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

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!