Owning and operating ATMs can be a great way to generate extra income. As an ATM business owner, buying atm machines, finding locations to install them, fill them with cash, and getting paid each time someone uses the machine.
The cash withdrawn goes into your bank account daily along with the surcharge fees which are usually shared with the merchant who allows you to install the machine. In addition to this, you also earn additional interchange charges for each transaction.
All the machines are monitored online using a portal that gives real-time information on how much cash is in each machine and how many transactions have been made along with income earned from fees charged.
People usually don’t mind paying a few dollars in service fees at the nearest ATM when they need access to cash so having strategically placed ATMs in public locations around town is a good business opportunity for entrepreneurs looking for passive income without investing much money or time.
How to start an atm business?
If you’re looking to start a business that supplies ATMs to small businesses, there are some important things you should know.
Before starting any business, do your research on the market size, major competitors, and funding options.
Here are some steps to follow as you start your ATM business:
- Startup costs may include renting office space, buying equipment, paying legal or business-creating fees, and hiring staff.
- Create a list of retail locations that would be suitable for an ATM. Potential customers may include gas stations, bars, and convenience stores.
- Offer ATMs to retailers and small business owners. Negotiate the best deal for both parties, taking into account costs if you’re providing a full-service package.
- Install ATM, load cash, and begin collecting fees. If you are using a full-service model, make sure to service the ATM regularly to keep it running properly.
- Expand your business by adding new locations and providing them with ATMs. As your customer base grows, you will need to hire more staff and increase the number of ATM machines you have.
Which types of businesses should have ATMs?
Businesses that often have ATMs on their premises include:
- If you only accept cash, you should make it convenient for customers to pay. Therefore, many cash-only restaurants provide ATMs on-site. These ATMs not only remove the need for credit card processing fees but can also add to your profits.
- At both cash-only & non-cash bars, customers can use ATMs to withdraw money. At non-cash bars, this money can be used on activities like playing a jukebox or pinball machine – meaning it will eventually come back to the customer in some way.
- At gas stations, paying with a credit card typically costs more than cash. With an ATM on-site, customers have the option to either pay more for the convenience of using a credit card or withdraw cash to save money.
- Convenience stores often require a minimum amount for credit card purchases due to the high cost of processing fees associated with smaller payments. To make it easier for customers, many stores also have ATMs on-site.
- Customers who only need a few items may find it faster to pay with cash at the grocery store, as using an ATM on-site may be beneficial.
- ATMs are essential for a casino’s success since customers need to exchange cash for poker chips & use cash on slot machines.
Advantages of Using an ATM Machine
Installing an ATM at your business can be beneficial. If you’re a cash-only business, having an ATM available allows customers to withdraw money for purchases. Plus, you’ll get extra commission from the machine.
The main advantages are
- The ATM could bring in more revenue for your establishment through commissions earned on each transaction, as well as from new customers who come to use the machine.
- By offering customers the option to pay with cash within your business, you are providing them with a convenient experience.
- ATM companies offer flexible plans that can be tailored to fit the needs of your business. You can choose to buy or lease your machine, and there are both short-term and cancel-anytime contracts available. Additionally, many ATM companies provide marketing support to help you promote your ATM.
- Putting an ATM inside your store can help reduce credit card processing fees by encouraging customers to pay with cash.
10 Tips on Buying Atm Machines as an Investment
This guide will give you advice on how to set up & run your own ATM business, including how to register it and meet legal requirements.
Plan out your business
- The expenses associated with starting an ATM business.
To start a vending machine business, the total investment depends on how many machines you purchase. Each machine costs between $3,000 & $10,000. You’ll need to have at least $2,000 cash in each machine. Additionally, an insurance policy, a bag for transporting cash, tools for maintenance & a reliable vehicle are needed. Each machine must be connected to either a phone line or the Internet and you’ll need a computer to monitor the status of your machines.
- The costs involved in running an ATM business
To start an ATM business, you need to have a minimum of $2,000 in cash on hand each week. It’s recommended that the cash is loaded in regularly. Banks may charge your business additional fees & merchants may require a monthly rental fee or commission as part of their contract with you. As a new business owner, it’s important to do research into your local market so that margins are set correctly from the beginning for better profits.
- Target market
Your ATM business provides easy access to cash for customers at various locations, such as restaurants, bars, strip malls, convenience stores, & shopping malls.
- Profit can be made from the ATM business
ATMs located in places with a lot of foot traffic tend to be more successful. Business owners typically make $500 per month for each machine they have.
- Increase business profits.
Investing in franchises can be very profitable for new business owners. By learning how franchising works, you can help others by providing them with franchise opportunities.
Set up a phone system for your business.
Setting up a business phone system is a great way to keep your personal life and business life separate & private. It also helps automate your business, boosts its legitimacy, and makes it easier for customers to locate you.
Open a bank account & credit card
Having separate business banking and credit accounts is essential to protect your personal assets, like your home, car, and other valuables. This is known as “piercing the corporate veil” in business law. If you mix personal and business accounts, your personal assets may be put at risk if your business is sued.
- Opening a business bank account is not only a requirement when applying for business loans, but can also be beneficial to businesses.
- Keeping your personal assets separate from the company’s assets is important for protecting them.
- Accounting and tax filing can be simpler.
- Getting a business credit card can help in various ways.
- Keep business expenses separate from your personal expenses by setting aside a specific place for them.
- Create a credit history for your business to help you access funds in the future.
Set up accounting for a business
It is important to keep track of your expenses and income in order to understand how well your business is doing financially. Keeping accurate records will make filing taxes a lot easier.
Register to pay taxes
To open a business, you’ll need to register for state and federal taxes. Applying for an EIN (Employer Identification Number) is free and simple. Depending on your business, you may be required to pay certain state taxes such as sales tax or franchise tax.
Get the required permits and licenses
Failing to get the required permits & licenses can lead to large fines or even cause your business to be closed.
- State & Local Business Licensing Requirements
To operate an ATM business in your state, you may need certain permits & licenses. To find out what these requirements are, go to the Small Business Administration’s website for information on state licenses & permits.
- Services Agreement
Before installing a new ATM machine, businesses should have their clients sign a services agreement that outlines payment terms, service expectations & other details in order to minimize the risk of legal disputes.
Obtain business insurance
Businesses need insurance to operate safely and legally. General Liability Insurance is the most common coverage for small businesses, and Workers’ Compensation Insurance may be required for businesses with employees. Both of these policies help protect a company’s financial well-being in the event of a covered loss.
Create a legal entity
Setting up a business such as an LLC or corporation can help protect you in case of legal action against your ATM Business. You can choose to set up an LLC on your own & pay only the state costs, or you can hire one of the best LLC services for a small additional fee. The four most common types of business structures are sole proprietorship, partnership, limited liability company (LLC), and corporation.
Describe your brand’s identity
Creating a strong brand can help your business stand out from competitors. Use our Free QR Code Generator to add your logo to a custom QR code that can be used on business cards, publications, and websites to spread awareness.
- Promoting & Marketing an ATM Business
Develop strong connections with your merchants and network with other business owners in the community to build a positive reputation for your ATM business. Communication is key in establishing a long-term, mutually beneficial relationship with your merchants and ensuring that when a new entrepreneur opens a business, they will be sure to pass along your name. Little to no marketing is required for this venture.
- How to Retain Customers
Customers rely on you for convenience, so make sure your machines are always stocked with cash and working properly. Provide them with what they need, when they need it, in order to maintain a good reputation.
Create a website for your business.
Creating a website for your business is an essential step after you have defined your brand and designed a logo. In the past, many small business owners worried that creating a website was too hard because they lacked a website-building experience. However, due to recent advances in web technology, it is now much easier to build a successful website.
Here are the key reasons why you should not wait to create your website:
- It’s important for all businesses, big or small, to have a website.
- A business website that you own is not the same as having social media accounts such as Facebook pages or LinkedIn business profiles.
- Creating a basic website is now easy with website builder tools like GoDaddy Website Builder. You don’t need to hire a web developer or designer to make a website you can be proud of.
Should I get an ATM?
An ATM can be beneficial for a business if its customers tend to prefer cash payments rather than card payments. It’s worth considering if the number of cash withdrawals each month will be enough to make a profit from the ATM. Doing some calculations and thinking about how often customers will use it can help you determine if it’s worth your while. If so, then the extra money generated could be used to fund various business projects.
Ways to Enhance ATM Security
Security for access readers on ATM vestibules should also be increased as security for ATMs increases. Criminals can use the access reader to collect card data, then use a camera at the ATM to get the user’s PIN. Banks and credit unions should monitor vestibule log files to find out who’s accessing ATMs & when.
- Branch staff & technicians will conduct both scheduled and random physical inspections of ATMs.
- The detection system will alert and/or shut down the ATM if any device is connected to the card reader, keypad, or fascia.
- Jitter technology uses a start-stop motion when a card is inserted into it.
- Software or behavioral analytics can be used to detect unusual or unexpected behavior from a cardholder or terminal. Wilhelm refers to this as “collision” analytics which is when two events happen at the same time that doesn’t appear to make sense, such as using a card at an ATM not regularly visited by the cardholder, or withdrawal amounts & transaction times that are inconsistent with the cardholder’s usual behavior.
- A jamming mechanism is used to detect when a skimmer is placed on an ATM. When detected, the electromagnetic field will disable the skimmer.
- Ensure the locks on ATM enclosures are secure & test them before purchasing the fleet. If the locks are not strong enough, ask the manufacturer to upgrade or replace them.
- ATMs with Windows should have patches & software updates downloaded on a weekly basis. Unfortunately, some don’t get updated for two years or more.
- Secure the networks so that if one ATM is hacked, it cannot spread to the rest of the ATMs or even the entire corporate network.
- Monitor systems for any software changes that have not been approved or documented. Put measures in place to detect when the system is being altered. Banks should exercise the same level of caution with their ATM networks as they do with their online systems.
- Protect the system & ATM with multiple layers of security.
Frequently Asked Questions
How does an ATM process transactions?
Using an ATM is a relatively straightforward task for most people of a certain age. However, many do not understand what happens behind the scenes to make bank transactions possible. But the process is not complicated & can be easily understood.
How do I receive payment for transactions made with my ATM?
Investing in an ATM can be a lucrative option for business owners. By owning an ATM, you can generate extra income each time it is used. It’s important to understand how transactions work & the various ways you can make money off your ATM before investing in one.
Do I Have to Put Money Into My ATM?
If you own an ATM, understanding how it is filled with cash is essential. You can either fill the ATM with your own cash or hire a vault cash management service to provide the funds.
Who puts money in ATMs?
When ATMs run out of cash, it can be unclear who is responsible for refilling them. For ATMs located at banks, the bank itself takes charge of this task. Standalone ATMs may have different parties responsible for refilling them.
How Often Must ATMs Be Refilled?
When it comes to ATMs, one of the most important decisions for an owner is determining who is in charge of keeping it stocked with cash. Making sure the machine never runs out requires knowing when & how often to refill it.
ATM owners and operators use tracking systems to keep track of the amount of money in their machines so they can refill them before they are empty. This differs from machine to machine since some get more use than others, or hold different amounts of cash. Therefore, there’s no universal answer as to when ATMs should be refilled.
Can an ATM use my WiFi connection?
ATMs can now be connected to their host & banking network wirelessly, eliminating the need for a landline. All they need is an RJ45 Jack to connect to an Internet Service Provider & then they can do banking transactions.
Which types of cards can I use in my ATM?
ATMs offer a convenient way to withdraw cash from banks at any time. Nowadays, people carry many different cards in their wallets & purses that serve different purposes, but not all of these cards can be used at ATMs.
You can potentially generate passive income by setting up ATMs in various locations such as convenience stores or malls. Find a reliable company that allows you to place their ATMs in different businesses and you will earn a small cut of the revenue generated.
Outside ATM machines can charge up to $5 per transaction and you can make money from this. It may require some maintenance and isn’t completely passive, but if you set up enough machines you could earn a substantial amount of money each month.