Becoming an Independent ATM Deployer: FAQs

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Becoming an independent ATM deployer (IAD) is a great way to generate passive income. It can also become your main source of income depending on your individual goals. But while becoming an IAD is quite simple, it isn’t necessarily easy. 

There are some industry ins and outs you will need to become familiar with before you really get going. So you will have to put a little work into getting started. Fortunately, there are a ton of resources and experienced IADs available to help you every step of the way (and there really aren’t that many steps). 

To help get you past any pre-business jitters you might be experiencing or any other obstacles that might be standing in your way, we’ve compiled a list of the most frequently asked questions from new IADs. Our hope is to remove as many hurdles as possible so that you feel confident going into business for yourself as an IAD.  

What is an Independent ATM Deployer?

An IAD is an individual (or a company) who owns and operates ATMs without being affiliated with any specific financial institution. A common misconception is that all ATMs are owned by banks. But ATMs can be deployed in various locations such as retail stores, gas stations, salons, and other public places. Just like bank-owned ATMs, independent ATMs offer cash withdrawal and sometimes additional services like balance inquiries and transfers.

An IAD works with an independent sales organization (ISO) that provides processing. This is how an independent ATM machine is able to communicate with users’ financial institutions to provide account information and approve or deny withdrawal requests. It is an IAD’s job to purchase ATM equipment, place it in a location that provides customers with convenient access to their accounts, and maintain the machine to keep it functional. 

How Can I Become an Independent ATM Deployer?

You can become an IAD in just a few simple steps. First, there is some documentation you need to prepare. You will need to prove your identity, pass a background check, and complete any agreement forms required by your ATM processing company. This documentation might include your ATM business bank account information so that the processing company knows where to send your settlement funds and surcharge income (more on this later).

You also need to find a bank that will work with your ATM business. This can be tricky, so keep reading for more information on finding a bank to work with. Next, you want to purchase your ATM equipment. This can include the machine and any upgrades or ad-ons you’d like. At the very minimum, you will need a machine. The rest can come later depending on your budget (cost estimates coming up next!).

Once you have the ATM machine, you can begin to learn the functions (most new ATM machines come preprogrammed). Review the manual, test it out, and practice operating it. The only thing that’s left to do is to find a location to place it.

When you find a location that can benefit from having an ATM onsite, and the location owner agrees to work with you, you can plug the machine in, connect it to the internet, load it with cash, and start making money! And THAT is how you become an independent ATM deployer.

How Much Does It Cost to Start an ATM Business?

There are some startup costs associated with starting an ATM business, just like there are with any business. However, compared to most other businesses, ATM business startup costs are fairly low. The biggest expenses will be the purchase of the machine itself and the cash you use to vault the machine.

ATM Equipment

We recommend that new IADs start with a new ATM machine. They are user-friendly, compliant, programmed, and typically experience fewer technical problems. New machines run from around $2,000-$3,000 depending on the size and manufacturer. Of course, you can find used and refurbished machines for a little less, but they also come with a modicum of risk.

Once you feel a little more comfortable and confident with ATM equipment, you can look into used and refurbished machines for future placements. But you will want to make sure that all faulty parts have been replaced or repaired, software has been updated, and that it is compliant.

Vault Cash

The other major startup cost is the vault cash. This is the cash that you load into the machine to be dispensed to your ATM users. Plan to start with about $2,000. 

At the end of each business day, your ATM processing company will deposit the sum of all cash withdrawn from your machine back to your settlement account, or your ATM business bank account. Then, you can withdraw the funds back from this account when you are ready to restock the machine, so on and so forth. Vault cash is yours at the end of the day, but it is tied up in your machine, so try not to think of it as cash you are able to use.

Other Costs

Other costs associated with operating an ATM business include receipt paper, any cleaning supplies you need to maintain your machine, travel to and from the machine, insurance if you have the budget to purchase it right away, and a wireless device.

It’s a good idea to just invest in your own internet connection from the start. That way you don’t have to rely on the location’s internet service. If their internet goes down, you will be at their mercy and that of their service provider to get back up and running. And the time that your machine isn’t operational is time that you aren’t making money.

How Can I Make Money as an Independent ATM Deployer?

You make money as an IAD from the surcharge fee. This is the fee that you set for each transaction made on your machine. It’s the price your customers pay for convenient access to their accounts. A standard surcharge fee is about $3 but can be as high as $8 and even more in some locations. It depends on the type of location, average withdrawal amount, and convenience of the ATM.

Before you can start to make a profit, you need to make back as much as you put into the business. Your surcharge fee and revenue split with the location owner will determine how quickly you make your ROI and can begin to profit.

You can expect to make a few hundred dollars a month, a few thousand a year, with one machine. But remember that this is passive income. Your machine makes money while you work your day job, travel, sleep…. Once you get the hang of the business, you can start adding more machines to your portfolio. Soon, that few thousand a year can turn into tens of thousands a year so that you are making full-time income.

How Do I Get a Bank Account for an ATM Business?

It can be tricky to get a bank to work with your ATM business. Because of the cash-heavy nature of the business, banks can be held liable for your business practices. Therefore, banks that handle ATM business accounts are subject to costly audits to help monitor and prevent money laundering. 

Our number one tip when it comes to finding a bank is to start where you already have a good relationship. If you already know your bank manager or tellers well or have had accounts with them for years, make an appointment to speak with someone about opening an account for your ATM business.

Some banks will flat out say no; some banks don’t handle these types of accounts at all. Others might use their discretion on a case-by-case basis. So if you are turned down from one financial institution, be polite, patient, and understanding, and move on. 

To make yourself a more appealing customer, offer to open multiple accounts. The more products and services you purchase, the more lucrative you will be as a customer and the less likely the bank will be to close your ATM business account. Your settlement account will often have a low balance as you withdraw the funds to vault your machine, and it will take extra time and money for the bank employees to order and count enough cash for your business needs. So prove to them that you’re worth their time.

Some IADs have success at banks that others don’t and vice versa. Our list of ATM business-friendly banks is a good place to start, but don’t rule out local, regional, community banks. Sometimes, they are under less scrutiny than tier 1 financial institutions and might be more likely to take on your business.

How Do I Find a Location for an ATM Deployment?

There are a few tips to keep in mind when it comes to looking for a location to place your ATM machine.

The first, again, is to start where you have good relationships. What are some businesses that you frequent and even know some of the employees? This could be a good way to get your foot in the door or even get a referral.

Look for gaps in service. Where do you see a need for an ATM where there currently isn’t one? Find out who owns the location or property and see if they wouldn’t mind a free ATM placement.

And obviously, look for places that experience a lot of foot traffic like shopping centers, event areas, or other attractions.  Statistically, the more people who pass by your machine, the more transactions you are likely to see. Cash-only locations are great spots as well as new businesses that haven’t been approached yet for ATM service.

Even if a location already has a machine, find out if they are happy with it. It doesn’t hurt to ask, and you could end up replacing someone else’s machine that’s been neglected.

What Are the Advantages of Becoming an Independent ATM Deployer?

There are many advantages to becoming an independent ATM deployer. First and foremost is being your own boss. Each ATM business looks different. There are a lot of decisions you get to make based on your own specific situation, needs, and goals. Your ATM business is yours to curate.

That includes curated responsibilities. As an IAD, you can outsource any aspects of the business you can’t or don’t want to handle, whether it be vaulting or cleaning or maintenance.

Which brings us to the most appealing advantage of becoming an independent ATM deployer: generating passive income. Your ATM machine works with very little onsite effort from you. Aside from loading the machine and regular cleaning and maintenance (all of which you can hire out if you want), you can go about your regular life and watch those revenue deposits hit your account.

Finally, the ATM business is scalable. Want to make a little more passive income? Place a second machine. Want to replace your 9-5 income? Invest in 10 or more machines. You’re in control. And you don’t even need any official business or entrepreneur education, training, certification, or experience to get started.

What Are the Challenges and Risks Associated with Being an Independent ATM Deployer?

Like any other business venture, there are some challenges and risks associated with being an IAD. But there are also ways to mitigate and handle them.

Challenges

The first challenge might be the initial funding. However, since good ATM machines are about $2,000-$3,000, you can sometimes find credit companies that offer little to no interest for 12-18 months. That gives you time to get your business up and running so that you can start to pay off your machine as soon as you start to generate income rather than purchasing the machine outright.

Another big challenge for IADs is finding and negotiating locations. But there are a couple of things to remember here: 

First, you don’t have to limit your search to locations without an ATM machine. You could be looking for machines that are old, unkempt, or frequently out of order. This could be a great opportunity to approach a location that clearly wants ATM service but can’t keep up with it on their own or is dissatisfied with their current provider.

Second, it helps instill confidence in new IADs to remember that they aren’t selling anything. As an IAD, you are offering a service—for free—that benefits the location and its customers. 

There are a number of objections you might encounter when approaching location owners to negotiate a placement. But with preparation, practice, and active listening skills, you can become better at addressing these. 

An obstacle that isn’t unique to the ATM business is imposter syndrome. It can be particularly daunting to try to negotiate a deal when you don’t have any experience under your belt. But you can also spin this in your favor by emphasizing your dedication to just ONE machine and your motivation to provide service that’s good enough for a referral or recommendation in the future.

Risks

As with any business, again, you risk not making money. But unlike other businesses, your ATM investment probably won’t bankrupt you, and you can always move your machine to a better-performing location. 

Actually, let us take that back. It’s really hard to lose money with an ATM business. As long as it’s up and running, if someone uses it, it will make money. However, it might not bring in enough quickly enough, and that is a potential risk that can be solved by relocating the machine or adjusting your signage, advertising, surcharge rate, and/or incentives.

Safety and security can be a risk as well. When it comes to the safety of your business, just make sure you protect yourself with contracts. There are templates you can use and industry experts you can borrow from without having to get a lawyer involved. 

When it comes to the safety and security of your machine, there are lots of things you can do to protect your assets. You can also prevent potential risks and unnecessary challenges by avoiding some of the most common small business mistakes. 

How Can I Ensure the Safety and Security of My ATMs?

The first thing you can do is to purchase general liability insurance. There are other, more comprehensive policies you can invest in, too, but general liability is pretty standard. While insurance isn’t preventative, it can provide you with peace of mind and protect you in the long run. 

Second, use common knowledge. Make sure that the machine is within eyesight of employees and/or security cameras (some machines come with a camera which is a great way to deter crime). Don’t place the machine in an area that is easy to breach like near doors or windows. If you want to, you can invest in your own surveillance system (cheap cameras can be purchased on Amazon, for example) or GPS tracker for your cash. And bolt down the machine. Don’t let a location owner talk you out of it.

Most of the time, a simple sign that announces that the machine is under constant surveillance is enough to deter criminals. But try to predict weaknesses or potential points of ingress and reinforce them. Blocking the machine against a wall or other furniture can prevent both external attacks and internal attacks like software hacking. 

Maintaining current software updates can help protect your customer data as well. And keeping up with compliance changes can help protect you and your customers. 

Finally, keep an irregular vaulting schedule. Don’t make it easy for someone to predict and plan when you and the machine will be vulnerable. It’s also a good idea to vault the machine outside of the location’s hours of operation so that there is less foot traffic during vaulting.

Is An ATM Business Worth It?

Only you can answer this question. We will say that an ATM business is worth it for thousands of IADs in the United States. If it works for them, it could work for you. You don’t need any official education, training, certification, or experience to get started in the ATM business. And once you get past those few initial steps, you can start making money immediately with little to no marketing efforts.

Your success as an independent ATM deployer is completely up to you. The process is simple, but don’t expect it to be easy. It will require some effort. You will need to plan, be organized, and make well-informed decisions. Fortunately, you don’t have to do any of it alone. 

If you work with an ATM processing company like ATMDepot.com, they will walk you through each step. Do your research, ask lots of questions, and start making passive income! How much is up to you. Ready to get started? Get your free ATM start-up kit today!

7 Common Small Business Mistakes

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There are some common small business mistakes that apply to independent ATM deployers (IADs) as well. Fortunately, you have an opportunity to learn from those mistakes others have made. Being aware ahead of time of what can go wrong can not only provide you with peace of mind but also save you time and money in the long run. 

Knowing where things can go wrong can help you avoid headaches and early failure. Use this list of 7 common small business mistakes to make the most out of starting your ATM business. 

7 Common Small Business Mistakes

1. Trying to Do Everything Yourself

Don’t try to do everything yourself. Especially at the beginning. Use your resources. Ask for help when you need it. This will help you avoid a number of other, industry-specific mistakes.

Talk to other IADs for advice. There are a number of Facebook groups you can join to learn from other people’s questions and ask your own. And don’t hesitate to ask your ATM company for help. You never know what resources are available until you ask. Your ATM processing company wants you to succeed because if you make money, they make money.

Finally, it’s absolutely okay to delegate any ATM business operations you don’t enjoy handling. If you don’t want to clean your machine or load cash, pay someone else to do it for you. The point of an ATM business is to generate passive income. So if you find that you are doing more work than you feel is worth it, share the load!

The point is to avoid making mistakes by not being afraid to ask for help. Plus, you want to make sure you don’t get burned out. Operating a business that you don’t enjoy isn’t going to see as much success as one you do enjoy.  

2. Overspending or Underspending

This one is tricky. You want to make sure you find a happy medium when it comes to overspending and underspending. You will need to weigh pros and cons to determine which costs are necessary and which are extra. 

For example, a refurbished ATM machine will save you money upfront compared to a brand new machine. However, if you aren’t great with tech, a new machine might be worth it in the long run if it saves you time and money having to figure out a less user-friendly machine or constantly calling technicians for help.

You also want to be mindful of your cash flow. Make sure that your list of expenses is very detailed and that you have a budget for your business. Although it’s exciting to start seeing that passive income hit your account, be careful not to spend it right away. You will want to account for any costs related to maintenance, repairs, insurance, or other emergencies, so make sure you set some money aside for these things. 

And don’t forget about financing. You can always look into leasing a machine or getting a loan from your bank, a friend, or a family member to get your business up and running. Don’t let that stop you from starting your business.

Just remember that some costs are absolutely necessary while others can wait. You might want to go ahead and pay for your own wireless router but wait until your business starts making money to spring for video surveillance. You want your business to be reliably operational before looking for ways to improve the customer experience.

3. Launching without a Plan

One of the most harmful common small business mistakes in the ATM industry is starting without a plan. Planning includes everything from negotiating a good placement location to drafting contracts to preparing for emergencies.

Before you can operate your ATM machine, you need to have a site to operate it from. Before you can get a site, you have to approach multiple location owners to gauge interest. And before you can get a location owner’s interest, you have to know what you are going to say and how you are going to handle their objections.

If you don’t have these plans ahead of time, you could get overwhelmed or feel pressured and stressed. The longer you have a machine without a place to operate it from, the longer it will take you to make your return on investment (ROI) and profit. So the better your plan, the quicker and easier getting started will be.

And don’t skip the contracts. Any time you enter into an agreement with a location owner, vendor, or other third party, make sure you read their contracts very carefully or develop your own. This is an important step in ensuring that all responsibilities and compensation are clearly outlined and that no one backs out unexpectedly leaving other parties in a tight spot.

4. Neglecting to Set SMART Goals

Goal setting is paramount to success. How else will you know whether your business is working for you or not? How else will you be able to scale your business? Specifically, we recommend setting SMART goals. SMART goals are specific, measurable, actionable, relevant, and timely. 

So any goal you set for yourself should be specific. Rather than just say, I want to make passive income, think of a number (this will also help you determine the perfect surcharge fee). 

Numbers are also measurable. If you say you want to make $100/day, you can definitively say yes you’ve accomplished that or no you haven’t by looking at the transaction history. 

Once you have that specific, measurable goal, you can then act on it. If you say you want to make $100/day, then you know that by setting a $5 surcharge, you can reach that goal with 20 transactions. If you are shy of your goal, act again. Do you need to reposition the machine? Add a sign to draw attention? Lower the surcharge fee to get more transactions?

A financial goal is also relevant. It is an important reason for why you are in this business in the first place. It’s an important step toward other goals you might have such as purchasing a vehicle, taking a vacation, quitting your day job. A goal that is important to you is more likely to be accomplished.

Finally, you want to set a timeframe. Maybe expecting to make $100/day is a lofty expectation to have the day you install and program your machine. Maybe, at the very latest, you want to start making $100/day within the first 6 months of being up and running. THAT is a specific, measurable, actionable, relevant, and timely goal.

5. Failing to Market or Advertise

This is one of the common small business mistakes to avoid when you are looking for more placements. If one of your goals is to scale your business, you need to let people know what it is that you do. So once you’ve been in business with at least one machine for a while, it’s a good idea to start marketing yourself once you have enough revenue to do so. 

You can create a business name and logo to display on your machine screen or ATM wrap. You can create ATM business cards to have on hand when meeting new people. And you can even advertise your service on social media. There are lots of ways to market yourself, so don’t skip out on this if you want to own a fleet of machines!

6. Being Disorganized

As you’ve probably gathered from the five common small business mistakes above, it’s extremely important to be organized. But don’t worry. There are a lot of tools and resources at your disposal. And if you don’t consider yourself to be a very organized person, maybe this is one of the tasks you end up delegating!

First, of course, don’t start without a plan. Second, make sure you are prepared to start your business by gathering all of the necessary paperwork and documentation. Third, don’t forget about contracts, particularly the site location agreement (SLA). 

Additionally, keep your finances organized so that you don’t find yourself out of money in the event of an emergency. Finally, make sure your machine never runs out of cash!

If your machine runs out of cash, you won’t be able to operate your business. You will lose out on income during this downtime, and you risk losing face with the location owner and customers. Running out of vault cash over the weekend or a holiday is even worse since you won’t be able to withdraw large sums of cash when your bank is closed.

Fortunately, with remote online monitoring, you can get low cash alerts. This is the number one tool you will want to use to stay organized. You can view all activity on your machine in real time, and you will want to use this data to inform all of your business decisions. Knowing the busiest days and times can help you create a convenient vault loading schedule to ensure your machine is always stocked.

Being organized shows that you are serious, professional, and reliable. That is the kind of IAD people want to work with.

7. Fearing Failure

The most important of all of the common small business mistakes you can make is fearing failure. This is what can keep you from trying at all. You can’t start a business or make money if you don’t even try. You have to take the ATM business one step at a time knowing that if you fail, you will learn from it and do even better going forward.

But fearing failure is a mistake you can make even after you’ve been in business for a while. This can cause you to refuse to pivot which can be a costly mistake. You have to be able to recognize when something isn’t working or when something could be done better—and then change it. 

Don’t just do something because it’s what you’ve always done or because it’s what everyone else is doing. Every small business is different. Each ATM business is curated to fit the IAD’s lifestyle and goals. So if your business model stops aligning with your lifestyle and goals, your business model needs to be adjusted.

This might mean leaving a toxic partnership with a particular location owner or delegating some of the ATM operations. Try not to worry about revenue risks. It will be worth it to get back to enjoying your business. Your business should not hurt other areas of your life. If it does, it might be time to pivot.

Finally, don’t be afraid of new technology. Technology is constantly improving to make your life and your customers’ lives easier. So don’t be afraid to try something new and improved, and don’t choose traditional routes just because they are familiar. 

You can’t win if you don’t play. You can’t succeed if you don’t try. So don’t be afraid to pivot, and don’t be afraid to fail. 

Conclusion

Don’t plan to make no mistakes in your ATM business. If you set out with that expectation, you risk disappointment and discouragement. Instead, treat them as learning experiences and move forward stronger. Sometimes, it can help to document these mistakes. Jot down what went wrong, what you did to fix it, and how you can prevent or avoid repeating the mistake. 

Use this list of 7 common small business mistakes as a map for how to proceed in your ATM business smoothly, and rest assured knowing that there are very few mistakes you could make that you wouldn’t be able to recover from. And remember: ask for help. ATMDepot.com has a host of resources for new IADs including training videos, SLA templates, and 24/7 live support. So don’t hesitate to contact us today!