Cost to Start ATM Business: Is It Worth It?

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How much does it cost to start ATM business? Well, it depends on your goals. You might be looking for the ultimate side hustle that helps you generate a little extra spending cash or supplement your regular job. Or, you might be looking for a semi-passive income stream to replace your 9-5 grind. 

Regardless of your goals, ATM business startup costs will fall into three categories: equipment, vault cash, and various operational costs. All of these costs vary from owner to owner. 

Are the startup costs worth it? Can you generate enough revenue to turn a profit? Well, yes. Otherwise no one would do it! Owning ATM machines won’t get you rich. But an ATM business requires relatively little overhead compared to other small business models. And it’s difficult to lose money with an ATM business. It isn’t a matter of if you will make money, it’s a matter of when.

The sooner you reach your return on investment (ROI), the sooner you can start to turn a profit, making all of your time and effort worth it. This article will give you an idea of how much to budget to start an ATM business and the return you can expect.

Cost to Start ATM Business

Equipment

The main cost to start ATM business is the machine itself. ATM machines can range in cost from $1,000 to $8,000. But realistically, $2,000-$3,000 is the range for the most common free standing ATM machines. 

There are various factors that can affect the cost of an ATM machine. For example, you can purchase new or certified refurbished equipment (this is really the only kind of used equipment we recommend). There are different sizes of machines, too. Smaller, wall-mount machines will be chapter than the bulky through-the-wall (TTW) machines. 

But free standing is the most common. It holds more bills than a wall- or counter-mount which saves you time on vaulting and therefore makes more money because it can service more customers and accommodate higher withdrawal amounts. TTW machines are great for garnering 24/7 access to your ATM machine, but creating a space for this type requires construction.

Then you want to consider features. There are different brands of ATM machines and different models. Some offer features that others don’t. So which ones are the most important to you and fit in your budget? 

For example, lighted keypads draw customers in at night. Signs can be added to the top of your machine to help catch the eye of passers-by. And cameras can add an extra layer of security to your business.

You’ll have to weigh the decisions of your ATM equipment purchase. Do you want to spend a little bit more for a brand new ATM machine that comes fully loaded or is it a bargain to purchase a used or refurbished machine that might need upgrades or supplemental features to draw customers?

Vault Cash

Vault cash is about $2,000 of your own money that is tied up in your business. This is the money that you withdraw from your bank and fill the machine with. This is the money that is dispensed to your customers, the ATM users.

Don’t worry: your processing company will settle these funds back to your account. But you can’t use this money for anything else because you’re out of business if you don’t have cash for your customers!

You can also hire an independent vaulter or vaulting service to take care of this for you. If you don’t have the $2,000 startup cash to vault the machine yourself, you can consider hiring this out, but over time you will end up paying more than $2,000 for this service, and it’s going to cut into your profit.

Operational Costs

What is the ongoing, operational cost to start ATM business? Again, this depends on what you decide is the most important to operating your ATM. For example, you don’t have to get insurance, but it’s a good idea to! You can typically get $1 million in general liability coverage for $400-$700 a year. 

Then there’s internet service. Your ATM machine will need to connect to the internet in order to communicate with the networks and, essentially, function. The location or business where you install your machine will probably have an internet service provider (ISP) already. But what happens if they forget to pay the bill or service goes out? You’re out of business, and time is money. It is better for you to invest in your own wireless device so that you have complete control over your machine’s operation and you don’t have to wait on anyone else to solve the problem.

You will want to purchase some simple cleaning supplies to make sure your machine is always presentable and attractive to customers. And some IADs lease a space to operate their ATM from, but it typically makes more financial sense to negotiate a split of the revenue between you and the location owner so that everyone wins and is motivated to drum up business.

Mileage and gas are also considerations when it comes to regular travel to and from your machine. So you’ll want to assess the opportunities for ATM service in your area to determine whether or not it’s worth it to start an ATM business. The point of an ATM business is to generate semi-passive income. Therefore, you want your business to be as convenient and easy as possible.

Is It Worth the Cost to Start ATM Business?

One of the beautiful things about starting an ATM business is being your own boss. An ATM business is flexible, customizable, and little work (you can be making money while you sleep). For a lot of people, that’s enough motivation right there. 

But it also makes it difficult to put an exact number on startup costs. We can say, though, that you’re looking at a lot less overhead than most other businesses. And if you don’t make a lot of money with your machine, you can move it to a better location! If you find a great spot where there is a demand for cash and little competition, you will make money. But how much?

Well, let’s do some more math:

Formula #1

Approximately 2-3% of people that actually see an ATM machine in an establishment will likely use the ATM. So say, for example, that your location has an average of 200 customers visiting each day. You could estimate that approximately 5 of those 200 people would use that ATM daily.

You can then take that number of people and multiply it by the amount of your surcharge ($3-$4). If you take that number and multiply it by how many days the location is open during the year, you’ll be able to estimate how much money your machine might make in a year. You can also get a monthly revenue estimate. 

(5 x Surcharge Amount) x Days Open Per Year = ATM Revenue Per Year

Use the calculator here to help do the math more quickly.

Formula #2

Or, you can operate under the assumption that the number of adult patrons an establishment has in a given day—plus or minus 10%—will use the ATM on a monthly basis.

This rule of thumb is more commonly followed if the establishment accepts credit cards or gives cash back at the point of sale (POS). However, alternate payment methods will affect ATM usage but will also convert some users to cash. This also helps lower credit card fees the establishment pays. Usage could be affected by as much as 20%-40%.

# of Adult Patrons Per Day +/- 10% = # of ATM Uses Per Month

Use the calculator here to help do the math more quickly.

Basically, once you purchase an ATM machine and set it up with processing, it could pay for itself in less than a year if it’s in a good location. It could pay for itself in as little as a few months in a great location. After that, you begin to profit!

Is the Cost to Start ATM Business Worth It to You?

So what do you think? Does the profit potential outweigh your startup costs? Most importantly, have you spotted a gap in the market where a machine could perform really well? If so, jump on it before someone else does! There is still plenty of money to be made from an ATM business because people are still using cash. It just might depend on where you’re located and the opportunities in your area. 

If you’re interested in learning more about how to start an ATM business, check out the ATM business road map which will walk you through the entire process from start to finish. Simply have questions? Contact us today to see if an ATM business might be right for you!

Is an ATM Business Profitable: How Much ATM Business Owners Make

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Is an ATM business profitable? Well, yes. Otherwise they wouldn’t exist! Not all ATM machines are owned and operated by financial institutions. Many ATM machines are owned and operated by independent ATM deployers (IADs). 

An IAD’s main source of revenue comes from the surcharge fee imposed on transactions. However, there is more than one way to own (and profit from) an ATM business. When simplified, ATM business profit comes down to a few factors: location, transaction volume, surcharge fee, and operating costs.

For any business, the goal is to maximize revenue and minimize costs. The difference equals profit. In this article, we’ll provide you with a few formulas you can use to calculate ATM business profit. But we’ll also provide you with a look at other ways to make money in the ATM business. Keep reading to learn how to make your ATM business profitable.

How to Calculate Your ATM Business Profit

There are a couple of rules of thumb you can use to gauge how much money your ATM might generate. However, remember that there are many factors that can affect the success and profitability of a location (more on that later). So no location is a guarantee. These formulas simply help to give you an idea of whether or not a location is a good fit and what you can expect in terms of revenue. 

Rule of Thumb #1

The first rule of thumb says that approximately 2-3% of people that actually see an ATM machine in an establishment will likely use the ATM. Say, for example, that your location has an average of 200 customers visiting each day. One would expect or speculate that approximately 5 of those 200 people would use that ATM daily.

You can then take that number of people and multiply it by the amount of your surcharge. If you take that number and multiply it by how many days the location is open during the year, you’ll be able to estimate how much money your machine might make in a year. You can also get a monthly revenue estimate. 

(5 x Surcharge Amount) x Days Open Per Year = ATM Revenue Per Year

Use the calculator here to help do the math more quickly.

Rule of Thumb #2

The second rule of thumb suggests that the number of adult patrons an establishment has in a given day—plus or minus 10%—will use the ATM on a monthly basis.

This rule of thumb is more commonly followed if the establishment accepts credit cards or gives cash back at the point of sale (POS). However, alternate payment methods will affect ATM usage but will also convert some users to cash. This also helps lower credit card fees the establishment pays. Usage could be affected by as much as 20%-40%.

# of Adult Patrons Per Day +/- 10% = # of ATM Uses Per Month

Use the calculator here to help do the math more quickly.

Basically, once you purchase an ATM machine and set it up with processing, it could pay for itself in less than a year if it’s in a good location. It could pay for itself in as little as a few months in a great location. After that, you begin to profit!

The Location Factor

A high-quality location makes an ATM business profitable. While it is actually very difficult to lose money with an ATM business, the sooner your machine pays for itself, the sooner you can begin to make a profit. 

An ATM can be installed anywhere. But for it to be successful, there has to be a need for the service. That means that the more people who both have access to the machine and need cash, the more profitable your ATM business will be. 

So, when selecting a location for your ATM, look for places that see a lot of business or foot traffic, aren’t near direct competition, and offer opportunities to spend money. Cash-only locations are even better and can automatically increase your profit estimates. 

Once you are in business, you will make money every time the machine is used. But you have to make sure that you get enough transactions in a month to cover operational costs.

Operational Costs

Fortunately, there aren’t a ton of operational costs to consider each month. Essentially, you’re looking at travel costs to and from the location, receipt paper and cleaning supplies, and maybe wireless service and general liability insurance. 

If you make more revenue from your machine than what it costs you to operate your business each month, you will profit. 

Don’t forget to factor in revenue share when estimating your profit. If the location receives a portion of the machine’s surcharge revenue, add that to your operational costs if you calculate your profit based on the flat surcharge fee. Or, you can adjust the surcharge in your calculation based on the share that you receive.

Remember, too, that you will have a couple of thousands of dollars tied up in vault cash. This is the cash that you load into the machine to be dispensed each transaction. It’s a good idea to add that amount to your startup costs when determining your ROI goals.

Revenue Streams That Make an ATM Business Profitable

Surcharge

IADs make the bulk of their revenue from the surcharge fee imposed on ATM transactions. The average surcharge fee is about $3-$3.50. Ultimately, this decision is yours. Although, some location owners will want a say in how much to charge their customers for ATM service. So you will work together to find a number that works for everyone. You want a rate that is competitive but that also pays the bills….

Scale

To really make an ATM business profitable, place more than one machine. On average, if you want to earn $1,500 per month from your ATM business, you’ll need 5-7 ATMs in average locations. 

Not all locations perform equally. Obviously, 2 or 3 great locations will make your ATM business profitable faster. But every IAD has a few good ATM locations, a few slow ATM locations, and a few great ATM locations. If your machines have a topper, a wrap, or custom screen graphics, you might also be able to increase your revenue by selling ad space. Then you’ll really be in business!

Other Opportunities in the ATM Business

There are other ways to make money with an ATM business besides owning and operating your own machines. You can really assume responsibility for any one part of the process and hire yourself out to others in the industry.

For example, you can be an ATM site locator. This is someone who negotiates with location owners on behalf of ATM owners. Someone who wants to own and operate an ATM machine but doesn’t want to put in the effort of finding a location can hire a site locator.

A site locator typically does not own any machines but matches locations and ATM owners. In exchange, an ATM site locator can request a flat rate or negotiate for a share of the surcharge from the ATM owner. You could potentially be a site locator as well as an IAD if you wanted to make extra money without managing more machines.

You could also be an ATM vendor, or salesperson. There are business owners who want an ATM machine on site and want to operate it themselves rather than working with an IAD. You would explain ATM options and add your commission rate to the cost of the equipment to make your profit.

Or, you can be an ATM vaulter. If you have access to cash, you can partner with ATM providers to offer cash vaulting services. You would travel to each ATM and make sure it’s stocked with cash. To calculate your profit potential, you could charge a flat rate or create a fee schedule based on distance and travel time.

An ATM Business Is Profitable

If you’re considering an ATM machine or want to get into the ATM business as a side hustle to earn some extra cash or as a passive income, you need at least 3-4 people per day to use your ATM (if it’s available 7 days a week) to pay for the machine and make a few bucks. If you’re looking to make salary-level income, consider scaling your business and placing 5-7 machines.

It is difficult to provide an exact number or even range for how much ATM business owners make. But we can provide you with some guidelines to help you predict your own earning potential based on your location and opportunities available to you. An ATM business is very customizable and therefore very difficult to generalize. But if you follow industry trends, there is really no way you can lose.

Despite certain challenges to an ATM business like location negotiation, competition, and technological advancements in payment platforms, where there is a need for cash there is an opportunity for you to make money. So if you’re a motivated entrepreneur who doesn’t quit too soon, then the ATM business is for you. 

Most people fail because they quit too soon. If your first locations are slow, don’t get discouraged. You can always move them to better locations!

For detailed guidance at every stage of the ATM business process from an ATM business mentor and ATMDepot.com CEO himself, check out the ATM Business Road Map. You can try it risk-free for 30 days. And you don’t have to complete the course to get started right away!