An Automated Teller Machine (ATM) is a secured computerized kiosk that permits bank debit card holders to access their accounts, usually for purpose of withdrawing cash. Originally located outside banks, these machines are now found in retail locations everywhere and may be owned by the owner of the retail location or they may be owned by an investor who places a machine and splits revenue with the location owner. This article will discuss both methods of enjoying profits.
Machine revenue results from a ‘surcharge” a machine user pays when they perform a withdrawal or other transaction (such as a balance inquiry) at the ATM. Surcharges range from 99¢ to $3.00, commonly. The average surcharge is $2.00. This surcharge revenue is paid to the machine owner, usually on a monthly basis. Ten transactions daily would yield $750 per month revenue if the surcharge was $2.50. As may be seen, the up-front investment can be quickly regained, within a matter of months.
As a retailer with an ATM, you have an additional profit stream: statistically, 35% of cash withdrawn from the ATM machine in your store will be spent with you in your store. So you have increased sales, and the profit from those sold items, to add to your pocket. As an investor, this is a benefit you will want to point out to potential retail location partners when you approach them.
The initial investment for an ATM is around $2,500. Installation by a qualified technician is another $350. Those are the one-time fixed costs. There will be some sort of monthly cost to access the ATM network, whether by dial-up phone line, cellular or broadband wireless. As an investor you may arrange to split this cost with the location owner, or absorb this cost yourself.
Most machines now permit the owner to access the machine’s transaction online, and even receive alerts by email or text message, such as when cash is running low.
Cash is loaded into a cassette (that may be removable) and is usually single-denomination ($20 bills). Whatever cash is dispensed from the machine today will be refunded to the machine owner’s bank account every day via ACH direct deposit. The average location may be adequately stocked with $5,000 in cash and replenished daily. An owner may possess extra cash cassettes in order to quickly visit each owned ATM and simply swap out the half-empty cassettes for full cassettes. Removable cassettes also reduce time that the ATM is unlocked and open and vulnerable to theft or robbery.
For an investor with many placed machines, use of an armored courier service is an option. The service will perform all machine cash reloading for you.
You will want to insure your machine. If you are the retail location owner, this usually involves a telephone call to your business insurance agent to add the machine to your current business policy. If you are going to be an investor with machines in different locations, policies are available to cover theft, vandalism or robbery. Different insurance companies will require some security procedures to be in place, usually regarding secure installation; this will be handled by the certified installation contractor when machine is first delivered and installed.