Business owners should always be on the lookout for ways to make more money, and some business owners look to ATMs (automated teller machines) to increase their passive income.
Brick-and-mortar businesses — such as restaurants, gas stations and nail salons — may benefit from having an ATM. It can attract more customers and make money for your business. But how profitable is an ATM?
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When people use an ATM, they typically pay a fee between $2 and $3, which is how businesses make most of their money through these machines.
“When a business allows an ATM to be placed at their location, they have the opportunity to earn a commission,” said Paul Carriere, an attorney at Favret Carriere Cronvich. “The simplest way to conceptualize earning a commission is when a person uses an ATM, there is a ‘surcharge,’ a fee for using the ATM.”
However, business owners typically don’t receive the whole fee. If you rent the ATM, the business that maintains the machine (fills it with cash, repairs it, etc.) receives some of the money.
“There are a number of variations on the split, but the business earns money based on the surcharge transactions,” Carriere added.
While businesses can make money through the fees, some business owners look for other ways to use ATMs to make money. One of the most common methods is by placing advertisements on the ATM.
“Companies are placing screens on top of ATMs and selling ads to run on those machines,” Carriere said. “This can increase revenue for ATM operators and locations.”
The following types of businesses frequently keep ATMs on-site:
If you’re considering installing an ATM at your place of business, there are several benefits you can expect. Chiefly, if you are a cash-only business, having an ATM on-site allows your customers to withdraw cash so they can pay you for goods or services. Additionally, you reap the benefit of an extra commission.
Here are the main benefits:
If you’re considering adding an ATM to your business, it’s important to understand what types of machines are available and how each type can help your business. Here are three ATM models we found that make sense for small businesses:
You can rent or buy an ATM. Although it’s more expensive to buy one, you receive a higher commission per surcharge transaction.
ATMs cost anywhere from $1,000 to $10,000, depending on if you buy a used or new machine. Although it’s cheaper to buy a used machine, they’re usually slower and look older, so people may be less likely to use them.
There are different types of ATMs to consider, such as countertop or freestanding models. The type also affects the price.
Also keep in mind that if you buy an ATM, you’ll be responsible for maintaining the machine, including keeping it loaded with cash and making sure it’s working properly. “Someone can buy the ATM outright … and place [it] in a location they own,” said Brad Daniel, CEO of America’s Bitcoin. “They can load money from their business into the ATM, cutting out a third party, which reduces costs.”
Buying your own ATM is very profitable, Daniel said, and between 15 and 30 transactions a month can yield a high return. “[It’s] a great secondary source of income that could equal anywhere between $20,000 and $30,000 extra per year,” he said.
In some cases, your ATM can be profitable even if it results in only 15 customer transactions per month.
If you don’t want to buy an ATM or worry about maintaining it, you can pay to participate in a full-service program in which a retailer maintains it.
“The ATM is put in a retail location; then cash is loaded,” Daniel said. “The largest cost associated with this is rent to the retailer. The rent is usually a percentage of the service charge. That is the retailer’s ‘rate’ or ‘commission.'”
Many small business owners may want to add an ATM to one or all of their locations. If you’re looking to start a business that buys and sells ATMs to small businesses, there are some considerations you should be aware of.
First, just as you would before considering any business endeavor, do your research on the market, including how big the market is, who the major players are and how you would fund your business.
Here are some additional general steps to follow as you begin your ATM business journey:
An ATM can be helpful for your business if your customers might be more likely to pay with cash than a card on-site. That’s especially true if you expect enough cash withdrawals per month for you to profit from your ATM. Some careful math and deep thinking about how often customers will use your ATM can help you make the right call. And if you succeed, you can use the extra cash to fund all kinds of business ventures.
Saige Driver contributed to the reporting and writing in this article. Some source interviews were conducted for a previous version of this article.