How to Complete Your ATM Business Basic Checklist

by

This ATM business basic checklist is for you to use as you go through the process of operating an ATM machine. If you’re looking for more of a step-by-step guide, check out our article How to Start an ATM Business in 5 Steps. 

However, if you are looking for a list of what needs to be done, this is it. Once you have completed each item in this ATM business basic checklist, you will officially be in business. You can’t neglect any of these items if you want to start operating your own ATM machines!

1. How to Find a Processor

What is ATM Processing?

You need to work with an ATM processing company so that your ATM machine can communicate with your customers’ banks. An ATM processor identifies the network of each card inserted into your ATM machine, routes the information to the user’s bank, verifies the funds, then receives approval from the bank to dispense the withdrawal amount up to what’s available in the account. Check out our video here for more information.

Factors to Consider

Although ATM processing is pretty basic, there are a number of factors to consider when choosing an ATM processing company. It is in your best interest to research a variety of companies to find the one that is going to best suit your business needs and transaction volume.

Now, if you’re just getting started, you might not know your transaction volume yet. But your processor might. Find an experienced company that will be able to assist you throughout your entire career as an ATM owner. 

Experience

An experienced company will be able to give you advice regarding the location you choose (keep reading this ATM business basic checklist for more information on choosing a location) as well as how much you can expect to make from that location or from alternative locations.

Support

You also want to work with an ATM processing company that wants you to make money. A company that acts as a business partner will offer you support throughout your entire career, not just during the initial setup. The company should offer training, ongoing support, and dependable support (meaning they answer the phone when you call…).

Other Services

Finally, you want to know what additional services the company provides. Not all ATM machines work with all processing companies, so if you choose a processor before your equipment, you might want to know if they also sell equipment. Because they will only sell machines that they can support.

If you purchase your equipment before choosing a processing company, you will have to make sure the company can support it. (More on deciding machine type next.) And you can switch processors after you are already in operation. Your needs might change, or you might not get the service you expect from your current processing company. In these cases, you will need to switch to a company that can support the machines you already have. 

Other services you might want to consider are vaulting, remote monitoring, and automated payments. This business is all about building passive income. So you want to minimize your workload as much as possible.

You can load your ATM machine (vaulting) yourself to make as much profit as you can. But if this isn’t convenient for you, your ATM processing company might offer this service. 

Remote monitoring allows you to track your machine’s activity and cash availability which makes it easier for you to keep it stocked and minimize downtime. And automated payments prevent you from having to spend time making transfers yourself and constantly online banking. The less time you spend managing your ATM, the more passive income you make.

When looking for an ATM processor, look for a business partner. Find out more about how to choose an ATM processor here.

2. How to Decide on Your Machine Type

You have lots of options when it comes to choosing ATM equipment. If you’ve already chosen an ATM processing company to work with, you will have to narrow your search to machines the company can support. If the company sells machines, this might be the simplest item on this ATM business basic checklist!

Machine Type

First, you need to decide if you want a freestanding machine, a through-the-wall (TTW) machine, or a wall mount machine. The three most important factors to consider when it comes to machine type are cost, space, and security.

TTW machines are the largest of the three types and therefore cost a little more. However, they are more secure because the vault extends into another room that can be secured during regular operation and vaulting. Unfortunately, they require a lot of space and some construction work to allow the machine to fit into the wall if the space doesn’t already exist.

Freestanding machines are smaller than TTW and are therefore a little cheaper. You also have more flexibility with the placement of a freestanding machine. Likely, a majority of the ATM machines you see day to day are freestanding.

Wall mount machines are the smallest of the three types. They are also the cheapest, but they don’t hold as much cash. Wall mount machines are a good option for slower locations. Despite the name, this type can be mounted to a countertop as well which makes them easy and convenient to place; they don’t take up a lot of space.

Manufacturers

Some of the biggest names in ATM equipment are Hyosung, Genmega, Hantle, and Triton. All are reputable companies that have been in the business for a long time and are known for producing quality equipment. 

Check out our ATM Buyers Guide for more guidance on choosing the ATM equipment that’s best for your business. We also compare Hyosung and Genmega, the two top of the line ATM manufacturers.

New vs. Refurbished

Finally, you have to weigh the pros and cons of a new vs. refurbished machine. It really comes down to your budget, your experience, and machine availability. 

We recommend starting with a new ATM machine at least for your first one. Newer models come with improved features and advanced technology making them easier to operate.

However, refurbished ATMs are also good options. It just depends on what is available and the quality of the refurbishment. If you have your heart set on a specific manufacturer or model, you might not be able to easily find what you’re looking for; you will more likely have to choose from what’s available. 

Most importantly, make sure you purchase certified refurbished if you choose to go this route. This guarantees that the machine has had standards checks, detailing, and upgrades applied.

3. How to Place Your ATM

If you own your own store, you can go ahead and mark this off of your ATM business basic checklist! If you plan to place your machine in someone else’s business or store, consider these factors:

  • Foot traffic
  • Proximity to other ATMs
  • Proximity to you
  • Liquor license

The busier the location is, the better the location’s reviews are, the more people that pass by it every day, the better your ATM is going to perform. People can’t use your machine if they don’t pass by it or see it, so you want to get as many eyes on your machine as possible.

You also want to corner the market. You will get more users the farther away your machine is from other machines. This way, you aren’t sharing customers; yours is the most convenient!

Remember that the goal is to build passive income. So the less time you spend managing your machine, the more you make! This is why it’s important to choose a location that’s convenient for you, too. If it’s close to the route you take often, either to and from home or work, you make more with less time and work (and gas!).

Finally, keep in mind that locations that have a liquor license are able to charge more for transactions. In our article 9 Best Locations for ATM Machines we share our experiences with ATMs in various locations. If you need help approaching location owners, check out our tips for cold calling or join ATM Depot’s Members Area for access to scripts you can use to negotiate a deal.

4. How to Decide Your Surcharge

Setting your surcharge is all about strategy. You want to strike a balance between a transaction fee that’s convenient for your users and profitable for you. If you’re just getting started, you need to make your return on investment (ROI) before you can start making a profit, so you want to do this quickly. There are two ways you can do this:

First, you can set a surcharge that is lower than the competition to increase the number of transactions your machine receives. Second, you can match the competition or set a higher surcharge to try to make more per transaction. 

However, it isn’t as simple as that. It all depends on your location, the amount of foot traffic, the demand for your service, and your proximity to other machines.

Fortunately, we have a comprehensive guide for How to Set Your ATM Surcharge. Furthermore, you can always adjust your surcharge, so don’t stress out about it too much. Trial and error will play a big role in making sure you get it just right!

Completing Your ATM Business Basic Checklist

You know what you need to do, but how do you do it? This ATM business basic checklist is just the start. That’s why choosing the right ATM processing company is so important. Because you want support from beginning to end. Whether it’s asking questions, strategizing, or filling your pockets, your ATM processor should be there every step of the way making sure that you are successful. If you have questions about choosing a processor, purchasing ATM equipment, placing your ATM, or setting your surcharge, contact us today!

ATM Business Basic Checklist via ATMDepot.com
Want to start your own ATM Business? Make sure you check off all of the items on this checklist before you get started so that you’re prepared.

7 Tips for Maximizing ATM Revenue in 2022

by

We’ve talked about maximizing ATM revenue before, but we think it bears repeating. Plus, some things have changed in the economy and the industry in recent years. So, here is a modified, modernized, fresh list of things you can do to maximize your ATM revenue this year.

What is ATM Revenue?

Your ATM revenue is the money your machine brings in. So, how many people use your ATM in a day? A month? A year? The number of transactions made multiplied by your surcharge equals your revenue. The more revenue you make, the more profit you make because that means there is more left over after you cover business expenses. Maximum revenue is good for your business, and it’s good for you!

How to Make ATM Revenue Projections

There are a couple of ways you can predict your revenue and set revenue goals. First, if your ATM machine is in a store, restaurant, or other business, you might expect an average of 200 customers to visit the establishment every day. Now, the ATM industry estimates that about 1-5% of people who see an ATM actually use it, so you can count on about 6 or so people using your machine each day.

Another way to figure revenue projections is to determine how many adult patrons the establishment sees in a day. This should equal (plus or minus 10%) the same number of ATM transactions your machine will have in a month. This number might be a little lower if the establishment accepts credit cards or offers cash back at the point of sale (POS). 

For estimation’s sake, then, say the establishment where your machine is located sees 200 patrons a day. At the higher end of the spectrum, you could expect 200 ATM transactions in a month. At the lower end of the spectrum, you might expect 20-40% less (120-160). Multiplied by an average surcharge of about $3.00, you’re looking at a range of about $360-$480 in revenue each month.

Now, these figures won’t be exact. As you can see from the following list, there are a number of factors to take into consideration when it comes to maximizing your ATM revenue. So if you are experiencing numbers lower than the projections you get from the formulas, try implementing one or more of these 7 tips.

How to Maximize ATM Revenue

1. Adjust Surcharge

One of the most obvious ways to bring in more money is to adjust the surcharge. This is, after all, where your revenue comes from. However, while raising your surcharge could bring in more revenue, it could also deter customers if it’s too high.

If you already have a relatively high surcharge (the average is about $3.00), lowering it might bring in more users. Eight transactions at $2.50 is more than 6 transactions at $3.00. So you’ll want to experiment to find the sweet spot. 

Your surcharge fee will also depend on your competition. Consider the rates of nearby ATM machines. If you can offer a lower surcharge, you might be able to corner the market. If you don’t have any competition, you might be able to increase your surcharge without compromising the number of transactions you see.

And don’t forget, if your ATM is located in an establishment with a liquor license, your surcharge could be upwards of $4.00. So the establishment where your machine is located is a factor as well.

2. Diversify Denominations

Believe it or not, not all denominations perform the same in every location. In areas where there are more high dollar withdrawal amounts, higher denominations like 20s are standard and convenient for users. However, ATMs in areas where people prefer to withdraw smaller amounts of cash at a time perform better with smaller denominations like 5s or 10s.

To change the denomination(s) your machine dispenses, speak with your ATM processor. They will need to set you up with the right cassette and programming to make it happen.

3. Advertise

People cannot use your machine if they don’t know it exists. Therefore, advertising is key. There are a number of simple things you can do that won’t cost you a thing.

First of all, make passersby aware that your ATM is nearby even before they enter the establishment. Consider putting up a sign in the window for some cheap, easy advertising. Make your own sign for free, or purchase one depending on your needs and the preference of the location owner.

Second, advertise your ATM on the establishment’s website or on Google Maps. Make sure that people who are researching the establishment online or are looking specifically for an ATM machine know that there is one at that location.

Third, make sure the machine can be seen by patrons of the establishment. Is it in plain sight with no shelves or corners hiding it? Are there zero obstructions, making it easy to get to? Is the area well-lit? These are all factors to consider when it comes to drawing in more users, and the best part is that they can easily be adjusted without spending any extra money.

Now, if you do find that you need to do a little more, you might want to put some money into your advertising. You can purchase a topper for your ATM machine that helps make it more visible. You can even get one that can display messages and graphics to add to its appeal. Use LED signs and lights with bright colors to catch customers’ attention.

4. Offer Incentives

Your ATM might have the ability to print coupons on the ATM receipt paper. This is a great way to encourage repeat business. Gas discount coupons work well for gas stations. Car wash coupons, BOGO offers, and free drink with purchase are other good ideas. Customers are more likely to use an ATM if they get a bonus or extra benefit.

5. Update and Upgrade

Customers might not feel comfortable using your machine if it looks old, run-down, and out-of-order or likely to malfunction. If you are looking for ways to maximize your ATM revenue, we’re sure this isn’t the state of your machine. But customers might not know that just by looking at it. 

Make sure the area around the machine is clean, the machine itself is clean, the decals are new and not peeling, and your machine is fully stocked and functioning during all hours of operation. The less downtime your machine experiences, the more opportunities you open to transactions.

Your machine might look great! But certain upgrades can make your machine stand out from the competition. Earlier we mentioned using LED lights, topper, and graphics to help advertise your machine, but these features can also make your machine look more inviting if it’s already in a conspicuous area.

As long as you ensure your software is updated, then you minimize the downtime of your ATM and speed up transactions. This keeps users coming back. Upgrades are a nice touch if you find that you need them. 

6. Change Locations

You might want to experiment with the placement of your machine as well. Place the machine near the door where patrons have two opportunities to pass by it (coming and going). Or near the cash register where almost every patron is sure to stop and probably need cash. You might also consider placing it near a particularly popular aisle where more people are likely to spot it. Be strategic.

If your machine can be hooked up outside, you might want to consider this as well. This opens business up to passersby who never intended to enter the establishment in the first place. It’s also quite obviously visible this way, and if the establishment isn’t open 24/7, you open your machine up to more transaction opportunities by extending its hours of operation.

Finally, if all else fails and you aren’t seeing the numbers you want to, it might be a matter of slow business or foot traffic to the location. If you aren’t seeing at least 200 patrons in a day/transactions in a month, you might consider looking for a busier, more profitable location.

7. Scale Your Business

Now, if your machine is doing as well as you could hope, but you still want to bring in more revenue, it might be time to scale. This could mean adding another ATM machine or two (or ten!) to your route, or it could mean branching out into the Bitcoin ATM business. 

Cryptocurrency is rising in popularity. If you live in an area with a heavy population of crypto users, it might be worth it to give it a shot. Bitcoin ATMs (BTMs) allow users to purchase bitcoin with cash or debit card, and they can sell bitcoin for cash as well. Adding a BTM to your route would provide an additional source of revenue.

Maximize ATM Revenue in 2022

There is no shortage of opportunities when it comes to the ATM business. If one strategy doesn’t work, it doesn’t take much effort to try another! That’s the beauty of passive income. 

Unfortunately, we don’t have the perfect recipe for your success. It will require some trial and error. That’s because no two ATM businesses look the same. There are so many factors to consider, but that also means that there are many possibilities to explore. Find what works for you and your personal revenue goals this year.

Do Businesses Have to Accept Cash? The Payment Choice Act and Other Arguments in Favor of Cash

by

Do businesses have to accept cash? Yes and no. While there is no federal law prohibiting businesses from going cashless, state mandates might. So, it depends on where you do business and what the situation is.

More and more businesses have been encouraging cashless payments since the onset of Covid-19 for health and safety reasons, speedier transaction times during the labor shortage, and combating the national coin shortage. However, the Payment Choice Act addresses the downside of businesses going cashless.

Although digital payments have their benefits, cash is still not going away any time soon. Businesses and consumers alike still have a number of reasons to prefer cash payments, or at least to want the option.

Why Cash is Good for Businesses

While it’s true that contactless and digital payments simplify the transaction process for businesses, there is no need to worry that they will take the place of cash exclusively. Not all businesses will transition to cashless. This is because cash still offers a number of benefits.

No Fees

First of all, there are no fees associated with cash transactions. Businesses are charged a percentage of all transactions they process via credit card networks. So you will frequently see businesses that are cash-only or that have an ATM on-site or nearby. These businesses want to encourage cash transactions because they save money on credit card processing fees that way. Not to mention the money they make from ATM surcharges.

Additionally, the more cash transactions businesses conduct, the fewer chargebacks they’ll have to deal with. Businesses face chargeback fees when consumers file a claim with their banks or credit card companies for services and products they purchase with their cards. In some cases, these transactions get reversed and those businesses lose the value of those sales and incur fees.

Cash allows businesses to pay their bills faster, especially small businesses. Cash payments are immediate. Long processing times associated with other payment forms could cause avoidable late fees.

Flexibility

Secondly, cash allows more flexibility when it comes to growth and expansion. If a company wants to acquire another, it might not be able to without the necessary cash. Furthermore, if a business has cash available, it is better able to take advantage of expansion opportunities that otherwise would not be possible without taking out loans. 

Emergencies

Cash is also important for emergency situations and unexpected expenses that aren’t already accounted for in a company’s budget. One of these emergency situations could be an economic downturn. The availability of cash improves a business’s flexibility and therefore its ability to survive.

Cash Flow

Finally, businesses need cash flow. For a company to survive, cash flow is the number one financial factor. High revenue and income do not guarantee cash flow. Without efficient financial operations, companies can experience negative cash flow.

Why Cash is Good for Consumers

Not only do consumers benefit from cash, but for some Americans, that is the only payment option available to them. Cash is universal. It is steady, stable, and secure. Fortunately, it’s here to stay.

Eighty-eight percent of consumers use cash at least sometimes. “There is this surprising resiliency of cash. It keeps hanging around,” says Shelle Santana, assistant professor at Harvard Business School. While contactless and electronic payment methods have their place, they can’t compete with the benefits of cash.

Universal

Cash is a universal payment form available to everyone regardless of income level or age. About 6% of Americans are unbanked and another 16% are underbanked. Ten percent of consumers reported using cash for all of their purchases. Businesses that are cashless exclude these populations. This is a concern the Payment Choice Act aims to solve. 

Convenient

Cash is convenient (especially when electronic processing systems fail). It’s quicker and easier to use cash for low-ticket items. Some businesses impose credit card minimums and/or pass their credit card processing fees onto their customers. This makes paying with cash cheaper as well.

According to a survey by a division of WSFS Bank, 39% of U.S. businesses have a cash-only policy for purchases under $20. Two in every five U.S. consumers (40%) prefer to use cash especially for tipping, ordering fast food, purchasing candy and snacks, buying coffee, and paying for gas. 

Cash allows people to exchange funds immediately. People can pay friends and family for favors and services using cash without having to wait for processing times or transfer issues. According to the 2018 Health of Cash Study sponsored by Cardtronics, 70% of people surveyed prefer using cash to pay money owed to family and friends while 65% prefer receiving cash when owed money.

Cash is also often used as monetary gifts for birthdays, special occasions, and especially children too young for bank accounts.

Safe

Cash is safe. Consumers who carry small amounts of cash aren’t at risk of losing much. Cards that access larger sums of money can get lost, stolen, or hacked.

Cash can be used at an early age to teach financial responsibility. It also helps over 61% of Americans stay within their budgets. Like businesses, consumers experience emergencies and unplanned events. Having a cash savings can be a lifesaver for those situations that are difficult to predict and budget for.

The Power of Choice

Obviously, card transactions, bank transfers, and other money transfer services take time to process and are often accompanied by fees. Debit card transactions can overdraw a bank account, credit cards charge interest and rack up debt, and both banks and credit card companies have their lists of various annual, setup, and/or service fees. This is part of the reason why a percentage of the population literally cannot afford to have a debit or credit card. 

But what’s more important than the value of each individual payment method is the freedom of choice. About 92% of consumers like having a variety of payment methods. More than 90% of households reported using more than one payment method, and the average consumer uses 3.6 payment methods each month.

The Payment Choice Act

The goal of the Payment Choice Act is to provide equality among Americans, allowing everyone to purchase goods and services without discrimination.

The bill stipulates that businesses not eliminate cash as a payment option. The bill would require that businesses accept cash payments for goods and services. The proposed bill prohibits businesses from posting signs that state that they don’t accept cash and from charging cash-paying customers more. 

Do Businesses Have to Accept Cash in Your Opinion?

In your opinion, do businesses have to accept cash? There is debate between the right of businesses to choose what payment methods to accept and the right of consumers to choose the payment method that best suits them. 

No matter which side you take, cash is here to stay. And so are ATMs. Although ATM withdrawals are declining in number, they are increasing in value. So the need for cash hasn’t changed; the demand is the same regardless. What has changed is consumers’ willingness to travel to an ATM. If you are in the ATM business or are interested in getting started, this is good news. This means that with more ATMs placed around the country, accessing cash becomes less of a hassle. And for a majority of the population, cash is still very relevant.

Why Cash is Still King - 2022 via ATMDepot.com

How to Set SMART Goals for Your ATM Business

by

Have you heard of SMART goals? It’s no secret that goal-setting is a tried and true method of making sure stuff gets done. But if you’ve set goals before without success, you might have missed some key steps.

Setting goals for your ATM business is a good way to make sure you are successful. You might need to set goals to help get your business started to begin with. Or maybe you need to set some goals to increase profits. Or maybe you want to set some goals to help you balance your ATM business better among your other jobs and your personal life.

Whatever the case may be, SMART goals are a good place to start. We’ll show you how.

What Are SMART Goals?

SMART goals are specifically designed to help you actually achieve what you set out to do. Rather than just jotting down some items on a to-do list without any accountability, SMART goals allow you to monitor your progress toward a big-picture goal. 

SMART stands for Specific, Measurable, Achievable, Relevant, and Timely. By making sure your business goals fit these categories, you set yourself up for success by ensuring that you have a plan to actually accomplish them. Let’s take a look at some examples of SMART goals you can set for your ATM business.

How to Set SMART Goals

How to set SMART goals is already outlined in the acronym. Think of a goal and make sure it fits all five categories. If it doesn’t, then tweak it until it does. We’ll start with a basic example—increase profit—and see how it can be turned into a SMART goal.

Specific

First, your goal needs to be specific. “Increase profit” is a good start, but it would be even better to assign a number to it. If you make just one penny more, technically you will meet this goal. But is that really what you mean when you say you want to increase profit?

Take a look at how much you have already been making. Then, decide how much more you’d like to make. Give yourself a specific number to reach. Track it along the way to make sure you are on track to meeting this milestone.

Measurable

Once you make your goal more specific—increase profit by X% or increase profit to $X—you need to make sure it is measurable. Because, like we mentioned before, you want to be able to track your progress toward reaching your goal. And you want it to be clear at the end whether or not you succeeded.

Assigning a dollar amount or percent to the “increase profit” example not only makes the goal more specific, but it also ensures that your goal is measurable. Percents and dollars can be calculated. You can do some accounting at the end of the quarter or the end of the year to see if you have increased profit from last quarter.

By setting a measurable goal, you are able to keep it on the forefront of your mind. You can create a chart or graph to visibly display your progress toward your goal. Don’t blindly wait around until accounting time to see if you magically made more money. 

Measuring and tracking progress makes working to achieve your goal a constant activity and therefore increases the chances that you will actually succeed. If you are actively measuring and tracking your progress toward your goal, you can make adjustments along the way if the numbers start going the wrong direction or plateau.

Achievable

This one is tricky because you have to find a balance between shooting for the stars and grounding yourself in reality. You don’t want to set yourself up for failure by setting a goal that is completely out of reach, unrealistic, or unachievable. On the other hand, we want to encourage you to set high goals for yourself and to believe that you can and will achieve them.

So let’s look at our example. Increasing your profit by 10% or by $1,000 are examples of achievable goals. These numbers are realistic, and reaching them will have an obvious effect on your business, your income, your lifestyle, etc. 

Earning a million dollars, for example, is not realistic. If you’re in the ATM business, you know you aren’t doing it to get rich. So you aren’t selling yourself short by lowering your goal from a million dollars because this business isn’t designed to earn you that much. It has nothing to do with your abilities, passion, drive. Just keep that balance in mind as you set your SMART goals.

Relevant

Next, you want to make sure your goal is relevant. This means that whatever goals you set for your business should align with the goals you set for yourself, your family, and your personal life. If your goal is to increase profit by $1,000, but to do so means placing an additional ATM machine, then you have to consider whether the time it will take you to maintain that ATM machine will cut into other important obligations.

Say you want to increase profits. So you place an additional ATM machine. But now you have to add a few hours a week to your route. Normally you would be spending that time at home with your family. Is that business goal still relevant? 

If not, adjust it! Maybe lower the profit goal to a number that could be reached by adjusting the surcharge or advertising the machine. That way you can still reach your goal, make more profit, and stay on track with the other areas of your life.

Timely

Finally, you want to set a time frame. Without it, you could be working blindly day in and day out without ever knowing for sure if you were making good progress toward your goal. 

A time frame holds you accountable. And if you’re measuring or tracking your progress, you can see how what you are doing in your business now is affecting the trajectory of your business toward reaching your goal. 

This also plays a part in making sure your goal is achievable. Increasing your profit by next year is an example of an achievable time frame. Increasing your profit by 10% by next week is a little unreasonable. It doesn’t give you enough time to measure the actions you are taking and the changes you are making to ensure that your efforts continue to move you forward.

But the bottom line is to make sure you set a goal that can realistically be achieved in the amount of time you determine. 

Why SMART Goals?

You can make a list of goals all day long. And if you’re really focused and motivated, you can accomplish them. But the best way to make sure you are productive is to set SMART goals. 

SMART goals are ideal because they are designed to be achieved. They clearly state what it is you’d like to do and force you to create a plan to get it done. For example, your goals should be measurable, but then you have to assume the task of measuring your progress. Your goals should be timely, so you need to pick a timeframe and stick to it. If you are ready to step up your ATM game, try setting SMART goals to see just how successful you can be. Need help? Contact us today to see how ATMDepot can help you reach your goals!

The Future of Cash: Is the ATM Business Dying?

by

Is the ATM business dying? The short answer: No. As long as there is cash, there will be ATM machines. 

Not only is cash not going away anytime soon, cash is the most widely accessible payment form. ATMs are needed to keep it that way. Digital payment systems have their place, but so does cash. People love to have options. And they don’t react positively when their choices are taken away.

Cash has been around for about 3,000 years. It won’t disappear overnight. There is actually more currency in circulation now than ever before because of the uncertainty caused by Covid-19 the past year.

Although cash payments may be declining, ATM machines can adapt (and already have been) to an increasingly digital society. So as the needs of the consumer evolve, so too will ATM machines. And you’ll want to be there when they do. 

Digital Payment Systems

There are many alternatives to cash payments. Obviously there is the option to pay with a debit or credit card. You have Automatic Clearing House (ACH) payments directly from a bank account. Your employer likely pays you via direct deposit. 

There are services like PayPal that allow you to make purchases online without even having to enter your payment information each time. Many apps like CashApp, Venmo, and Zelle have been developed to transfer small amounts of money between friends and family when cash isn’t readily accessible. And of course you’ve surely heard the buzz about cryptocurrency.

With all of these payment options, where does cash fit in? It’s enough to make you wonder, Is the ATM business dying?

But cash, like digital payment systems, has its benefits and disadvantages. That’s why we need them both: to keep our options open. 

Drawbacks of Digital Payment Systems

Digital payment systems definitely have their place. They’re efficient and flexible. It’s the only way ecommerce works. You can pay for goods and services with the click of a button. However, there are some drawbacks.

First, it’s risky. Card numbers can be compromised, crypto wallets can be hacked. Digital transactions aren’t tangible, so it’s not easy to keep track of. However, your digital transactions aren’t untraceable.

There is proof of your purchases on receipts, in your email, on your bank statement. Your bank accounts and crypto wallets have your name on them and other personal information attached. This increases the risk of identity theft.

Second, cryptocurrency is extremely volatile right now. There is a lot to learn, and although it isn’t going anywhere, no one is sure what its future looks like. Furthermore, most cryptocurrencies aren’t federally backed, which adds to its risk.

Third, digital payment systems contribute to the digital divide. The digital divide refers to the inaccessibility of the Internet for a certain portion of the population. Not everyone has access to reliable Internet, and not everyone who does have access has the literacy necessary to manage finances digitally. This is a huge disadvantage for those in rural areas, low-income households, and the elderly.

Additionally, mobile payments require the use of a smartphone. Only 85% of Americans own a smartphone. While that may seem like a lot, and it is, 15% is also a lot when you think about the thousands of people for whom mobile payments, online banking apps, and constant access to the Internet aren’t an option. 

So while there are some benefits to digital payment systems, they aren’t perfect, and they exclude certain demographics.

Benefits of Cash

It’s anonymous, it’s stable, and it’s accepted pretty much anywhere (and by anyone).

Quick

There are many obvious benefits to cash. First of all, it’s immediate. When you pay with cash, the recipient doesn’t have to wait for a transaction to process, they don’t have to bother with insufficient funds, and you don’t have to worry about overdrawing your account or accruing interest on a credit card transaction. The money is paid. That’s it. It’s done.

Physical

Second, cash is physical. It hurts just a little bit more when you pay for something with cash because you can see and feel the money leaving your side. This can help you be more conscious of your spending habits. It also makes it easier for you to keep track of. You don’t have to worry about hackers getting access to your stash remotely.

Accessible

Third, it’s accessible. Everyone—rich or poor, young or old—has access to cash. You don’t have to be tech savvy or connected to the Internet to manage your cash. According to a Pew Research Center survey conducted earlier this year, that’s good news for the 7% of U.S. adults who don’t use the Internet.

As long as there are unbanked and underbanked people, there will be cash. About 6% of Americans are unbanked while 16% are underbanked. Unbanked people do not have a banking relationship. They either don’t have enough money to bother with an account, can’t keep up with the fees, or just don’t trust banks.

Without a bank account, these people must rely on alternative financial products and services (payday loans, check cashing services, prepaid cards, etc.). They are able to purchase prepaid cards and use them at ATMs without the fear of incurring an overdraft fee if the funds aren’t available.

Underbanked Americans might have a checking and/or savings account but might also rely on alternative financial services. The FDIC’s 2019 How America Banks survey found that 95% (124 million) of U.S. households have at least one bank account. 

That is both the highest number and percent since the survey was first conducted in 2009. That’s good news for cash and ATMs. 

Private

Finally, there is a certain degree of privacy with cash payments. Average cash transactions can’t be tracked, and aside from a paper receipt that can easily be discarded, there is no paper or digital trail. We won’t go into all of the hypothetical scenarios where this might be useful, but many people still value their privacy especially since there is so little of it online.

It is better, easier, and safer to use cash for purchases under $20 to minimize the risk of identity theft.

The Payment Choice Act of 2021

There are some businesses that have chosen to go cashless. However, to keep this from becoming a trend and excluding those who only have access to cash, Congress passed the Payment Choice Act of 2021.

This Act prohibits retail businesses that accept in-person payments from refusing cash. This protects the consumer’s right to use cash at retail businesses.

On the other hand, there are many businesses that encourage cash payments because they are charged fees for every credit card transaction they process. Cash payments also decrease their rate of chargeback fees which saves businesses money as well.

The Future of ATM Machines

Although cash payments are decreasing, it isn’t because cash isn’t valuable. It’s just because there are so many more options. There is more currency in circulation than ever before.

The current environment in light of Covid-19 has made ATM machines more necessary than ever. Banks are limiting traffic in their lobbies to keep up with social distancing protocols and for the overall health of their customers. ATMs allow customers to access their accounts with limited personal interaction, which is appreciated by more and more people these days.

ATMs serve other purposes, too. They not only allow users to make deposits and withdrawals, they also provide business owners with other marketing opportunities. Offering ATM access in their stores increases foot traffic, impulse purchases, and overall business.

ATMs can be fitted with toppers to run ads, screens are getting bigger to accommodate advertising, and coupons can be printed on receipts to encourage future purchases.

ATMs are also starting to feature Bitcoin capabilities. So if you get into the ATM business now, there’s no telling what opportunities lie ahead. Your business will be able to grow with the times if cryptocurrency is something you are interested in.

Is the ATM Business Dying?

Although there are many digital payment options available, cash is still a winning option for a number of reasons. Cash payments are decreasing, but that’s just because more and more transactions are happening online. It doesn’t mean those are the only transactions happening. 

In order for cash to be completely eliminated, it would have to be by government decree. Since the government easily collects taxes on currency, it isn’t likely that a decree like this will happen anytime soon.

So to answer the burning question, “Is the ATM business dying,” we can confidently say, “No.” Cash still plays a very important role in our society. Therefore, there is still a need for ATMs. There might even be more need now as people shift from in-person bank business due to Covid-19 precautions.

Even IF cash is phased out completely, it won’t happen in our lifetime. Therefore, you are safe to invest in ATM machines and start making passive income!