Should I own an ATM or Take Advantage of a Free Placement?
One of the most frequent questions we get from locations is regarding ATM ownership. The purpose of the article is to help you make the best choice for your site.
Why have an ATM in my location?
An ATM is a convenient way to get cash. 80% of withdrawals are spent in your location, which increases sales. When customers that use cash instead of credit or debit cards, you don’t incur credit card fees.
What are the key issues to decide between ownership and free placement?
- Do you have the funds to purchase an ATM?
- Do you have the funds to keep the ATM filled with cash?
- Do you want the responsibility of repairing and maintaining an ATM?
- How much will you realize in fees for your efforts?
Purchasing an ATM
An ATM will cost between $2,700 and $3,000 delivered to your door (cost of machine plus shipping and tax). In addition, there is a charge for installation of between $200-$300. Installation is not complicated and many customers choose to install themselves.
ATM’s maintain a relatively high resale value. If you decide ownership is not for you we can help you sell your ATM to another location or ATM operator.
Keeping an ATM filled with cash
The average ATM goes through between $6,000- $8,000 in cash per month. You will need to have between $2,500 and $3,000 in cash available per week to fill your ATM. You can recycle $20 bills from your business or get them from your bank.
The biggest mistake we see is a location buying an ATM and then not keeping it full. If your business has tight cash flow, don’t fool yourself- take advantage of a free placement. An empty ATM is a useless piece of equipment and only irritates customers.
Repairing and maintaining an ATM
If you own the ATM, repairs are on you. ATM’s are remarkably reliable and come with a 12-24 month warranty on parts. Our service team can talk you through most repairs on the phone. If things are more complicated, then we can find qualified local service company to help. None the less, budget $200-$300 per year towards repairs.
Like anything in life, with the higher potential financial risk of ATM ownership comes higher reward. ATM owners keep a majority of their surcharge. Typical surcharge fees are between $2.50 and $3.00. At festivals, events and gentlemen’s clubs, surcharges can go as high as $7.00 Take a look at nearby ATM’s to get a feel for your neighborhood surcharges.
To get your monthly gross income, multiple an estimated number of transactions by the surcharges amount and then deduct any service and support fees . If you don’t know the number of transactions from past history, our team can give you a range. Then determine if the possible gross income gives you enough of a return on your investment.
For example, let’s say you net $2.50/txn after fees to your ISO. Your machine does 100 transactions per month. Your gross revenue is $250 ($2.50 x 100) If your machine costs $3,000 and you have $2,000 in cash invested to fill your machines , your total investment is $5,000. Thus ROI would be 20 months ($5,000/$250)
With a Free Placement, there is little guaranteed income. However, you have zero cost (besides power) and no responsibility.
Either way, having an ATM will benefit your business so there is no right or wrong decision.