locally, okay, that’s a good reason. But if I’m a local to the place, I would never part with a good place unless it’s going out of business or selling a route.

Knowing the rules, getting all the facts, and crunching all the numbers can ensure that if you invest in ATMs, you’ll make a smart investment and a good business decision. Like any business, you want to know how much you need to invest and what the return is. This is the return on investment. How long will it take and the income is better than other known instruments. Is the ROI better than keeping the cash in the bank in a regular savings account? Well these days just about anything pays better than a savings account. Just like real estate, it’s all about location, location, and location.

If you select the wrong ATM company to help you navigate the waters, costs can add up and affect your ROI.

Automatic cashier. Obviously a key component to your business. Buying the wrong machine, an outdated (non-compliant) machine, or not getting a machine from one of the top three manufacturers (Triton, Tranax, Hyosung) can be a nightmare. Freestanding, Through the Wall or Kiosk, which is best for your needs?

The location: Another key component to making sure you’re successful is checking how many people are visiting the location you select. Do you accept credit cards? Are you an all cash business? What are the other important questions? An experienced ATM company can help answer all of these questions and more to help you determine if the location might have good potential.

Who loads cash: The ATM owner and the cash loader typically share most of the ATM revenue. So if you plan to own the ATM and charge it yourself, obviously you’re going to keep most of the revenue. Apart from the cost of the space (you can rent it, sign a placement contract for a part of the income, etc.). There are many types of offers you can make. Armored car service is only a viable option if the ATM works really well (500+ transactions per month). Armored car service is expensive and typically cost prohibitive for retail ATMs.

A reputable ATM company will help you with all of the above information, but more importantly, they should help you with your ATM ordering process, arranging for delivery, installation, training and scheduling to ensure that cash transactions are reliable and secure.

A good ATM company should also provide 24/7 free technical support. We see many ATM companies that do not offer this. However, they appear to be a good deal because they offer an unusually high discount. But what good is a high refund if your machine has an error code or a problem, or if you have a problem that you can’t solve because you have no one to call for help? Or when you call, no one answers the phone. The extra few cents you can earn from some of these ATM companies can cost you hundreds of dollars when it comes to needing the service. Don’t be wise with pennies and foolish with pounds.

How do you earn money with ATMs?

Your ATM charges a fee to the cardholder (called a surcharge or convenience fee); you, the ATM owner, set this fee. Depending on which ATM company you sign up with, you will receive most or all of this fee plus a portion of the exchange. Banks pay a small fee to ATM networks for connecting the cardholder to the bank, this is the exchange.

There are many variations and offers similar to credit card processing. An honest ATM company should give you 100% of the surcharge and depending on the number of transactions your ATM makes or the size of your ATM portfolio (if you have multiple machines), they will give you up to $0.15 of the exchange.

To manage your ATMs, you need to make sure that the ATM company offers 365/24/7 free technical support. They must also provide you with monthly statements and access to monitor your ATM online at no charge. Other benefits of a reputable ATM company include monthly minimums, monthly fees, and statement fees. Small, inexperienced ATM companies that cannot offer economies of scale may charge for services, while others may not. Caviate Emptor, Buyer Beware!

Do you want to know more about the ATM business? Check out the links in the authors’ resource box below.