Click on any of these topics to jump to that section
1- Overview of ATM business
2- Sales and Equipment
3- ATM Processing
5- Service and Installation
6- Location Types
7- Finding Locations
8- Basic Script for Cold Calls
9- Setting appointments and getting the location
10- What is needed for an installation?
11- Marketing and Advertising
13- Banking and capital requirements
14- Deployment Strategies
15- Growth Strategies Current opportunities
16- Potential Income and Expenses
17- Startup Checklist
1-High level Overview of the ATM Business:
Owning and maintaining ATMs is a way many people earn a living and create additional or passive income streams.
As an owner of an ATM business, you are buying ATM machines, finding locations and installing them in locations, filling them with cash and making money every time a customer withdrawals money from the machine. Once the money is taken out of your ATM it is re-deposited into a bank account of your choice on a daily basis along with the surcharge fees. A portion of the surcharge fee is typically paid to the merchant in the form of a commission or split. Additional revenue can be made on each ATM transaction in the form of interchange. All your machines can be monitored online through a portal where you can see real time information about how much cash is in each machine and how many transactions and fees have occurred.
Total number of ATMs in the US- 425,000 (source-National ATM Council)
Independently owned ATMs deployed- 222,000 (source-National ATM Council)
Average ATM fee/Convenience fee- $2.77 (source-National ATM Council)
Average commission payment-$.50-$1.00 (based on my analysis of 100+ portfolios and 10,000+ locations)
Average interchange net income-$.10-.20 (based on my analysis of 100+ portfolios and 10,000+ locations)
ATM Frequently asked questions.
For initial basic information, please see my FAQ page
2-ATM Sales and equipment
Costs for new machine:
Entry level $2000-$2500
Higher end machine with multiple cassettes and dispensers can run anywhere from $3000-$6000+
There are 4 main manufacturers of independently deployed ATMs in the US
We can offer and sell all of these manufacturers and sell you machines at cost
Please see the spec sheets below for examples of current machines being deployed for right around $2000- $2500
Links to commonly deployed ATM spec sheets:
Here are some basic things you will want when purchasing new machines:
1k Removable cassette-This is a 1000 note removable cassette which allows you to either buy an extra cassette and swap cassettes when vaulting machines or remove cassette and add cash in a private or more secure location.
Electronic Lock- the locks for the safe come standard with a dial lock and most operators upgrade to the e-lock for an additional $50. Audit Lock (single use Armor truck requirement) can add $300-$400 to the lock cost
EMV (Europay, master card, Visa- see glossary for more) ready– Please ensure your machine is EMV ready, this standard will start rolling out October of 2016
You should attempt to select a manufacturer and stick with it if building portfolio. This will enable you to streamline your knowledge and order parts more easily and eventually have spare parts on hand.
Resources for purchasing machines
We are able to provide machines at cost and usually meet or beat any of the competitors out there, please call us for pricing and machine recommendations.
Signage, receipt paper and parts and repair can all be ordered through ATM Brokerage.com
ATM processing is the function the processor handles for your ATMs. These are the companies that handle the transactions, movement of funds and electronic transactions as well as give you access to your terminals online and handle the network and banking transactions.
The processor will give you real time information and access to reporting of all of your terminals from your PC, tablet or mobile device
At ATM Brokerage we can offer you processing and help you set up installation of your first unit depending on your area of the country and service coverage through ATM Brokerage.
Installations costs vary between $200-$500 depending on the location and the complexity of the installation, running wiring for internet/phone or electrical will typically run you more.
Interchange net income should be anywhere from $.10-.20 per withdrawal transaction depending on the total number of transactions.
Phone– ATMs can be connected to regular dial up phone connections although digital phone signals can be tricky so I would avoid them.
Internet– ATMs can be hardwired via ethernet/CAT5 cable straight to the machine, this is the most effective and least expensive option.
Wireless– Many operators use a wireless option where a phone line or internet hardwire is not an option to connect ATM machine. ATM Brokerage offers wireless service through our preferred network, call or email for costs. Wireless ATM link up are enabling some features via the ATM link that were previously not capable and I expect this innovation to continue.
5-Service and installation
I believe its best to learn how to repair and maintain your own machines for lowest cost solution. Later in this guide we provide you with all the information you would need for installation and tools required and a basic knowledge of the setup requirements.
Vault Cash providers
Self Vaulted- This is where you load your own cash or borrowed cash into your own ATMs. See ’13-Banking and Capital requirements’ for more information. Please contact me for local references in your area for repair, parts, vault cash or maintenance
Outsource to 3rd party-These are 3rd party companies who will deliver cash to your machines for a cost, typically billed out on a ‘per drop/delivery’ basis or per transaction basis.
Insurance is available for ATMs and the cash inside the ATMs, please consult with AS Risk
Please contact me for local references in your area for repair, parts, vault cash or maintenance
I prefer to group ATM locations into 2 basic tiers.
Tier 1-These can be described most simply as locations any independent ATM deployer would target. Most of these locations will already have an ATM, the merchant will know about the ATM business and expect income and split from the ATM surcharge. These will be tough locations to find and secure but with a good effort and a bit of luck they can be found.
The idea here is to look for foot traffic and a captive audience that would use an ATM. The traffic and the audience and location do matter. For example, some very large ‘sit down’ restaurants have a ton of foot traffic although payment is made from the table and these places usually don’t need ATMs. On the other hand high foot traffic tourist area or very busy take away restaurants can make very good ATM locations.
These are obvious and most every one has an ATM. Look for independently owned. Forget about large chains; try to eliminate them during cold calling as not to waste time
Concert halls/music venues/Entertainment complexes- Depending on the foot traffic, these can be very good locations.
Strip Clubs- Fairly obvious captive audience and if foot traffic is there, these are very good locations.
Hotels– Large hotels with more 250+ rooms are great targets. Independently owned/non corporate hotels are ideal targets
Bars/nightclubs– These are good targets in the current ATM marketplace. Owners of these establishments are looking to lower their credit card costs. The easy pitch here to a bar owner is to give them an example of card use. A customer walks in, orders a single drink and wants to pay for it with a Credit card. The bar owner makes little money on this transaction and he or she knows this. The ATM in this establishment can help set minimums and force customers to pay cash for single drink orders. Cash payments lower credit card costs and potentially the owners tax burden.
Cash only- Any cash only restaurant, bar, convenience store or otherwise is an ideal ATM location.
Tier 2 – These are as lessor known locations which are typically non-corporate and tend to be locally owned. Some of these locations are not obvious targets for national deployers of ATMs. Larger ATM operators see them as lower volume and not locations worth their time but for the smaller owner/operator these can be great locations.
Other good locations:
Hotel/Motel- Smaller than 200 rooms
Smaller Amusement Parks/fairs
Office complexes, 500+ people
Hair Salon/Barber- cash only or very busy locations
Liquor Stores, especially if they have convenience items, alcohol, lottery, cigarettes etc.
VFW, American Legion, Elks Lodge etc., often are cash only
DMV- These can be cash only although difficult to negotiate state/government contract and slowly migrating in credit card acceptance
Fast Food/pizza and or mom and pop independently owned restaurants
Outdoor installation near high traffic areas
Basic Lead generation Strategies
During my years of successful locating I used multiple sources to start locating and eventually with a 10-20 location route, referrals would come in from existing customers. Getting started from scratch requires more creative thinking and I can walk you through the way I found 300+ highly profitable locations.
The first thing you are going to want to figure out is a good call list from where to target your locations.
Here are a few options of list finding:
You can create a list from something simple as google search or the ‘search nearby’ function in google maps
Yellow pages or other business directory
Where else to look for leads
Liquor License Listings/applications
Take a look under your local liquor board hearing archive. This typically lists all the places applying for liquor license and often has the name, address and a contact name. This was one of my best resources as any new place serving or selling alcohol needs an ATM and they prefer to get one in advance of opening.
By looking through these lists you can also stay in the loop for businesses, which are selling, and this is an ideal time to see about ATM placement as the former owner could own the machine or be servicing and new owner could want something different. Either way it’s a good place to be on top of ownership changes.
Try to connect with Beer reps, liquor reps, red bull reps or anyone other reps who are in your target location selling and servicing as they always have first notice of new ownership, new places opening etc. as the owners of these places call them. If you offer referrals they can be good resources if you find the new locations for ATMs. If you are targeting hotels, attempt to connect with the sales reps that are servicing these locations.
Credit Card or Merchant Service reps
Just make sure they are NOT in the ATM business. If they are selling credit card processing you can trade leads etc.
Cash only places
Target these, as they are great locations if you can get them. Most likely will have ATM. Some Chinese buffet and Diners are surprisingly good ATM locations when they are cash only
YELP, www.yelp.com is a great resource to find cash only places. All you have to is go to yelp and type in your city and state you are targeting and in the ‘find’ box type ‘cash only’…restaurant, bar, or just type in cash only and look through the results. These should be locations you call and see whether there is an ATM in the location and whether or not its in service.
Bingo Halls/Elks/VFW/American Legion
I placed several of these over the years and they were all 100+ monthly transaction and I have seen many other deployers with good locations in this area.
These are good for new bar openings and listings of popular bars you may not know of. Concert halls, music venues, bars, nightclubs with cover charges are usually good places for ATMs. Check and see if there is one in your area and follow on a weekly/monthly basis.
New Business listings
Search out your local city, county or area for a list of new business listings. These can be great lead generators.
Cold calling for ATM leads
Cold calling is very effective and simple way to generate leads for locations. It’s a volume game so don’t be afraid to pick up the phone and start dialing.
Cold calling does work for ATM lead generation and is a proven strategy to find and location places where ATMs are needed
Try to make as many calls as you can per day, week or month. Set a goal and try to stick to it. Even if you can make 30 minutes of calls per day, you will find locations.
Set appointments with cold calls and target locations to drop off business cards and marketing materials.
Search for any of the locations in the location types I have previously described. I have found it best to target just a couple of location types at a time. Take C-stores and Bars for example and then move onto Hotels and Liquor stores.
Working with a mix of location types where the owners are different will help you deal with different types of people. Liquor store and c-store owners are sometimes similar owners. Bars and Hotels are different and some are corporate with managers in place. All have good and bad qualities or issues to address.
Use a spreadsheet or something where you can keep track of the calls and call back the no answers etc.
8-Basic Script for cold calls
I keep my scripts very simple with the goal of these calls to identify places where there is:
1-No ATM onsite
2-A broken or out of service ATM
3-A merchant who is unhappy with his current service provider
4- A merchant who owns his own machine but does not want to or cannot keep up with the maintenance.
5-Any machine which may require a costly EMV upgrade or complete ATM replacement due to EMV, Here is the EMV list of make/model and cost to upgrade and identification of replacement model.
Once you identify that there are any of these types of issues, I add this to my lead/visit list and prioritize from there. Ask as many questions to clerks or workers as you can. Don’t be afraid to ask where the nearest ATM is, about the ATM service or who owns the ATM etc. Some business owners will be willing to provide these details and some won’t. Just be persistent and make call volume a priority and you will have success finding locations for your ATMs.
‘Do you have an ATM there?’
answer=no, move to Scrip 2
answer =yes ‘Is it always in service, always working?’
answer =yes, next call
answer =no its not always in service, see Scrip 3
No, sorry no ATM. Find a conversation starter; figure out to whom you are speaking with.
Do you customers ask for ATM on site? This will gauge for reference that customers are looking for ATMs. Do you know where the nearest ATM is? If a clerk or business owner can tell you quickly where the nearest ATM is, that tells you they are answering that question on a regular basis.
Have you considered an ATM or do you have needs for an ATM? If not speaking with the owner then ask to speak with the owner or the decision maker of the location there so I can speak to him about an ATM.
What are his/her hours where I can stop by and introduce myself? Ask as many relevant questions about the business and its operation as the person on the phone is willing to give you. How long have they been in business, cash vs. credit card? Walk in vs. sit down traffic at a restaurant. Keep asking questions as long as the person on the phone is willing to talk so that you have information to target on your sales visit.
Response to owner/decision maker with no ATM on site
‘This is ___________and I am with _______________ and we are a local ATM and service provider and we can provide you an ATM for no cost where we handle all of the service and maintenance, including vault cash and we even split a portion of the proceeds with you. Once the ATM is placed you will receive a check monthly based on the number of transactions per month. Be sure to get to NO COST quickly to make sure the person on the phone understands you are not trying to sell them anything.
Reasons why to have an ATM at your location:
This gives your customers access to cash as a convenience
Gives customers another reason to come into your location
An ATM onsite will reduce the client’s credit card costs, most all merchants do not like the Credit card costs and anything which can be done to reduce makes them happy.
ATM on site increases purchases from customers and customers who take cash out of the machine tend to spend that money in the store.
Extra income from surcharges, merchant can make some additional income by having the machine there at the store.
If the response to in service ATM is ‘yes there is ATM although its out of service.’ Ask specific questions about the ATM. How often is it broken? Is it always out of cash? Who owns the machine, the location or a 3rd party?
If person says its not working or never works etc. or the owner of the location cannot fix, then its time to show up and let them know you can replace or fix machine at no cost.
9-Setting appointments and getting the location
Once you find locations with no ATM or a broken or out of service ATM or a location where the customer is receiving little or no split on a full service placement, try your best to set an appointment with the owner or manager, person who is making decisions. Find out the owners hours and when is a good time to show up. For example, don’t show up at a busy restaurant during lunch hours or a busy bar at happy hour.
If you get an appointment, have your 1 pager marketing materials along with the specs of the machines you are installing and a business card. Pay attention to all the usual appearance and presentation basics. Know the key reasons to add an ATM and benefits above of having an ATM on site.
With any broken machine you could take a quick look and see if it’s a really old machine in need of replacement or something fixable, see EMV upgrade list.
If replacement machine is needed or no machine on location, go to pitch based on your marketing materials:
We are local company
We provide a new ATM at no cost to you (get to this and reinforce the fact that there is absolutely no cost to the merchant to have the ATM there)
We sell, service and install and maintain ATMs
We provide 24/7 service
A portion of the surcharge on every transaction is paid to you on a monthly
We send a transcript of the transactions generated from a 3rd party so you know exactly how many transactions, how much surcharge revenue was generated and how much cash was dispensed.
Vault cash provided at no cost to you
Owner will ask questions so be prepared. How much will I make per month?
It depends on the surcharge fee and the number of transactions
Determine local fees in or nearby the locations by calling or visiting nearby locations and asking or doing a test on the ATM. You can run your card and find out the fee and cancel before paying for the fee.
You can do work in advance to determine and understand foot traffic per day. Some studies exist which show percent of customers who will use ATM although they are highly depend on location type and I would not trust general foot traffic conversion rates as Convenience Store conversion rates on foot traffic are much different than sit down restaurant foot traffic even though the traffic may be equal.
Fees are likely anywhere from $2-00 to $3.50. National averages of ATM fees are varying around $2.00-$3.00 with some significant regional differences.
The owner of the location will be paid roughly 30% of the fee, if there is already an ATM on location, can base it on the number of transactions its doing historically and provide them with real figure.
Here are some estimates to provide the business owner with given 30% split.
The split to the merchant also depends on the number of transactions on a new locations without ATM some general estimates can be made. Be careful not to over-promise on the income.
Average bar= 100-175
Non-traditional placement you can always be safe saying 75-150 per month
Busier, top tier locations, cash only places etc. could do 200-300+. Finding locations, which do in excess of 300 transactions with no history already are very difficult to find but still do happen.
Do your best to negotiate as best as possible and keep your net at $2.00 per transaction.
Once an owner says yes, you are down to logistics of where to place it and how to get started.
10-What is needed for an installation?
1-Power-Somewhere to plug in the machine- ATMs are energy efficient in case someone asks.
2-Communication-The ATM requires a phone line, Internet line or wireless device to connect and handle transactions.
a-Phone line-You can utilize a dedicated or spare phone line, fax line etc. Even the busiest location will only use the line 10-12 times per day for 30-60 seconds per transaction. If the client can install a dedicated phone line and pay for the cost, the machine will function well with this set up.
b-Internet– If the merchant has internet and a router, you can run a internet line from the router directly to the ATM using ethernet cabling.
c-Wireless– The 3rd option is wireless, this is typically the worst-case situation as there are additional costs of $15-$20 per month. If you can, attempt to pass this cost or a portion of this cost through to the merchant.
3-Space How big is the ATM? Check your pamphlet for specs most are 50-56 inches high, by 15-18 inches wide by 22-25 inches deep.
4-Security concerns What if someone tries to steal the ATM? Ask them if they have a security system. Let them know the machine will be bolted to the floor, into the cement if possible. Theft is rare although it can happen.
5-Contract- here is a Sample Contract. The main focus in your ATM placements should be getting into the location and to try to attempt to get the installed and ATM on location. You can approach the contract whenever you have a comfort level. If I felt pushback against signing a contract I would wait and just get the machine installed and get the client their first check before even approaching. The easy way to phrase the contract is to say ‘lets have some type of agreement in writing that we are the ATM owner and we are paying you/ the merchant a split of the fee’. Preferably get a 3+ year with auto –renew contract in place. Again if the merchant will not sign a long-term contract, just get a 1 year agreement or any type of agreement in writing that you are the ATM provider.
See the Startup Checklist for a complete listing of tools required to install an ATM
11-Marketing and Advertising
The best and cheapest way to find locations for a start up ATM business owner is through cold calling. Here is a link to a one page sample marketing/ad which you can drop off at potential locations. My typical procedure was to print this out along with the spec sheet of the machine I was installing at the time along with a business card.
Sample one pager, please feel free to use this sample to create your own basic one page marketing materials to drop off to potential locations. I used this same sheet to find 300+ locations. Along with the one-page marketing and the spec sheets you should also be sure to have a business card with your name, email, phone number and business name.
If you are considering more enhanced advertising such as a website or social presence, just be sure to get the basics out there. Online competition for ATMs is very strong and it will be difficult to have your website stand out against all of these national and regional competitors although it can be done. If you are looking for these types of services, check with me for additional help.
A contract is typically signed between the merchant the owner of the ATM. The key items which you should make sure to include are a term or length of the contract, statement of ownership of the ATM and payout schedule whether a percentage, flat rate etc. of the surcharge.
Sample Contract please feel free to utilize this sample contract and consult an attorney with any detailed questions.
Contracts are very important when you decide to sell a portfolio. Upon starting and building your ATM business contracts may not seem important although as you grow you will want to ensure that you have contracts in place.
Term– I prefer to write contracts for 3 years with some type of auto renew clause as long as that is legal in your state, please consult with local attorney before proceeding with auto-renew contracts as they may not be enforceable or legal in the state you reside.
Statement of ownership– Be sure your contract states that you are the owner of the ATM if you indeed are the owner. This will protect you in cases where a merchant sells a location to a new owner and an attempt to claim ownership could be made. This will also protect you in cases where a merchant either goes out of business or the business is shuttered for some reason. You will want to make sure you can prove ownership of the machine in these cases. This is also an easy way to tell the merchant that you need something on paper.
13- Banking and capital requirements
Banking in the ATM business has become a larger concern with some governmental regulations which did not necessarily target the ATM business although have had some effect. I would advise you to engage with your local bank and ask them about supporting an ATM business. They will likely have several questions for you around your cash needs. This can be calculated based on your projections. Please contact me for local references in your area for banking and or vault cash.
Capital requirements- Based on my experience I would calculate your cash requirements in this manner.
Take the number of projected transactions. After analyzing data on thousands and thousands of ATM locations, I will tell you the average number of surcharge withdrawal transactions across the board is anywhere from 100-150 transactions per month. Of course, some locations are much higher with 300+ transactions and some can be lower with fewer than 100. Unless you are receiving 100% of the surcharge and your fee is set high, a location with less than 50 transactions can be tough to make a good income on.
Given the 100-150 total monthly withdrawals, I have also seen a national average of around $70 per withdrawal.
Given these 2 averages, your capital requirements are going to average $7,000-$10,000 per month. Projecting a weekly cash load this type of machine will require around $2000-$3000. I think planning on $2000-$3000 per location, per week for vault cash is a safe bet. If you run into a unique location or a very high volume location, you will need to up the number although the $70 per withdrawal is a good number to use.
3rd Party/Armor Truck costs
Here are several costs to continue when considering the outsourcing of the cash vault services
Cost of cash– cash loans are available for 3-4 points over Prime Rate depending on the volume of the portfolio and the provider along with a several other factors
Insurance– $25 insurance on vault cash per location
Additional fees– .03-.05 cents per transaction for cash management
Cost of armored courier– approximately $65-$85 per trip
# of ATM Machines: 1
# of Transactions per ATM per Month: 300
Interest Rate on Cash Float Prime+4 @ 8.5%
Amount of Cash Withdrawal per Trans: $60.00
Transactions Surcharge Per Transaction: $3.00
(300 transactions x $3.00)
Total Income: $900.00
Cash Interest on loan: $127.50
Armored Courier $80.00
Cash Management Fee (0.03) $15.00
Total Expenses $252.50
Estimated Profit before merchant commission
Net monthly profit: $647.50
Again, contact me for local references for vault cash and or maintenance and specific questions around 3rd party vault costs
A full service ATM is where you purchase the ATM, install the ATM and vault the cash with your own capital. You could also outsource the service and vault cash to a 3rd party. Please contact me for local references in your area for vault cash or maintenance As the owner of the ATM, you are also responsible for maintenance and all service on the machine. With full service accounts, you determine the amount of the surcharge fee with the merchants approval and pay the merchant a split of the commission. This can be a fixed amount, such as $100 per month, a flat portion of the surcharge such as .50-$1.00 or a percent of the surcharge fee based on the number of transactions.
Processing only accounts are where you pass the initial costs of the ATM along to the merchant and you set up the machine for them. This could include the initial installment, processing and arranging the merchants banking information to your processor. In this scenario you would be making the interchange income only. Depending on who your processor is and how much volume you have throughout your portfolio this amount can be variable. The number can vary from zero up to .25 cents per transaction. If you buy or develop a route with a good volume or you can arrange a good processing relationship with an ISO (Independent Sales Organization), see glossary. The difficulty in arranging processing locations is finding merchants looking for and willing to pay for the cost of the ATM as well as maintain the ATM. Lease options are available although they are not great investments for anyone as they often end up costing 3x the cost of a machine over a 5 year period.
Service + Processing
This is a mixed strategy where you would sell the ATM to the merchant but offer some type of service agreement to maintain the machine, not to include vault cash. Essentially the merchant would load the machine with cash you and would be responsible for maintenance when the machine needs service or repair. For a small transitional fee or a fixed monthly fee, some ATM operators find this to be a compelling case. The fee for maintenance is purely up for negotiation between the ATM business owner and the merchant. I have seen successful ATM operators charge .05 cents per transaction up to .25 or 30 cents per transaction. The ATM business owner is also making interchange income so with a strong volume location a service + processing deployer could make a good income. The expenses and overhead in this scenario would need to be considered. I have seen service plans set up as a multi-year warranty, with some deployers guaranteeing service and parts anywhere from 3-5 years. Keep in mind most new ATMs come with an initial 1 year warranty on parts.
15-Growth Strategies and Current Opportunities
Organic growth at this time varies by region. If you are interested in specifics, please check with me about overview of certain areas of the country. In general the largest metro areas have a number of ATM companies both large and small operating and these areas are going to be tougher to penetrate. Currently, the Northeast of the US, along with South Florida, Southern California and the top 20 metro areas are highly competitive for ATM locations.
High Margin/lower volume accounts. I have suggested to many providers to look for locations where you can set your fee fairly high and pay out little to no merchant commission. Independently owned and smaller hotels like Comfort Inn, Best Western, Super 8 etc., can be good targets as long as you don’t have to split the fee with there hotel owner. We have seen some level of success with $3-$4 fees x 50-60 transactions and low vault cash requirements. If you can find hotels where the ATM does 50 transactions and you are making $4 per and paying no commission, this is a decent location, with net income of $200 per month. You have the added benefit of 50 transactions at $60-$80 per withdrawal requiring only $3000-$4000 of vault cash per month. The average location you are likely to find will be anywhere from 75-200 monthly transactions. The ability to find locations above 200 transactions is possible although this is not something I would count on finding on a regular basis.
You can apply this same model above to any location such as lower traffic bars, which are ideal for this type of set up. Essentially you deploy the ATM to the location, set a $3.00 fee and inform the merchant that you can keep the ATM there as a convenience for the customers and to help them lower their Credit Card fees.
With this strategy you can net 150-200 and deploy less cash as well as less wear and tear and fewer service costs. This is a good strategy for a new entrant to the business.
EMV– See below for a detailed description of EMV as well as make and model upgrade costs or replacement. Machines and locations where a complete replacement is a requirement may make good targets for marketing. As 2016 approaches the deadline becomes closer, October of 2016 and October of 2017 are the 2 deadlines for acceptance of the EMV standard and fraud liability shift..
Here is a guide with make/model upgrade or replacement costs for EMV. If you are able to target locations where non EMV upgradeable machines are located, you may have some luck replacing those machines if merchant owned or out of service and potentially abandoned by another provider.
Mobile Locations– Mobile locations or events are good ways to make additional income if you are up for the extra work involved in these events. Many ATM operators are not interested in the mobile events and therefore many of these smaller events can be open. Look for larger events in your area such as farmers markets, fairs, sporting events, music events etc. You can also typically charge a higher fee on these transactions of $3.00-$4.00 or more depending on the event and the value of the cash on site. If you can find one, two or tree day events where you are seeing 100+ transactions per day, this can be a compelling strategy.
Here is a sample of the simple basic one page marketing flyer I use. You can also add EMV compliancy verbiage or documents to the marketing materials if you prefer. Along with a business card and the spec sheet of the machine you are deploying, this is all you need to bring with you on sales calls. Leave these items behind and handle follow up calls appropriately.
16-Potential Income and Expenses
Please use this information as a guide based on my experience of operating 300+ locations, selling 100+ portfolios and analyzing thousands of locations and terminal reports, surcharge revenue, interchange income, merchant commission and variable expenses.
Here is a layout of per terminal income and expenses you can expect to see on average. Income and expenses are highly variable depending on location type, volume, regional area of deployment and other overhead. Please keep in mind these are averages only.
Surcharge revenue– with average surcharge fees running anywhere from $2.50-$3.00, this is the amount you should expect to be able to charge on a per transaction basis.
Interchange income- You should expect to make anywhere from .05 -.20 cents depending on volume and ISO/processor arrangement
Merchant commission– You should expect to pay anywhere from .50-$1.00 per transaction depending on location, volume, region and negotiating skills.
Transactions– You should expect on average anywhere from 75-150 transactions on average for new deployments, depending on location, region and foot traffic. Of course there are outliers here and you could land an account which develops into a machine with 300-400 or even more monthly transactions, although I would not count on this number to factor potential income.
Given these averages here are some expectations utilizing an average surcharge fee of $2.75 and a merchant payment of .75 and interchange income of .15 cents. This would give you a ‘net’ after paying your merchants an average income of $2.15
75 transactions x $2.15=$161.25
150 transactions x $2.15=$322.50.
I normally tell new entrants to shoot for netting $200 per month per terminal as I have seen this on average for thousands of terminals, again with regional variances.
Outside of merchant commission, there are several variable expenses to consider and here are a few:
Initial equipment costs- See equipment section for more details
Receipt Paper, Parts, Repair- this is a highly variable cost depending on location, use, repair schedule, age of the machine, etc. A case of Receipt paper with 8 rolls cost approximately $50. A medium to high volume location is going through no more than one roll per month. Slower locations may go through one roll per quarter.
Fuel- this is a highly variable cost dependent on your vehicle type, frequency of cash loads/service and geography of route
Cost of Capital-Another variable cost dependent on the structure of a loan or access to the capital, please see 13- banking and capital section for more information regarding this.
Communication costs- This cost is not always a concern as discussed in the communication section, if you take advantage of the merchants internet or phone line there is no additional cost. If you have a wireless router in place, expect to pay between $10-$20 per month.
Self vaulted, owner vaulted
3rd party vaulted
Vehicle maintenance- highly variable
Basic business expenses– cell phone, postage, checks, website maintenance etc.
- Create an LLC, S or C Corp. (consult an attorney as laws vary by state)
- Set up POB for business
- Create Business Cards
- Build a Website (optional)
- Select processor
- Fill out application
- Confirm buy rate
- Obtain Processor back end training
- 2 bank accounts should be utilized
- 1 for vault cash
- 1 for surcharge and interchange
- Order business checks
- *Discuss with the bank manager money pick-up procedures
Quickbooks (if required)
- Computer set up
- Setup and training
- Monthly statements/checks
Vault cash provider/ 3rd Party
ATM machine set up
- New Terminal ID set up
- Master Keys/comvelopes
- Request sets from Processor
- Terminal ID and Key transfer
- Post Closing
- Convert Safe Combinations
- Get lock type
- Get instructions for elock and dial lock
Tools required for install
- Cat5 Cable
- Cat5 ends
- Cat 5 crimp tool
- Phone Cable
- Phone end crimp
- Angle grinder for bolt removal
- Phone handset to check for dial tones
- Laptop with ethernet plug for testing network connections
- Plug adapter
- Extension cords
- Surge protector, multi adapter
- Digital camera/phone
- SUV or Pickup for transporting ATMs. ATMs can fit in smaller wagon/hatchback vehicles as well
18-Glossary and Resources
Advertising & Marketing– Click here to download a sample marketing flyer which is a basic one-page marketing materials I used to place in excess of 300 locations.
Armor Truck ready– This means the ATM can be vaulted by an armor truck, which normally requires audit-locks and a higher cassette capacity
Audit Lock– This is a single use lock which is a basic requirement from he Armor truck companies. This lock allows you to program the lock so that it gives out a new code every time the lock is used
Commission- Merchant split, commission, lease payment, cut to the merchant etc are all terms for the amount typically paid to the merchant in an AMT placement
Contract- The contract is the agreement that is typically signed between the merchant and the owner of the ATM. See here for a sample which I have utilized; Sample Contract
EMV– Stands for Europay, Mastercard, Visa; this a new chip enabled card which the card issuers are deploying now . Between 2016-2017 ATMs will need to be ATM compliant. Click here for a list of make and model costs by machine.
Interchange- Interchange for the purposes of the independent operator is normally an additional amount of revenue or income which is derived from the additional foreign bank fee which accompany all ATM transactions
ISO- Independent Sales Organization- These are the companies who can handle your transactions and link you up to a processor. There are over 200 ISOs in the ATM industry today
Master Keys– Master Keys, Comvelopes or Encryption keys are an extra layer of security on each terminal and unique are to that terminal
Monthly Net- For independent operators their ‘net’ is normally their surcharge revenue plus interchange income, less merchant commissions.
Processor- The Processor is the ATM organization linking the bank account of the customer through the ATM to your bank account. There are several ATM processors in the US including Columbus Data, RBS Worldpay, Switch Commerce, FIS
Spec Sheets– Here are spec sheets with dimensions and specs on the Genmega 2500; Hantle 1700 and Hyosung Halo. Spec sheets on any other make/model you would be installing can be easily found online or I can provide for you if needed.
Surcharge– This is the fee you set as the owner of the ATM Machine, typically also called the Convenience fee
Terminal ID– This is the unique code the Processor and or ISO assigns to your terminals
Turnkey ATM– This is an ATM where the vault cash and service is provided already and there are no service requirements necessary
Vault Cash– This is the cash or capital in the ATM itself. There are 3rd part vault cash companies which can service ATMs.
Most new ATMs come with a 1 year warranty on parts and most repairs on ATMs can be handled easily with minimal knowledge of ATM repair and technology skills. Data on related repair breakdowns are not readily accessible as far as I am aware although I am working on gaining more knowledge in this area.
Here is a general layout of the parts on an ATM
Shell- The exterior of the ATM, can be purchased without the dispenser.
Topper- Adds potential advertising space for the ATM, a topper upgrade is around $50-$100 on a new machine
Safe- Safe and safe door where vault cash is contained
Lock- There are 3 main lock types, Dial Lock (standard) Electronic Lock ($50 upgrade), Audit Lock- one time use Armor truck ready ($300-$400 upgrade)
Dispenser- This is the area where cash is stored and dispensed. The most expensive part to replace and is typically repaired rather than replaced. Standard issue is fixed cassette. A 1000 note removable cassette normally adds $50-$100 depending on the retailer. New single cassette dispensers run around $800-$1000
Cassette- 1000 note removable is typical issue although 1700 not cassettes, dual cassettes and more are available. A removable cassette is normally a $50 upgrade on a new machine. Spare 1000 note cassettes run around $400
Screen- The exterior screen for customer use, can be touch or just visual screen, most screen replacements run $200-$300.
Main-board- Most main board with modem are $650-$700 replacement
Card Reader- EMV is new and latest standard. Most ATMs built in the last 5 years can be upgraded to EMV fairly easily and with relatively low expense ($275-$400)
Modem board- Usually located on main board although can be separate, run around $125
Printer- A printer assembly runs around $600-$700
Keypad- typically a $400-$500 part for newer ATMs
Wireless- Many options exist for wireless devices and these typically run around $15-$20 per month for a lease or $275 to purchase the box and $5 per month for the connection to the wireless provider.
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