The number of ATMs is rapidly increasing. In 2017, there were over 3,000 million units worldwide and 425,000 in the U.S. Nowadays, nearly every restaurant, gas station and grocery store has its own ATM. If you own a brick-and-mortar business, you can increase your revenue by providing your customers with this device. It's quite a small investment considering the potential financial gain. But how profitable is an ATM machine?
The Profitability of ATM Machines
An ATM business allows you to supplement your income and increase foot traffic to your shop. Statistics indicate that customers spend 20 to 25 percent more money in convenience stores that provide ATM machines. This means you'll earn from service fees and experience an increase in sales.
ATM machine transaction processing fees range between $1 and $8. How much you'll earn depends on the ATM processor, its owner and the venue owner. The earnings are split between these parties. If you own both the venue and the machine, you'll make $0.50 or more per transaction. Since the average ATM processes around 300 transactions monthly, that's an extra $150 per month or $1,800 per year in your pocket.
The more popular your business is, the more customers will use the ATM and the more you'll earn. The best performing 7-Elevens, for instance, process about 6,400 ATM transactions every month. Even those with fewer customers handle at last 1,100 transactions monthly. If you have a steady flow of clients, you could earn thousands of dollars a year in service fees alone.
In 2017, the average surcharge fee was $2.97 and up to $5.19 in some states, such as Pittsburgh and New York. Most ATM processors allow you to set your own surcharge, so you can earn more per transaction. However, if your fees are too high, you'll drive customers away. Estimate your expenses and potential revenue before setting your rates. Consider purchasing multiple ATMs to increase your return on investment.
Costs of an ATM Business
Before starting an ATM business, try to assess the costs involved. These depend largely on the type of machine. If you purchase a new unit, you can expect to pay $1,000 to $25,000 and up. The price of a used ATM is around $500 to $1,000. In this case, your ATM investment will pay off in no time. Leasing an ATM machine, on the other hand, costs only $40 to $100 per month plus an installation fee of up to $200.
Factor in the costs of maintenance and repairs, receipt paper, cash loading services and telephony services. Given the large number of ATM attacks, you may need to purchase a surveillance camera and invest in security software. Every year, millions of customers become victims of card skimming, card and cash trapping, transaction reversal fraud and ATM cybercrime.
Experts recommend banks and ATM operators perform regular software updates and upgrades, apply whitelisting to block malware and implement the latest security practices. Also, beware that old ATMs are more vulnerable to attacks. Even if you pay more, you'll have peace of mind knowing that your customers are safe. Plus, a secure ATM can help you avoid costly lawsuits down the line.
Choose the Right Location
When it comes to running an ATM business, location is everything. Consider installing the unit in a high-trafficked area, such as next to a hotel, restaurant, nightclub or retail store. Make sure there are no problems with the electrical system, phone lines or internet connectivity in that area. Also, check how many other ATMs are nearby.
Choose a secure location with low crime rates. Assess its marketing potential based on the estimated daily traffic and popularity. An ATM located next to the mall, for example, will be less prone to theft and attract more customers than one located on a side street with little traffic.