Buying an ATM for your business can be an easy way to generate extra income through surcharge fees, additional foot traffic, and additional purchases. However not all businesses make decent money adding an ATM business to their store. In this guide we’ll walk you through how to:
- Determine if your store is a good fit for an ATM business
- Decide on what type of machine you want
- Choose your ATM business model
- Understand how ATM machine businesses operate
- Estimate how much you should expect to make
- How to go about buying an ATM machine
Step 1: Determine If Your Store Is A Good Fit
Adding an ATM to your store might seem like easy money but not always. After adding up the cost of the machine, the cash tied up in the machine itself, and the time it takes to managing the business, unless you have enough traffic and usage it may not be a good idea. Before taking too much time to research it make sure some basic math works out.
Just to give you a rough sense of it’s worth your time do a “back-of-the-envelope” calculation. According to ATM Experts, 3% to 5% of those whose see an ATM machine will use it. Bankrate says the average ATM surcharge $2.90. You’ll need to subtract about a $0.40 transaction processing fee. So approximately $2.50 in revenue per transaction. So for example if you get 100 people a day visiting your monthly revenue might look something like:
100 people / day * 30 days * 5% conversion * $2.50 = $375 per month
If you get a couple hundred people a day, on average it could be closer to $1,000 in revenue a month. If it’s 50 people a day it’s a couple hundred bucks a month. That should give you a rough sense if it’s worth the several thousand dollars investment to get an ATM machine business off the ground. None of this takes into account any additional foot traffic or purchases you’ll get from having an ATM business.
Assuming the quick math works out in general, some other questions you may want to think about that will affect usage include:
- Does your business or businesses next to you have cash-only services?
- Would your ATM be the only one within close walking distance of your location?
- Have customers asked you where the nearest ATM location is?
- Do businesses in your industry commonly have an ATM at their location (hotel, convenience store, etc?)
- Are your customers frequently paying with a debit card and getting cash back?
Answering yes to one or more of these questions will bode well for your eventual conversion rate and usage. Make sure that once your ATM is installed, you use a service such as Yext to update your online listings so that people searching for “ATMs near me” will see that your business has one. Scan your online listings for free to see what other information about your business you can update or improve.
Another thing to keep in mind is stocking the machine. According to Statistic Brain the average ATM withdrawal is $60. If you’re doing 20 transactions a day (the average is 8 to 10 a day) that’s $1,200 a day. So you’ll need to keep in mind how much you want to keep in the machine versus how often you’ll need to restock the cash.
Step 2: Decide on What Type of ATM You Want
So let’s assume you get enough traffic to make the investment of time and money worth it. Now you need to pick an ATM machine and its features. ATM machines cost between $2,000 and $8,000 when purchased new, but the typical range is in the $2,500 to $3,000 range.
When thinking through what machine you want for your ATM business here’s a list of the main features you’ll need to consider:
A big determiner of cost is going to be how modern the ATM looks. For a small deli you can go with a lower-end system. For those catering to wealthier clientele like hotels or resorts you may want to go with a sleeker design.
Screen Size and Type
Screens tend to range from 10 inches to 15 inches and can come with either touch or not. Larger screens and touch screens will run you more.
Locks options tend to range from standard electronic locks to S&G locks to Cencon. S&G generates a one time combination that is date and time specific. Cencon is the gold standard in ATM locks and include things such as dual token access control, one time combinations, encrypted electronic keys, alarm connectivity, internal power source, etc. If you’re going to be using a service to fill the machine you’ll probably want to upgrade to a software-based system like S&G or Cencon.
The main things about the note system is how many notes can it hold and how many cartridges it has. Larger cartridges and more cassettes makes for fewer and easier refills. The low end is just a 1,000 note drawer. At the high end you can get to up to 8,000 notes using multiple cartridges. This choice will depend on the volume you think you’ll be doing.
Generally there are two types of vaults: Business Hours and Level 1. The main difference is the strength of their walls and difficulty in opening. Business hours are designed to hold cash while there is someone on staff. Level 1 is designed to keep cash safe 24 hours a day, whether watched or not. They tend to weigh about 300 lbs or more and the steel can withstand 50,000 psi in physical pressure.
Other things you’ll need to decide on that don’t change the price as much as the items above include topper type (the signage on the ATM), language support, and freestanding or built-in.
The major ATM brands for small businesses include:
- Nautilus Hyosung
Here are a few examples of the range of prices and features you can expect:
Nautilus Hyosung Halo II
Check out our buyer’s guide to see which providers and specific ATM’s we recommend.
Step 3: Choose Your ATM Business Model
You need to decide on which ATM business model you’ll use. Generally there are three models for an ATM business: buy, lease, ATM placement where a placement company puts an ATM machine in your store with no setup costs but surcharge fees paid to you are much lower.
|Buy||• No ongoing costs beside maintenance|
• Generally can be resold if you want to exit the business
|• Highest start up cost of the 3|
• On the hook for any maintenance beyond the warranty
|Lease||• Lower startup cost versus buying|
• Often comes with a maintenance plan
• Usually option to buy machine at end of lease
|• Often a fee to exit the lease if you change your mind|
• More expensive overall if you buy at the end of the lease than if you buy upfront
|Placement||• Lowest startup cost of the 3|
• Easiest option to get up and running
• Option to have placement firm stock the cash or you
|• You must convince the placement company you’ll do enough business|
• You must maintain a minimum amount of usage
• Least profitable option over time
Which ATM business model you choose will likely depend on how confident you are in the ATM usage and how much capital you want to risk in the investment.
Step 4: Figure Out Where To Buy An ATM Machine
Where you buy your machine will be determined if you’re buying, leasing, or are you going to use a placement service for turnkey operations.
If you’re going to go the used route there are sites that focus on used ATMs and those that sell both new and used. Here are a couple of places to find used ATMs.
Here’s a few examples of dealers that carry new or both new and used ATMs:
Placement services will provide a completely turnkey solution and in turn they keep the majority of the surcharge revenue but will give you a cut. Here are a few examples:
Here’s a larger list of dealers, vendors, and related services from the National ATM Council.
Some Other Things To Consider
So assuming you’re now set to choose, find, and buy your ATM machine there are a few other things you may need to think about.
If you’re buying your machine you’ll need to select a payment processing service. The major players are U.S. Bank, First Data, Switch Commerce, Columbus Data, WorldPay, and Lynk Systems. However, unless you’re a large ATM operator you’ll likely be working with a smaller processing middle-man. Here’s a list from ATM marketplace.
You may want to not handle cash directly depending on the volume of transactions. In that case you’ll need to hire a cash management firm like Loomis or Brinks. This is especially true if you plan on having multiple machines at different locations.
Repairs and Parts
Eventually your ATM is going to need maintenance (such as cleaning gearing) or repair. You can try do this yourself or hire a local firm to do it for you.
Bottom Line: ATMs Can Be Profitable If You Have The Traffic
It’s easy to do some quick math to see if an ATM business makes sense for your small business. Roughly speaking every 100 people per day gets you about $350 per month. It’ll cost you anywhere from $2,000 to $8,000 for an ATM machine, but most likely you’ll be in the $2,500 to $3,000 range. You’ll need to decide on whether to buy, lease, or use a placement service for your ATM machine business. There’s some other stuff like payment processing, security, and maintenance you’ll need to consider. So, bottom line, if you have the traffic, starting an ATM business is pretty straightforward.