Cash App Taxes Could Increase ATM Usage

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Cash app taxes could increase ATM usage. Many small businesses, freelancers, and those employed in part-time work who rely on cash apps, or payment applications, might have a new tax form to file next year. 

Now, just $600 in online payments will trigger form 1099-K. What does this mean for payment app users? What does this mean for independent ATM deployers (IADs)? 

Well, increased tax reporting and scrutiny could push many small businesses and self-employed individuals to encourage or limit themselves to cash transactions. And more cash transactions means more cash withdrawals and more ATM business.

What are Payment Apps?

Payment apps allow person to person (p2p) transactions. Whether payment is for goods and services or for monetary gifts or reimbursement, payment apps are a quick, convenient, free way to send money to people you know and trust. 

Payment apps are popular alternatives to cash because they allow users to pay for goods and services and share money among friends and family without needing to carry a wallet. Payments are now immediate. You don’t have to worry about going to the bank or about someone forgetting to “get you back.” 

Payment apps work by linking debit cards, bank accounts, and sometimes credit card information and securely storing it to send and receive money right from your phone. No wallet needs to be present, you aren’t limited to in-person transactions, and in some cases payments can even be made internationally.

The biggest draw is that they are free to use. The only nominal fees are for expedited or extra services.

What are the Most Popular Payment Apps?

The convenience of payment apps has made them quite popular. Some of the most popular payment apps in 2022 are PayPal, Venmo, Cash App, and Zelle. Each of these payment apps has millions of active users all over the world. And many people use more than one depending on their needs. 

Each app has its own niche, if you will. PayPal is the oldest payment app. It has earned the public’s trust because of its strong encryption technology used to keep user accounts secure. PayPal is a good option for freelancers and other business purposes because it offers an invoice feature that can be used to specify the nature of purchased goods and services.

Venmo is the most popular payment app for exchanging small amounts of money between friends and relatives. Need to spot a friend $5? Venmo. Need to pay your share of the rent? Venmo. Splitting a dinner bill? Venmo.

Cash App is another hassle-free way to send small amounts of money to contacts. Cash App doesn’t offer the social aspect Venmo does (a feed of who sent money to whom and for what). But it does offer users a digital wallet that enables the buying and selling of bitcoin. 

Zelle can be used independently as its own app. Most Zelle account holders, though, use the app through their banking app. Banks like Chase, Bank of America, and Wells Fargo use Zelle to allow their customers to send small amounts of money safely from their bank account. 

In order to use one app, both sender and recipient have to have it. So this can cause some people to have active accounts with multiple payment apps at one time.

Do Cash App Taxes Apply to All Transactions?

You might have heard about cash app taxes from unnecessarily worried peers or even seen something in the news. However, very little is actually changing in terms of tax laws.

Monetary gifts and reimbursement are still considered non-taxable income. So only those who receive payment for goods and services through a third-party app should expect to file a 1099-K form with their 2022 taxes next year.

What is a 1099-K Form?

Form 1099-K is a tax reporting form just like many others everyone has filed in their lifetime. It provides the IRS with information about the gross amount of payment transactions a person receives via third-party payment networks (like the ones listed above). 

The Good News

You are probably already familiar with this form if your gross payments exceeded $20,000, and you reported earnings if you had more than 200 payment transactions. The difference now is that rather than the $20,000 threshold, it’s $600. And rather than 200 transactions, the minimum is 1.

What this means is that more people will be filing form 1099-K next year than previously. More people receive at least $600 worth of income in a year paid via payment app than those who receive over $20,000.

These payment app companies are required to send a 1099-K to the tax filer as well as to the IRS. This actually simplifies tax filing! Say a freelancer or part-time worker has multiple streams of income paid through three different payment apps. Rather than hunting down and documenting information for each app separately, form 1099-K contains information about the gross amount of payment transactions made on any and all qualifying third-party payment networks.

So, whether individuals receive one $600 payment in exchange for goods or services or they receive thirty $20 payments, they should expect to receive a 1099-K form by January 31, 2023.

The Bad News

The problem is, it is possible for this form to reflect both taxable and nontaxable transactions. To prevent confusion and delayed tax filing, it might be a good idea to separate business and personal accounts. Otherwise, someone might end up paying more taxes than necessary. And to make sure they don’t, they’ll need to look at the information carefully and compare it to their (hopefully) carefully maintained records….

Those who only receive $600 via digital payment apps in a given year might not see the importance of separating this income from personal gifts and reimbursements or of maintaining records of it. Now that more people will have an extra form to file next year, more people might dread the extra time and responsibility of discerning the information.

However, self-employed individuals are and always have been required to report all earnings to the IRS when filing their tax returns. So those who aren’t trying to break the law don’t have anything to worry about!

Unfortunately, there could be a number of people receiving form 1099-K by mistake. Take, for example, the bride who worried that monetary gifts she received to help fund her honeymoon would be reported to the IRS and taxed. If she were to receive a 1099-K form, all she would have to do is prove that the money she received through digital payment apps was gifted and therefore nontaxable income.

Although this burden of proof might not be so easy for some people, it should be relatively easy to rectify. Mistakes should be reported to the third-party digital payment company who issued the payments. They will resolve the issue, not the IRS.

Why Are Cash App Taxes a Thing?

2021 American Rescue Plan Act

This new law concerning payment or cash app taxes is part of Joe Biden’s 2021 American Rescue Plan Act which was passed by the Democrats in March 2021. (You might be familiar with the additional stimulus payments, enhanced unemployment aid, and expanded child tax credit also covered by this bill.) 

As a result of the American Rescue Plan Act of 2021, any transactions made after March 11, 2021 that exceed $600 must be reported to the IRS, regardless of the number of those transactions. Prior to this legislation, third-party payment platforms would only report users who had more than 200 commercial transactions and made more than $20,000 in payments over the course of a year.

It’s important to remember that this bill doesn’t change tax laws, it only changes income reporting. Self-employed individuals have always had the responsibility of reporting income from all sources and paying taxes on it. Now, there is just another form in the mail, and it might include nontaxable income if people aren’t careful.

The purpose of this bill is to cut down on tax evasion. It allows the IRS to keep track of transactions made through payment apps that often go unreported. This digital trail keeps freelancers and other self-employed or part-time workers from not reporting or underreporting their earnings.

Tips for Taxpayers

In order to accurately report income, these apps will need additional information. They will need either an Employer Identification Number (EIN), Individual Tax Identification Number (ITIN), or Social Security Number (SSN). If this information is not already on file with the digital payment apps people use, they will be reaching out to users to confirm tax information due to this new law.

Remember, too, that only money received in exchange for goods and services should be reported and taxed. Nontaxable income includes monetary gifts (birthday, holiday, wedding), split bill payments, and other reimbursements. Any items sold at a loss are also nontaxable. Examples are items sold at a garage sale or on Facebook Marketplace. 

But those who purchase new items and resell them for profit should expect to report that income to the IRS. If they don’t, and they receive payment through a payment app, the IRS will know.

The new law requires that form 1099-K go to both the taxpayer and the IRS. So, there is a good chance that they will notice any discrepancies between federal income tax returns and income reports. Therefore, it’s important for individuals to report their taxable income and keep good records.

What Do Cash App Taxes Mean for IADs?

This new legislation affects anyone who receives earnings through digital payment apps instead of direct deposit, paper check, or cash. Those most likely to accept these types of payments are small businesses, freelancers, minors, and other self-employed, part-time workers.

About 1 in 4 Americans makes extra income online. It might be from selling something, renting something out, or providing online services. And global transactions associated with the gig economy are projected to grow to about $455 billion by 2023.

So anyone who doesn’t want their online income reported directly to the IRS will need to conduct more business using cash. Not to mention minors who earn income from mowing lawns, babysitting, caretaking, and other odd jobs.

It seems some kids will be learning about taxes a lot sooner than most. And it could result in their guardians covering these taxes, too. This is just more encouragement for minors and other part-time, odd-job workers to revert to relying on more cash payments. And that’s good news for the ATM industry.

Cash is King

We never believed that digital payment apps would replace cash to the extent that it becomes obsolete. This just confirms what we’ve been saying all along: Cash is king! 

It’s safe, it’s private, and it’s universal. Everyone has it, everyone can accept it, everyone can spend it. And as long as cash has a place in society, so will ATM machines and ATM businesses!

Convinced that there is no better time than now to start or scale your ATM business? ATM Depot can help. Contact us today to get started!

Cannabis Crypto: An Alternative Business Model for IADs

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What do cannabis, crypto, and ATM businesses have in common? They are high-risk industries unsupported by the federal government. All three of these industries are prone to unlawful business practices. 

Not fully supported by the federal government, these businesses find it difficult to bank safely and affordably. Often, business owners have to find a work-around, pay ridiculous fees and taxes, and/or face extreme scrutiny and audits. 

Could cannabis crypto be an alternative business model for IADs that serves as a solution? Find out how the three industries overlap and can work together.

ATM Businesses as High-Risk Accounts

It’s no secret that many banks are hesitant to take on ATM business accounts. The cash-heavy nature of ATM businesses make them high-risk due to the potential for money laundering activity. Banks have to be especially wary of such liabilities. They are held responsible for servicing companies that conduct unlawful business practices. 

In 2021, the Office of the Comptroller of the Currency (OCC) finalized its rule to ensure fair access to banking services by various financial institutions. This means that banks cannot make blanket decisions for whole categories of customers when provisioning certain services. Instead, they must conduct individual risk assessments for each customer.

However, many ATM owners still report difficulty finding ATM business-friendly banks. That’s probably because of the difficulty in making a good impression during the risk assessment….

Not only are ATM business accounts risky for banks to service, they are also expensive. The potential for audits, compliance reviews, investigations, and regulation changes are heightened for banks that do take on ATM business accounts. 

They also face federal penalties for servicing a company that engages in money-laundering activity or fraud. Banks that service ATM businesses have to meet their cash needs as well. It can be costly to order the cash necessary and make drop-off arrangements. 

These costs might be manageable for larger banks, but they are notoriously less likely to take on ATM business accounts due to the scrutiny they already face. And smaller banks are less likely to take on the extra costs. Therefore, there are few banks that IADs consider ATM-business friendly. And the ones that are can still close accounts at any time with little to no warning.

This uncertainty is a costly threat to ATM business owners. They cannot consistently provide their service if their access to cash is disrupted abruptly.

Cannabis Illegal Under Federal Law

Similar to ATM businesses, legal cannabis businesses also struggle to find access to safe, affordable banking. Although legal in many states, whether medicinal or recreational, cannabis is still illegal under federal law. This means that banks, federal institutions, are bound by certain regulations when it comes to providing services to businesses in the cannabis industry. 

Dispensaries cannot accept debit and credit transactions for cannabis-related goods and services. Since cannabis is illegal at the federal level, banks and credit card companies won’t allow these transactions to take place over their networks. And banks have to tread lightly to avoid breaking money laundering laws or servicing businesses that engage in illegal business practices.

That leaves dispensaries no option but to accept cash exclusively. You can imagine the risks this poses to these businesses. Not to mention the costs. 

Barred from the traditional banking system, dispensaries are forced to pay excessive fees to bank at state-chartered institutions or hoard cash on-site. And keeping cash on-site is not a cheap alternative. This makes dispensaries targets for robberies and increases the level of internal theft.

Add to that the costs of increased security such as safes, cash-counting equipment, cameras, weapon detectors, and other physical reinforcements. And to combat internal theft, there are the costs of background checks and training.

Nor is cash a hassle-free alternative. Cash transactions in the cannabis industry are especially subject to meticulously scrutinized payment and tax speculation. This causes dispensary owners to fear federal-level accusations of illegal or suspicious business practices.

The stigma surrounding the cannabis industry for the potential of criminal activity hurts dispensaries’ ability to provide legal goods and services to their customers.

Crypto Not Accepted as Legal Tender

Although a popular payment solution for many reasons, cryptocurrency is not accepted as a legal tender. It is a high-risk investment because of its volatility. Furthermore, since it’s a decentralized currency, it is difficult to regulate and, more importantly, to tax. 

“[Crypto-savvy retailers] will accept cryptocurrency payments and be exposed to either capital-gains risk or the risk that these currencies will lose their value suddenly and without warning when tax payments and rent are due,” says Khurshid Khoja. The unpredictable nature of crypto makes it impossible to rely on 100%. This means that businesses still must depend on banks for operations such as payroll, taxes, and other expenses like utilities.

Anyone can use cryptocurrency to purchase goods and services. But because it lacks the qualities of traditional currency, it isn’t considered a legal tender. Therefore, although it may be a convenient form of exchange for consumers, merchants run into complications when accepting it. Add this to the number of complications cannabis businesses that want to accept crypto payments already face.

SAFE Banking Act

The Secure and Fair Enforcement (SAFE) Banking Act is intended to give companies access to banking services that are currently unavailable. The SAFE Act would eliminate penalties for financial institutions that provide services to cannabis businesses. Therefore, it would prevent cannabis businesses from experiencing unexpected account closures.

It has passed multiple times in the House but has yet to be approved by the Senate. Without it, the cannabis industry lacks access to loans, capital, and basic bank accounts. 

The SAFE Banking Act would also allow dispensaries to minimize the amount of cash they store on-site. This would in turn minimize the amount of robberies they experience. This contributes to the overall safety of dispensary workers and the surrounding communities.

Cannabis Crypto: A Possible Solution

The Problem

Cannabis locations are already prime locations for ATM placement due to their reliance on cash transactions. Additionally, because of the nature of the business, cannabis dispensaries are not authorized to own or operate ATM machines. 

They’ve even run into problems with cashless ATM machines. Visa prohibits their use because oftentimes point-of-sale (POS) purchases get miscoded as ATM cash disbursements but do not actually disburse cash which affects the interchange.

So dispensaries cannot accept debit or credit transactions, and cash transactions are a liability. But what about crypto payments? According to Cheyenne Ligon and Sage D. Young, crypto isn’t a fool proof solution, but it’s a start. 

Benefits for Dispensaries

First of all, the blockchain associated with cryptocurrency allows dispensaries to process payments affordably and prevents them having to go through third-party processors. Furthermore, crypto wallets offer a level of security not provided by the traditional banking system. 

While the federal government is concerned about the use of crypto in illegal activities such as money laundering and tax evasion, the crypto wallets actually ensure accurate reporting by using the blockchain as an audit trail. It can indicate how businesses receive payment and from which wallets.

Cannabis crypto also benefits customers by offering them a safe and convenient alternative to cash or card payments. “Crypto transactions make paying for cannabis goods and services more accessible, as anyone with a smartphone can make a low-cost transaction,” says Casia Lanier.

Although the number of crypto users is relatively low, it is increasing steadily. The more businesses that accept and promote crypto payments, the more public perception crypto will receive, and the more widely accepted it will become.

For those in the business of cannabis, crypto-to-cash payment platforms have encouraged the crypto-curious to take the leap. Benefits include less volatility and guaranteed compliance.

More and more dispensaries will be moving to cannabis crypto payments, if for no other reason, for an alternative to traditional banking services that aren’t available for them today.

The rise of instant crypto-to-cash payment platforms has helped some crypto-curious cannabis companies feel more comfortable about accepting crypto payments, both in terms of avoiding volatility and ensuring compliance with regulations. 

According to Lanier, “the potential for crypto transactions becoming accepted forms of payment is high, and the barriers to entry are almost non-existent for businesses across every industry…For businesses thinking of integrating crypto payment solutions, there is no better time to do it than now.”

Cannabis Crypto an Alternative Business Model for IADs

This is good news for IADs. Cannabis crypto provides ATM owners with a new and relatively untapped market for machine placements and uses. 

Bitcoin ATM machines (BTMs) function very much in the same way as regular ATM machines. This makes them approachable and user-friendly for business owners, consumers, and IADs. 

By offering BTM services to cannabis businesses, IADs can bring cannabis, crypto, and ATM industries together to bypass traditional federal banking regulations that so often shut these businesses out.

Want to convert your ATM machine into a BTM? Interested in getting into the cryptocurrency game? Contact us today to discuss your options!

Do ATMs Have GPS?

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Do ATMs have GPS? Should yours?

Thieves go where the money is. Unfortunately, that puts a target on your ATM machines. However, there are many ways to mitigate your vulnerability and loss. As criminals get more creative and more bold, more precautions are taken and security measures implemented. So which are right for you?

No ATM business looks the same. Some independent ATM deployers (IADs) operate one machine, others have entire fleets. Some machines are busier and more profitable than others. And machines are in a variety of locations with a variety of potential threats.

So when deciding which security measures are right for you, there are a number of factors to consider. Location, placement, ATM type, and budget are a few. 

If you want to know do ATMs have GPS, the answer is yes. Do all ATMs? No. GPS tracking is an added feature that ATM operators can spring for just like any other security feature or add-on. 

In this article, we’ll explain what GPS tracking looks like and list some other security options you might want to consider. 

How Does GPS Tracking Work?

GPS tracking works just like you’d expect. The tracking device is mounted to the machine and location data allows the machine to be recovered in the event of a theft. However, there are a few other ways this can work:

In addition to informing ATM owners and law enforcement of a machine’s location, some GPS systems will also trigger a silent alarm if the machine is jostled or tilted. They can also send emails and other real-time notifications. This allows ATM owners to act quicker, retrieve their property sooner, and prevent further damage or theft.

Geofencing is another security feature that creates an electrical “fence” around a specified perimeter. Then, the owner is notified if an ATM machine breaches this electrical barrier without authorization.

Cassette trackers are also an option. Thieves might be able to break into an ATM machine and access the cash cassettes without removing the machine itself. Then, an ATM tracker would be useless, but the cassette tracker can help locate the criminals who take off with them.

Do I Need a GPS Tracker?

GPS tracking helps deter crime, recuperate property and cash, and apprehend offenders. The longer property goes unrecovered, the less likely it is to be discovered. That’s why it’s important to act fast. Knowing when a crime is taking place gives you a head start. 

Thieves who take off with entire ATM machines could be tracked and arrested before they are even able to break into the vault. This quick action could prevent you from losing hundreds of dollars of cash.

The benefits of GPS tracking are clear. But there are many other factors you should consider.

Cost

GPS tracking systems can be expensive. In many cases, ATM owners not only purchase the GPS tracking gadgets, but the companies that sell them also provide human support in the event of a theft, and that service costs money as well. 

For this reason, it’s more common for bank ATMs to have GPS trackers. They have more money to spend on security systems, and they can justify the cost a little easier than an IAD. 

Bank ATMs are bigger targets because the higher cash levels equal a bigger reward for thieves, and they are always stocked. Independently owned ATM machines have lower cash stores and are emptied at closing (or at least should be) to prevent after hours ATM robbery.

Location

If you are still wondering if you should invest in GPS tracking, consider the location of your ATMs. Are they in high-crime, large, metropolitan areas? These are the areas where ATM crimes are the highest. If your ATMs aren’t in a large city, you might not need such advanced security.

Placement

Are your ATM machines indoors or outdoors? Outdoor and other 24/7 ATM machines have a greater risk of theft because they are vulnerable during high-risk hours—between midnight and 4am. Indoor ATM machines also have other safeguards and obstacles like doors, walls, furniture, and alarms. 

Consider what security measures are already in place where your machine is located and in surrounding areas. GPS tracking only helps you during or after a crime. So your first line of defense is precautions to deter criminals and prevent crime.

Other Security Measures

There are many security measures you can take to protect your ATM machine and prevent the need for GPS tracking. You want to make sure you have eyes on your machine as often as possible. Make good decisions about who has access to the machine. And make it difficult for criminals to access; you don’t want your machine to be an easy target….

Strategic Placement

First of all, place your machine strategically. Try to place it away from doors and windows that could be points of ingress after hours. If that’s not possible, make sure it’s in view of security cameras at your location or of cameras nearby. 

Barriers and Obstacles

Create physical barriers and obstacles for criminals (while leaving a clear path for customers). Keep the front free for customers, but try to protect the sides with walls or other furniture. This will make the machine more difficult to get to, especially for hackers who might try to launch a logical attack via the electronics. We also recommend bolting your machine into the floor. 

Updated Software

Keeping your software updated also helps protect you from logical attacks. Outdated software is easier to hack and manipulate. If a criminal has to be with your machine for more than a couple of minutes, he or she will likely just move on.

Strategic Vaulting Procedures

Be strategic with your vaulting procedures, too. Keep an irregular schedule that makes robberies hard to predict and plan. Limit the number of people who have access to the machine (theft can come from within your business as well). And empty the vault after hours, like a cash register, and keep the door open to deter money-grabbers.

Pre Existing Security

The building where your machine is located might already have a number of security features in place, too. If the building itself is protected, your machine is less vulnerable. Consider security cameras, alarm systems, barred windows, etc.

Remote Online Monitoring

If you work with an ATM company like ATM Depot, you have access to remote online ATM monitoring. This allows you to have “eyes” on your machine at all times. Once you are familiar with what a regular day looks like for your ATM machine, you will be able to spot suspicious activity (too many withdrawals in proximity, too large of withdrawals).

You might even have a camera on your machine so that you can literally monitor your ATM activity remotely. Advertise that the machine is under surveillance (Smile! You’re on camera!) to deter criminals as well. 

ATM Insurance

And of course, for peace of mind, consider investing in ATM insurance. That way, in the worst case scenario, you are covered. 

Why Do ATMs Have GPS?

Some ATM machines now have GPS trackers installed. This allows the owner to alert authorities immediately in the event of a theft. And subsequently, it allows the authorities to recover the property and make an arrest. 

Therefore, ATM machines that have a higher chance of being stolen or broken into benefit from being able to locate the property and cash. In some cases, property may be recovered even before the criminals break into the vault. 

GPS tracking systems can protect your ATM machines. But so can bolts, cameras, alarms, and physical obstacles. Choose the security features that make sense for your business and fit your budget. Coordinate with the location owner to create strategies that protect the entire store. And most importantly, don’t be an easy target!

ATM Robbery: How Common Is It?

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Although ATM robbery has drastically increased in recent years, it’s still relatively rare when you consider the large number of ATM machines in operation. However, there are many precautions you can take to protect yourself and your business from theft, vandalism, and loss.

How Common is ATM Robbery?

ATM robbery used to be a lot less common. However, it’s no surprise that in light of Covid-19 and other instances of civil and economic unrest, crime in general has increased. More people are becoming more desperate and criminals are becoming more bold. 

While the number of ATM thefts reported by the FBI between 2016 and 2019 were under 50, they climbed to 254 in 2021. However, the skyrocketing ATM thefts are linked to major metropolitan areas, and you have to consider that bank ATMs are included in these numbers. 

Bank ATMs can hold as little as $40,000 and as much as $250,000. So they are more worth the effort and the risk involved. On the other hand, bank ATMs are also well-monitored. This could push criminals to try their luck at independent ATM machines that might have less security. 

Therefore, it’s important that you take necessary steps to prevent ATM robbery and other ATM crimes that could arise. Fortunately, there are actions you can take that deter criminals altogether. Keep in mind, though, that certain locations and situations require different security measures. So think about your specific location and needs while making security decisions.

ATM Crimes

ATM crimes can present themselves in a number of ways. First of all, there is a slight distinction between ATM robbery and ATM theft. ATM robbery implies that cash is stolen while ATM theft suggests removal of the entire machine.

ATM Theft 

Some pretty drastic tactics can be involved in ATM theft. You might have heard of criminals using 

  • crowbars to pry off ATM covers (also known as “smash and grabs” and also known to look a lot less neat and organized than a simple crowbar pry….).
  • hook, chain, and high-powered trucks to yank ATM machines out of walls.
  • explosives to breach or dislodge ATM machines.

The bright side in all of this is that these situations typically don’t directly threaten human victims. Theft is between the criminal and the machine. Robberies, however, get a little more personal.

ATM Robberies

ATM robbery is scary because it could happen to anyone. You or your vaulter could be robbed while loading or unloading the machine. Or your customers could be robbed while making withdrawals. The employees of the business where your ATM is located could be pressured to access the ATM machine. 

While there are a number of steps you can take to protect yourself and your employees or partners from ATM robbery, there are some tips for ATM customers as well.

For example, most ATM robberies occur at night (between the hours of 12am and 4am). Therefore, try to make your withdrawals from a well-lit location in plain view of the public if you need to make a withdrawal in the dark. Most ATM robberies also involve one offender and one victim. So, there is safety in numbers, even at the ATM. 

Additionally, don’t count or carry your withdrawal out in the open. Quickly stash it and retrieve it in a secure location. Finally, don’t risk your life for a few hundred dollars. You might be strapped, but trust us, your life is worth more, so don’t try to fight or apprehend a robber to get your cash back!

Vandalism and Fraud

In addition to stealing ATM machines and vaulted or withdrawn cash, criminals can also launch electronic attacks. This is why it’s important to regularly check your machine for vandalism. 

While “shoulder surfers” can glean a customers’ PIN numbers by standing a little too close to them, hackers typically mess with the machine itself to access this sensitive information. For example, pinhole cameras, fake fronts, skimmers and shimmers, counterfeit PIN pads, and Lebanese Loops can be installed on ATM machines and be almost undetectable to the untrained (or unaware) eye.

Fortunately, if you know what to look for, you can see a pinhole camera, feel a fake front, and see signs of skimmers. On the other hand, you might not notice a logical attack.

A logical attack involves access to the mainboard or other electronics of an ATM machine to gain control or cause it to malfunction. This could allow a criminal to gain access to ATM cash via seemingly legitimate withdrawal processes.

Keep reading to find out what you can do to combat both physical and local attacks.

How To Prevent ATM Crime

To minimize the risk of crime involving your ATM machine, you’ll want to predict vulnerabilities and set up barriers. Make things difficult for criminals. Successful attacks can take only three minutes. Attackers aren’t going to want to spend a lot of time at your machine, so if they run into obstacles, they are more likely to move on or target a more vulnerable location.

Keep Eyes on Your Machine as Much as Possible

The first thing you want to do is be strategic with your placement. This is sometimes easier to do with indoor locations as you have four walls to work within. If your machine is outdoors, your options might be limited. However, make sure the area is well-lit and in plain view of witnesses such as cameras, high-traffic streets, or locations that are open late or 24 hours.

Don’t Keep the Machine Loaded After Hours

Second, If you’re a retailer that loads/vaults your own ATM, treat your ATM machine like a cash register if you can. Unload the ATM as part of your closing process. If you place your machine where it can be seen from a door or window after hours, leave the ATM door open after vaulting. There’s no need to break into a machine that’s visibly empty.

If you are an IAD and vault cash for your locations, watch your average withdrawal and manage your cash. Try to load only what’s needed between loading days. Ensure the location has a security system and camera pointed at the ATM (also use Genmega ATMs with a GenCam if you’re concerned at all). Just like car thieves, go for the unlock cars first. When they case the retailer, they will notice an alarm and cameras. Have decals on the ATM or a welcome screen that rotates to say, “Smile, you’re on camera” and/or “Alarm protects this ATM.” And, of course, make sure the ATM is properly bolted to the floor with the best anchors for the subfloor. Thieves casing the retailer look for other opportunities and may even try to push the ATM to check how well it’s installed.

Create Obstacles

Third, make your machine difficult to get to or access after hours. Keep the front and path leading to your machine clear for customers, of course, and when you bolt your machine to the ground, arrange shelves or other furniture alongside the machine or bolt it down in a corner to restrict access to the back and one side. 

Minimizing access points helps prevent physical as well as logical attacks. Consider the top of your machine as a potential ingress point as well. Adding an alarm inside the ATM with a door sensor on the plastic exterior lock door will cause the alarm to trigger as soon as someone tries to break that; before they even attempt anything else, that’s usually the first entry point.

Remember, the goal is to create barriers. Criminals won’t spend long trying to overcome obstacles. 

Regularly Update Software

Outdated software makes logical attacks easier for hackers. Updates typically include modern safeguards. Attackers will be able to identify outdated software, so make sure you keep it up-to-date.

Work with People You Trust

Unfortunately, theft can happen internally, too. Make sure you trust the location owner, employees, and third parties. Limit who has access to your machine; the less, the better.

Check Your Machine Frequently

Unattended, low-traffic ATM machines are more likely to be targeted. Therefore, non-bank ATMs typically have a greater risk of being tampered with. Each time you visit your machine, run your hand over the body. Look for loose, bulky, or foreign parts. Anything unusual could indicate that your machine has been tampered with, putting your customers at risk of fraud.

Use GPS Trackers

GPS tracking is more likely to help you after the event of an attack rather than preventing one. These devices won’t be visible, so if a robber is successful, you or the police will be more likely to apprehend the culprit and recover your assets.

Invest in ATM Insurance

The only thing insurance will prevent is worry. Investing in ATM insurance can give you peace of mind knowing that you are protected financially in a worst case scenario. Having insurance will hopefully encourage you to let your assets go if you are victimized and have to fight the urge to struggle with an attacker.

Should Vaulters Be Armed?

We do not recommend that you arm yourself when loading or unloading your machine. One of the biggest problems with this is that if you do end up using your weapon, there will be more consequences and complications. There are other, safer precautions you can take to protect yourself. 

First of all, don’t vault your machine at night. This is when criminals are the most active and when there will be fewer witnesses and natural protection. Furthermore, don’t stick to a regular, predictable vaulting schedule. You don’t want to allow someone to plan a robbery.

Make sure there is surveillance. You can install your own cameras or just be sure you place your machine in line with the cameras of your location or surrounding locations. To help deter criminals, consider putting up a sign that advertises that the machine is under video surveillance.

Also, be aware of who is around when you vault. If your machine is indoors, ensure a manager or employee is around while you vault rather than disappearing to the back. You can also vault after hours to minimize the level of foot traffic while you are vulnerable. If you vault after hours, it’s best to do so away from windows or points of ingress where passersby can see your activity.

If you still feel unsure and live in a major metropolitan area, you might see if you can arrange for an armed off-duty officer to accompany you to your drops. Again, we don’t recommend that you take the law into your own hands. Smart decisions are your first line of defense.

Be Proactive Against ATM Robbery

This information about ATM robbery isn’t meant to scare you. On the contrary, it’s meant to empower you. The more you know, the more prepared you will be and the more confident you will feel. 

Although ATM crime has risen in the past couple of years, crime, in general, has risen, so it isn’t unexpected. The number of reported incidents is still minor compared to the number of ATMs in operation, and bank ATMs are frequently targeted because larger vaults equal bigger payouts. 

In our many years of experience, we have never personally heard of an independent ATM deployer getting held up or mugged. And, being in the ATM business, that’s saying something!

Still have questions? Contact us today!

5 Advantages of Using Cash

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Are there advantages to using cash? Do most of us even carry cash anymore? With cryptocurrency, online shopping, debit and credit cards, Apple and Google pay, PayPal, and other money transfer apps, do we really even need cash anymore?

Technology is nice, but what happens when it doesn’t work? Have you ever tried to order food at a restaurant just to be told that their point-of-sales (POS) system is down? Have you ever tried to use a money transfer app to send or receive money just to run into verification obstacles, long wait times, or extra fees? 

For these reasons and more, cash will have a special place in our hearts (even if it isn’t always in our wallets) for a long time. It’s reliable, it’s convenient, and it’s a 3,000 year tradition.

Is the ATM Business Dying?

As long as people need cash, they will need ATM machines. Although cash payments decline as electronic payment methods increase and improve, there is currently more cash in circulation than ever. 

Cash is traditional. It’s familiar. Comfortable. So for a long time yet, there will be people who prefer cash. Could you even imagine what would happen if cash was taken out of circulation? Many people would protest that choice being taken away from them. So we don’t see that happening in our lifetime.

Even so, ATM machines are versatile. They have already evolved to facilitate the cryptocurrency craze. So there’s no reason to believe that the ATM business would be dying anytime soon.

Furthermore, federal law prohibits businesses from going cashless. While state mandates might vary, it’s generally accepted that cash is the most widely accessible form of payment in addition to the other advantages of using cash. 

The Payment Choice Act

The Payment Choice Act (2021-2022) refers to the bill that states that retail businesses do have to accept cash payments. It also prohibits them from charging cash-paying customers more. The goal is to prevent discrimination and keep consumerism fair. 

Without the ability to pay with cash, low-income and other unbanked individuals would be unfairly excluded from locations that would prefer not to accept cash payments. However, as you will see, in most cases, cash payments actually benefit retail businesses. The advantages of using cash on top of the federal law further solidify the role of cash in our society.

5 Advantages of Using Cash

1. Quick

In many cases, cash payments are quicker than electronic ones. Cash payments don’t decline. The POS system doesn’t have to communicate with your bank to release the funds. And when that POS system goes down, you’d better believe you’ll be wishing you had some cash on you. 

Cash is also often more convenient than electronic payment methods. You don’t have to worry about accidentally overdrawing your account and accruing exorbitant bank fees when you pay with cash. 

And if someone needs to pay you for something, cash payments are immediate. You don’t have to download a new app, figure out how to be “added” as someone’s contact, fight with authentication procedures, worry about payments being sent to the wrong person, be restricted by sending limits, wait days for the money to hit your account, or pay any transfer fees.

With cash, once it hits your hands, it’s yours. 

2. Tangible

Cash is tangible, an old-fashioned favorite. Bills can be broken into smaller bills and even coins. Many of us learned to count using bills and coins, and many children still do. Physical money is an important educational tool for children when it comes to counting and budgeting. 

Cash is a useful budgeting tool as evidenced by the envelope method touted by financial guru Dave Ramsey. By physically dedicating a set amount of cash to various categories of your spending habits, it’s much easier to be frugal and disciplined with your money—once it’s gone, it’s gone. 

Don’t payments hurt just a little bit more when you can see and feel the money leaving your side? Electronic stashes are often out of sight and out of mind (and sometimes out of control if you aren’t careful with your credit cards…). Some people also feel safer having tangible money in their possession where they can keep an eye on it and protect it.

3. Private

Cash payments are private. They are difficult to track, and, excepting disposable paper receipts, they leave no paper trail. Sketchy business practices aside, this privacy also serves as a security measure. 

No one can electronically hack into your wallet or safe. Your financial information can’t be compromised in a data breach if you use cash payments at most stores and avoid online shopping. And if you minimize the number of debit and credit cards you carry, you in turn minimize your risk of identity theft. 

4. Universal

Cash is also the most widely accessible payment method. Everyone has access to cash. And it’s a good thing, too.

About 6% of Americans are unbanked, with no bank account, and another 16% are underbanked, meaning they only have a checking account and maybe a savings account. There are many reasons why someone might be unbanked or underbanked.

First, low-income individuals might not make enough money to warrant a bank account. This is especially true when bank accounts charge monthly service fees or impose minimum balance requirements. And what about the homeless man at the intersection? Does he take debit or credit? 

Other people might be distrustful of banks, especially under the threat of national and economic crises. Covid-19, for example, caused more cash to be in circulation than ever. Others still might just not want to deal with bank regulations and restrictions. 

Minors are also unbanked. We pay our children for doing extra chores. We use cash to pay our neighbor to mow our lawn. Our kids receive cash in their birthday cards. They keep it safe in a piggy bank. These are traditions that are still going strong.

5. Necessary

Finally, cash is necessary for cash-only businesses. Many small businesses are cash-only to save money on credit card processing fees and to make bookkeeping simpler. 

The cannabis industry is also often cash-only by necessity. Although legal in many states, whether medicinal or recreational, marijuana is still illegal on a federal level. Therefore, few banks will work with cannabis businesses due to the threat of breaking money laundering laws. 

Even if cannabis businesses find banks willing to work with them, it can be quite expensive for them to maintain those accounts. This is because it costs the banks more to service them due to anti-money laundering software, external auditors, and legal counsel.

Cash tipping is also common in many industries like beauty salons, bars, and restaurants. Many businesses, like Starbucks, only accept cash tips if they aren’t able to apply them to a debit or credit charge. You will see little bowls or buckets on the counters of places like these where customers can leave a cash tip. Businesses that are able to apply a tip to a debit or credit charge will sometimes still place a cash tip receptacle in customer view because the visual reminder (Dare we say peer pressure?) encourages more tips.  

Other times, customers want to make sure that their servers receive the full amount of a cash tip whereas electronic tips are subject to tip sharing and other deductions. And how else do you tip your concierge when you travel? The entertainment at your local bar? Your favorite street performer?

Cash is King

As you can see, cash plays a very important role in our society. There are many advantages of using cash. No other payment option is as secure, convenient, reliable, or universal. That’s good news for the ATM industry. As far as we are concerned, cash is here to stay, and so is the ATM industry. Ready to start your own ATM business? Where there is a need for cash, there is an opportunity for you to make some passive income. Get started today!