ATM Machines, A Buyer’s Guide (part 3)

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A Buyer’s Guide (Part 3)

ATM Machine Buyers Guide image of Cash

If you’ve read part 2 of the [intlink id=”2013″ type=”post”]ATM Machines, A Buyers Guide[/intlink], you’re ready for part 3. Now you know if you want an automatic teller machine at your place of business or if you want to own and operate ATM machines as a business.

Let’s say you own a local brick and mortar business, but you don’t want to purchase the machine outright, you basically have three alternatives: leasing the ATM or arranging payments over time, opting for a free ATM placement program, or partnering in an ATM co-op program.

First, Leasing: Hardly anyone leases an ATM anymore. Most sales reps that try to lease ATM’s are looking for big commissions. It’s difficult to get a lease on a $2500 piece of equipment so they have to jack the price way up to get a leasing company to even consider it and then you’re paying them big commissions. It’s actually easier, cheaper and better to pay for the ATM with a credit card or to ask your bank for an equipment loan to include other equipment you may need in your business and to include the price of the ATM in the loan

First, if you really want to lease an ATM, (I’d like to talk you out of it) but you may need to search the Internet (or the yellow pages) for leasing companies located reasonably close to your business or get a recommendation from the vendor. Try sampling a few such companies to find the most favorable leasing terms – each company’s agreement will be different to some extent, but most leases go 5 years. First, and most importantly, you want to figure out who’s offering the lowest cost for a lease. Also, who determines how much your customers will have to pay in ATM fees to make your lease payment each month so you don’t have negative cash flow. Leasing companies will rarely over fund the equipment lease to give you extra cash to fill the ATM. Some business owners think this is a great idea, but the cost of that extra cash is very high and not worthwhile.

You should also compare the economics of leasing versus buying to be absolutely sure that you’d prefer to lease. Specifically, you should weigh the following factors:

  • If you’re planning on leasing a machine for a long time it would save you a lot of money in the long run just to purchase one.
  • If you can take out a loan at your bank verses leasing, that is the next best option instead.
    • Note that some vendors offer short term funding options such as 60 or 90 days. Since most ATM’s these days are typically under $2400 most business owners pay cash or use a credit card, however, we have seen deals where a merchant is able to put 50% down on a credit card and float the balance for 30 days.
  • Would buying an ATM allow you a substantial tax deduction – or could you get more tax deduction mileage out of deducting the annual costs of leasing an ATM?
  • Does it seem as though you’d stand to make a lot of money from ATM surcharge fees? If so, then owning an ATM might be the more lucrative proposition.

Second, Free Placement Programs: The next option for you as a business owner may be to consider entering into a free ATM placement program. If you’ve never heard of this option, you should know that free ATM programs have been around for a long time. What you have to do is find either a local or national ATM vendor that runs such a program and fill out an application.

Free placement programs typically require  that your business needs to be attracting a certain number of customers each day in order for you to earn acceptance. If you’re accepted, the vendor will ship an ATM to your business, install it, maintain it and service it as needed. Some free programs even take care of restocking the cash in the cash dispenser for you. In addition, you may qualify to receive some portion of the surcharges that the ATM collects, which the vendor will send you either through direct deposit or in the form of a check.

All in all, a free program is, no doubt, the easiest way for business owners to obtain an ATM. However, the profit potential from such a system, obviously, is much lower. Note, too, that companies offering free placement ATM’s will require a substantial amount of information about you and your business (they will even be delving into your bank account figures) before they approve you for such a program. While the free placement program sounds great, it takes the longest to get approved and returns the least amount of profit.  The pros are that you don’t have to deal with the ATM machine at all.  It may be easier to get approved from a small local company verses a large national company if you can find such a local entrepreneur willing to take on your business as part of their ATM portfolio.

Third, Co-Op Program: The last option to consider and a bit newer, is to enter into an ATM co-operative program. Under such an arrangement, you’d buy half the ATM and load the cash. That is, you’d be co-owner of the machine, paying for half of the upfront cost and half of all the operating and repair costs.

An ATM vendor, the other co-owner, would pay the other half of those costs. In a way, this kind of program splits the difference between owning an ATM yourself and getting a free placement or owning the ATM outright.  That is, you get a much larger share of the profits verse a free placement program would allow, but you also have more maintenance responsibilities. And, you’d get a lot less than if you owned the ATM outright yourself.

While co-op agreements, like leasing agreements, can vary widely, if you’re in such a program you’ll probably have to replace the receipt paper, load the cash as necessary and provide first line maintenance (FLM). FLM includes clearing a paper receipt jam or a cash jam. The co-op deal is more suited to a hands on business owner or manager who doesn’t necessarily have enough cash to purchase the machine outright. By the way, it’s your own cash that will go into the machine. And you’ll have to decide if you want o install any security features – a new camera or an alarm, for example or if you’ll just remove the cash from the ATM each evening like a cash register.

An extra benefit of the co-op program, however, is that the ATM vendor can figure out where to place the machine within your business, and can also provide you with helpful advice when you’re still a novice at ATM operations. That way, you can really maximize the profits you’ll get from your ATM. In some instances you can agree to a buyout over time if the vendor is in agreement.

Once you decide if you want to own the ATM or have someone else do it, it’s time to decide who is going to load the cash.  We’ll talk about that in the next ATM Machines, A Buyer’s Guide in the near future.  Have questions, [intlink id=”509″ type=”page”]contact us[/intlink].

ATM Machine Buyer’s Guide (part 2)

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ATM Machine Buyer’s Guide (Part 2) 

So by now you’ve read the ATM Machine Buyer’s Guide part 1 and you’ve figured out that you want to be in the ATM machine business. You’re confident that your place of business could benefit from an automatic teller machine. The next step, then, is to decide if you want to buy one of these machines, lease it, or enter into a free placement or co-op program. In this post, we’ll look at what you should do when you want to buy an ATM (and we’ll examine those other options in our next post).

The ATM Business Buyers Guide

At first thought, you might think that a major bank or financial institution may be willing to install one of their ATM’s inside your business. Unfortunately, however, the answer is probably ‘not likely.’ Banks rarely if ever choose to place their ATM’s into small business locations, so don’t take it personally when Bank of America rejects your application. In fact, to save time it might be wise to not even bother asking major banks.

What you need to do is find a reliable, reasonably-priced ATM equipment and processing company. First, you might consider compiling a list of licensed ATM companies in your area if you like to deal with local vendors. You can obviously use the internet to compile your list as well as ask other members of your industry if they like their ATM company. Keep in mind that many local providers are simply commissioned sales agents for a larger processing company.

Anyone presenting themselves as an ATM provider must either be registered with the International Standards of Organization, or ISO or working directly for and in cooperation with the licensed ISO (one easy way to check is ask for their ATM agreement, it should have at least one document in the package stating who the ISO is).

Once you have your list, you’ll want to start comparing their programs. Don’t just compare prices, this is rarely and apples to apples shopping comparison. First, if you are purchasing machines, there’s the price of the machine itself.  Currently there are a lot of options but a good ATM with a warranty will typically cost you around two thousand dollars, give or take a little depending on the options or upgrades you select.

Options and upgrades can include a fixed cassette or a removable cassette, an electronic lock or your standard dial tumbler, ATM illuminated toppers or plain signage. All these items make the price vary by a few hundred dollars and you may or may not need them. For instance, if you are considering operating several ATM’s or you would rather not deal with the old style tumber locks where you go left and right to open the combination, you can opt for an electronic version.

Electronic locks allow you to simply punch in a six (6) digit code of your choosing and then get access to the safe quickly.

A standard fixed cassette for example does not come out of the ATM and requires that you load the ATM in place (if you’re loading the machine during business hours, we suggest a removable cassette so you can take it some place private and load the cash).

You’ll need to consider any fees for options, upgrades, maintenance, repairs, or monthly fees when selecting the right ATM provider. Keep in mind that some, but not all, ATM providers may automatically charge or deduct service fees, statement fees, maintenance fees, or hidden fees each month. Be sure you know if and what any possible fees may be charged are when evaluating services so you can make an informed decision and not have any surprises upon start up that will change your investment returns.

You should also consider consumer service as well as prices. If inclined, contact the Better Business Bureau to see if any complaints have been filed against any of the vendors on your list, and read testimonials on objective consumer websites. If applicable, contact your friends and relatives who have ATM’s at their businesses to find out how well they regard their ATM vendor’s customer service is. You may even ask for references and if the vendor doesn’t have any or can’t provide them, that should be a red flag. Any good vendor should have plenty of customers that would be willing to give a reference.

You want to make sure that whatever ATM company you choose to do business with has a call center, preferably one that’s available 24 hours a day 365 days a year. If they do, give that call center a ring, just to see how well they treat you and how informative the representatives are when you ask them questions. If it’s possible see if you can visit the offices or even the call center of some of the vendors you’re deciding between and have a good look around.

As a business owner yourself, how impressed are you with the facilities, the staff or with the operation in general? It’s useful, too, if you can speak with someone that’s willing to offer to help you select the spot inside your business where your ATM is likely to receive the most usage.  If you’re an ATM investor and not a business owner, what experience can the vendor provide that will help you avoid costly mistakes. Does the vendor have their own ATM’s that they run locally and can they give you references to those locations?

It’s also important to consider ATM troubleshooting. Ask any vendor you might do business with what happens if your machine is stolen or damaged by vandals. What happens when you lose electricity? If your ATM breaks down, how long will it take for a technician to show up? How long does it take the vendor to order new parts should you need them? Also, your vendor’s technicians should be certified, which means – at a minimum – that they’ve successfully completed a reputable training course.

You might want to obtain a few sample contracts from a few different vendors. Read them all carefully and make comparisons, especially when it comes to hidden conditions and fees. For instance, beware of any stipulation in a contract which won’t allow you to get rid of your ATM if it’s just not working out for you. Or better yet, if you employ an attorney, have her or him examine those contracts. And a warranty that lasts at least a year is highly preferable.

Be aware that most ATM vendors are actually equipment resellers. Many larger resellers are completely reliable and great to work with. Some simply offer the equipment as an extension of the ATM processing services they offer. Purchasing an automated teller machine from a reseller is usually fine since ATM manufacture’s don’t sell direct, so every vendor is a reseller in one form or another.

You may want to ask some questions to determine the ATM resellers experience.

  • Such as, how many ATM’s the company services to get an idea how large they are?
  • How long have they been in business.
  • Who are the owners and can you Google them?

While the sales representative can tell you just about anything; which could be difficult to prove or disprove, a thorough internet search by entering the vendors name into a search engine such as Google or Bing with the words reviews or scams can usually reveal information on what others think about the company and give you an idea of how long they’ve been in business and if they are doing a good job.

Any ATM vendor that has been in business for a decade should have history on the internet. You can check the dates of reviews, articles, video’s and other periodicals you find to give you an idea if they are new in the business or have been around a while. You can even Google the name of the owner or the representative you’re talking to to find their social profiles and learn about who you are working with before you make a vendor selection.   Want to know more? Check out our new passive income book called “The Amazing Money Machine”.

ATM Network Transaction Fees

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What are ATM Network Transaction Fees?

ATM Network Transaction Fees

An ATM network transaction fee is a fee you sometimes have to pay when the automated teller machine (ATM) you’re using is not owned and operated by your bank. In other words, it’s a fee for a transaction conducted outside your bank’s network of ATM’s, hence the name. An ATM network transaction fee differs from an ATM surcharge fee in that the latter fee goes to the institution that owns an ATM, whereas the network transaction fee goes to your financial institution.

Sometimes – and this became almost a trend among banks in the 1990’s – the bank that owns a particular ATM will also charge people who aren’t their customers for using that ATM. When that’s the case, the person withdrawing the money may have to pay two fees for venturing outside the network: a network transaction fee to her own bank, and a second fee to the bank that operates the ATM.

Understandably, some customers get upset at the very notion of a network transaction fee. Why, they might wonder, must we pay fees in order to withdraw cash that belongs to us in the first place? And these fees can be especially vexing when you consider that, were you to pay them on a regular basis, they could cost you upwards of $50, maybe $100, every year. So what exactly can be done about such fees? For starters, you might consider one of the following remedies:

  • Find a bank that doesn’t charge ATM network transaction fees. (Some bank customers aren’t even aware of the fact that not every financial institution charges them.) For example, imagine you live in Australia. You’ll find that while the Bendigo Bank charges a network transaction fee, the Bank of Queensland – among others – does not.
  • Patronize a bank with an extensive network of ATM’s. If your bank has plenty of ATM’s in the areas where you live, work and visit frequently, then you won’t have to worry much about using one of their competitors’ machines.
  • If you’re in a pinch – and if you have some time to spare – actually go inside a bank and ask a teller to withdraw your money instead of using an automatic teller machine. This way, no fees are involved!

Network transaction fees can hit your wallet especially hard when you’re traveling overseas. (In fact, some world travelers will use the terms ‘ATM foreign fee’ and ‘ATM network transaction fee’ interchangeably.) That’s mainly because when you’re visiting a foreign country, the chances are that much greater that you’ll have to consistently use ATM’s outside of your bank’s network. Plus, you may be charged fees to convert currency in addition to the ATM network transaction fees.

Before you leave home, therefore, it makes sense to find out if there are any circumstances under which your bank will waive its ATM network transaction fees for its customers when they’re abroad. For example, Bank of America will not charge ATM network transaction fees in foreign nations when its customers use ATM’s belonging to banks which are part of the ‘Global ATM Alliance.’ The Global ATM Alliance is a group of banks from all over the world that have formed an agreement not to charge their customers extra ATM or debit card fees when they go to other banks within the alliance. In addition, banks often waive certain fees, including network transaction fees, for preferred customers. So if you’re a preferred customer, ask your bank if your status gets you off the hook when it comes to those fees.

If you can’t seem to find a way around ATM network transaction fees when you’re overseas, then try to at least limit the number of times that you use an ATM while you’re away. Pay with credit cards and traveler’s checks when appropriate, and carry around with you as much cash as you can.

Protecting Your ATM

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Why You Should Know About Protecting Your ATM

Protecting Your ATM

Customers know that protecting your ATM pin and the card are the most important things to know concerning their bank accounts and their money or investments. There are several scams that thieves devise to try and separate the customer from his money and the customer should always be on the lookout for anything that seems out of the ordinary or different from the norm.

Banks and ATM companies continually warn its customers to not ever give their PIN’s out to anyone. These financial institutions warn customers through mass mailings, over email and sometimes even offer tips and advice on things they can do to protect their ATM cards. Customers are also advised continuously that it’s not ever a good idea to write their PIN number down anywhere. Their advised as well to select a PIN that’s hard to decipher, one that’s not associated with anything that can easily be hiked. This includes associating it with things like an important birthdate, an anniversary date, an address or even using a consistent, traceable number that is used in other PIN numbers. For instance, some customers will often consistently use a number across the board for all of their PIN’s that they use for any important material. Therefore, if they use a number like 1234 with voice messages retrieval or for their post office box, they may also use that same number in establishing a PIN. Thieves will more than likely use that same method of thinking when they trying to determine what a PIN might be.

Protecting Your ATM – a customers pov

Customers should always be wary of any “helpful” strangers who want to help them if they experience any problems at an ATM station. These “Good Samaritans” are often a setup for customers, pretending to come to their aid while the customer is experiencing frustration with ATM problems. After the customer has entered their PIN several times, or the machine has taken the card, the customer gives up and says he’ll call the bank tomorrow. After the customer leaves, the thief retrieves the card, enters the PIN that he watched the customer enter and then takes cash out of the customer’s account. This is all done without the customer’s knowledge, and even with the customer’s assistance.

In addition to some of the tips that financial institutions give customers concerning their PIN’s and how to protect them, they also advise customers of some deceptive practices that thieves will try to use to gain access to their accounts. While the obvious signals are related to customers over and over, there are other types of scams and deceitful practices of which customers should also be aware.

In all circumstances, no matter in what condition, the customer should always shield the keypad when they’re entering their PIN’s into an ATM to protect it from anyone who may be looking. The person doesn’t necessarily need to be extremely close to the customer to see what they’re entering because the thief may also be able to tell just from watching where the person’s fingers are landing on the keypad. If the customer shield the keypad by cupping his hand over the area, any nosey onlookers would have difficulty in figuring out what numbers have been pressed.

While the vast majority of ATM business owners are honest businesspeople, there are always going to be a segment of that business population who deal unscrupulously. To that end, customers should always protect themselves by going with any instinctive feelings that may get when visiting an ATM business point. This means that if something is out of the ordinary regarding the machine, the customer should avoid using that machine and even contact the business owner for extreme cases. Customers should not use machines that instruct them to enter their PIN’s twice for no apparently good reason. This is a phishing scam that many thieves use to gain a customer’s PIN and access to their accounts.

Banks and ATM businesses warn customers that if something doesn’t look or feel right, it usually isn’t and it’s best to trust that feeling instead of ignoring it. Always contact the proper personnel in case of any errors or problems and always take measureable steps to protect your ATM and bank account from any potential issues.

 

ATM Machines, A Buyer’s Guide

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ATM Machine Buyer’s Guide (Part 1) 

ATM Machine Buyers Guide image of CashOur hope is that this ATM Machine Buyer’s Guide helps you navigate some of the known pitfalls in the business. This will be a three part series. Be sure to click the next part in the series at the bottom of each post when you’re ready to proceed.

All kinds of businesses now maintain automatic teller machines, including supermarkets and  restaurants. That’s because ATM’s offer several benefits to business owners.

When you set up an ATM inside your establishment, you may see a spike in the number of your customers. And, with that source of money at hand, some of your customers may be inclined to spend more money. In addition, you might also find that you start receiving fewer checks which means less risk at the point of sale. Of course, you’ll also end up paying fewer processing fees for credit cards as well. But what things should you know before you go out and purchase one or more of these machines?

First, do some research and a few calculations before you contact an ATM vendor. Figure out, roughly, how many people come into your business on an average day. If that number is fewer than 150, and certainly if it’s fewer than 100, getting an ATM may not have an attractive ROI, however the other benefits may be what you’re looking for.  Just because you have minimal traffic in your location doesn’t mean your ATM won’t be worth the investment.

We’ve been in the ATM business for over 2 decades now and we’ve seen over the past few years that the general rule of thumb for the number of monthly transactions that your ATM will perform is relative to the the number of people that come into your establishment plus or minus a factor of 10% – 15% depending on the location, type of establishment and several other factors.

If for example you have a high end restaurant with table cloths and a bar, your ATM machine will perform much lower than these averages since this type of clientele typically pays with a credit card. If however you have a quick service restaurant, a bar and grill, local tavern, a nightclub or even a commercial building or parking lot we have seen these types of locations do very well, especially if the business does not accept credit cards. We have also seen customers convert from credit and debit cards to ATM usage with the implementation of coupons or other incentives for use.

One of the best ways to tell if buying an ATM for your location is right for you is to speak to your customers. Ask them if they’d be interested in using an ATM if you had one at your place, or if you often get requests or if customers ask where the nearest ATM machines is, that is a good indication that it would be a wise investment.  Obviously, if you get some positive feedback from your clients, you can advance to the next step: figuring out what kind of automatic teller machine to purchase.

Free Standing Hantle Tranax 1700W ATM MachineThe most common kind of ATM is the kind that stands up on its own, also known as a “free standing ATM”.  These free standing ATM machines require approx 3 sq ft in front of them for ADA compliance (about 36″ for a wheel chair). The machines themselves have a very small foot print and run anywhere from 14″ x 14″ up to 20″ x 20″ still relatively very little floor space for the return on investment.  Even with the diminutive size of the newest free standing ATM machines, if you don’t think you have enough room, you might opt for some of the newest tabletop or counter top models.
Alternatively, you may even consider purchasing an ATM that’s inserted into a wall (also known as a Thru-the-Wall “TTW” model), although this is often a great option for a place of business to plan for during tenant improvements, it is still fairly easy to cut a hole in a wall and retrofit it for a TTW ATM. While these thru-the-wall ATM machines costs a little more than the free standing machines, they are perfect for exterior installations such as sidewalk facing locations or locations facing a parking lot or a busy downtown location.

The Amazing Money MachineThese machines typically have much higher usage since they are exposed to walk by traffic 24 hours a day. If you are considering a TTW ATM, you’ll still need to consider space for the inside part of the ATM which is typically less than a free standing ATM since the ADA portion of the ATM is outside and usually unobstructed. While it is more expensive to install a TTW unit due to the additional construction costs you’ll also need to consider the timing of the install to minimize the noise and descriptiveness of the construction which can typically be completed in a weekend.

TTW ATM Machine GenmegaAnother choice is the outdoor ATM. (These ATM’s may also be inserted into a wall.) Outdoor ATM’s can be used 24 hours a day, and therefore they let you collect ATM fees 24 hours a day! This option, obviously, will save you interior space, too. A downside to an outdoor ATM however, is that depending on the location, your outdoor ATM may require proper lighting so people will feel safe using the ATM; and, depending on the area, you may consider some sort of surveillance cameras. Most outdoor ATM machines are weather protected but if you want the highest possible usage, you’d be smart to consider some kind of protection from the weather for the ATM users, again depending on the type of deployment and the weather in the area. While outdoor ATM’s can be more expensive to keep up, they typically have much higher usage and therefor justify the expense.

Keeping your motivation in mind, this ATM Machine Buyer’s guide is meant to help you not only decide if an ATM is right for you as a business, but is it right for the location where you’re going to put it, and, will your customers use it. If you’re main motivation is to offset credit card fees, almost certainly a free standing ATM will help with that. If you’re motivation is to make more money just from the ATM usage, a thru-the-wall  machine available 24 hours will product much more profit in the right installation.

Your ATM decision-making process doesn’t stop there. A list of other questions you need to answer would include: See ATM Machines, A Buyer’s Guide part 2.