atm business bank account Archives

Tag Archive for: atm business bank account

How to Test Your ATM and Get ATM Fee Reimbursement

ATM fee reimbursement is important to independent ATM deployers (IADs) who want to regularly make test transactions on their machines to make sure that everything is functioning properly. We at ATMDepot.com highly recommend testing your ATM machine’s functionality upon its installation, but you will also want to make test transactions regularly to make sure there are no mistakes with cash dispensing.

However, we wouldn’t recommend paying hundreds of dollars a year in bank withdrawal fees. So what should you do to test your machine and how can you minimize or completely avoid paying bank withdrawal fees on your own ATMs? Keep reading to find out.

The Importance of Testing Your ATM

It’s important to test your ATM machine to make sure that it performs all of its functions and that it performs them quickly and accurately. It’s best to find out for yourself that something isn’t programmed quite right or that something mechanical isn’t running smoothly than waiting for a complaint from a dissatisfied customer or the location owner.

You only make money while you are in business. And you are only in business while your machine is working and processing transactions accurately. Especially if your machine dispenses more than one denomination, you want to be 100% sure that 10s and 20s are dispensed in the right quantities. Otherwise, you risk facing a number of customer complaints and journal requests when customers are shorted. Or worse, you risk losing money if your machine dispenses more than it should.

For these reasons, it’s important to test your ATM machine every time you reload it with cash. You’re better safe than sorry. But can you really justify hundreds of dollars a year in bank withdrawal fees?

Types of ATM Fees

You know that ATM machines charge a surcharge, or convenience, fee. That’s why you are in the ATM business to begin with. So when you make a test transaction on your own machine, you know that surcharge fee is going straight back into your account. So you aren’t losing any money there. But what about your bank fees?

Most banks offer free ATM services for their customers when they use machines that are in-network, or owned by that bank or its partners. Similarly, most banks charge withdrawal or transaction fees for out-of-network ATM services, meaning ATMs not owned by that bank. Here are some examples of ATM fees by bank.

Since you own your ATM independently, it is not operated by a financial institution and is therefore always out-of-network. So although you pay yourself your ATM’s surcharge fee when you make a test transaction, you could still face an out-of-network withdrawal fee from your bank.

Fortunately, many banks offer ATM fee reimbursement. Next are considerations you should make when choosing a bank and negotiating ATM fees.

How to Get ATM Fee Reimbursement

ATM fees are among the most commonly charged banking fees. And they add up quickly if you are making regular ATM withdrawals. ATM fee reimbursement refers to the method by which banks pay customers back for certain ATM fees they incur. All banks should have clearly defined policies and fee structures you need to be aware of to minimize and avoid these fees to save yourself a good chunk of change each year.

Did you know that you can call your financial institution’s customer service line and request ATM fee reimbursement? You can. However, you might run into some limitations.

No ATM Fee Reimbursement Benefits

First, you could be denied right off the bat, no ifs, ands, or buts. Maybe your bank does not offer ATM fee reimbursement, or maybe your particular account doesn’t qualify. If that’s the case, it might be time to look into switching to an account with certain benefits or opening an account with another bank from which you can test your ATM machines at no extra cost.

ATM Fee Reimbursement Benefits on a Case-by-Case Basis

Second, ATM reimbursement is up to your bank’s discretion. Their decision could depend on your circumstances, your business history with the bank, your volume of ATM withdrawal fees, etc.

Therefore, you could face some inconsistencies. If you get reimbursed once, don’t expect it every time. Alternatively, just because you are denied one time does not necessarily mean that you will always be denied. It doesn’t hurt to call, explain your situation, and ask for ATM fee reimbursement. But if you are making regular test transactions on your ATM machine, we recommend more efficient ways to seek reimbursement than relying on case-by-case decisions each month.

ATM Fee Reimbursement for Specific Banks or Account Types

Some banks offer ATM fee reimbursement as part of their account benefits. The specifications and limitations will differ from bank to bank, though. You might find an institution or an account that offers reimbursement for a set number or amount ($10, for example) of out-of-network ATM fees per month. You might find some that waive the fees altogether.

Most banks will waive out-of-network ATM fees for customers who keep large balances in higher-tier checking or savings accounts. Or reimbursement could depend on maintaining a minimum account balance.

We recommend finding a bank that offers accounts with ATM fee reimbursement benefits or a bank that waives the fees altogether. These banks will automatically credit your account for the fees at the end of the month or statement cycle which saves you time and energy having to regularly call and negotiate fee reimbursement with your bank.

Banks That Offer ATM Fee Reimbursement

Online banks are notorious for offering ATM fee reimbursement. That’s because most of these institutions do not maintain physical ATM locations which forces customers to use out-of-network ATMs and unavoidably incur fees.

ATM fee reimbursement is more common than you might think. It’s a way to retain customers who could opt for accounts with institutions that better suit their needs. Several banks offer some sort of reimbursement although some limitations may apply.

Here are some banks that offer ATM fee reimbursement benefits:

Alliant Credit Union

Offers $20 a month in ATM fee refunds when you use the Alliant Visa debit card. Your refund is deposited into your checking account at the end of each day that you’re charged ATM fees.

Ally Bank

Reimburses up to $10 a month in out-of-network ATM fees.

Aspiration

The Summit Account is a free online checking option (costs no monthly fee) that offers no-fee access to any ATM in the world. The company also reimburses all ATM fees you pay to other banks or operators on a monthly basis.

Axos Bank

Offers unlimited domestic ATM fee reimbursements for its standard Essential Checking, Rewards Checking, and Cashback Checking accounts. Its Golden Checking account for customers ages 55 and older offers up to $8 in ATM fee reimbursement each month.

BankFive

Caps its ATM fee reimbursement at $10 per statement cycle.

Charles Schwab Bank

The High Yield Investor Checking account offers customers unlimited ATM fee reimbursement.

E-Trade Financial Corporation

Offers free domestic ATM use.

Fidelity Investments

Also offers free domestic ATM use.

First Republic

Offers free ATM use around the world.

IncredibleBank

Automatically reimburses external ATM fees, though a minimum balance is required to avoid incurring a monthly fee.

LendingClub

Customers with either a Rewards Checking or Tailored Business Checking account receive unlimited ATM fee reimbursements.

Navy Federal Credit Union

Offers up to $10 in ATM fee rebates per statement cycle for its Free Easy Checking account on the condition that members either set up direct deposit or make at least 20 transactions each month. However, to qualify to open an account with Navy Federal Credit Union, you also need to be a member of the military or have a household connection to someone who is.

Needham Bank

Offers unlimited ATM fee reimbursement, both domestic and international with no minimum account balance requirements or monthly fees.

TD Bank

Customers with a Beyond Checking account can get unlimited out-of-network ATM fee reimbursements as long as they maintain a minimum balance of $2,500 in the account.

TIAA Bank

Customers can get reimbursed up to $15 in ATM fees each month without maintaining a minimum balance. Accounts that require a minimum average daily balance of $5,000, however, offer unlimited ATM fee reimbursement.

Conclusion

In addition to the many considerations you need to make when searching for the best banks as an IAD, you want to also think about ATM fee reimbursement options. A convenient, cost-effective checking account will allow you to test your ATM machines as often as necessary without incurring hundreds of dollars in fees for doing so. If you’d like to know more about ATM installation and training, click here or contact us today.

ATM Business-Friendly Banks: Where Are They?

by Amber Iven

ATM business-friendly banks might be difficult to find. It doesn’t matter if you’re new to the ATM business or have been in the business for a while. This is because ATM businesses are often viewed as “high-risk” accounts. Due to the amount of cash ATM businesses handle, this makes them prime money-laundering businesses, a liability banks try to avoid at all costs.

Efforts have been made to change federal regulations in an attempt to protect independent ATM owners and their customers. But some businesses are still struggling. So, why is it so hard to find a bank that will work with you? What can you do to get your business up and running?

Operation Choke Point

In 2013, there was an investigation launched known as Operation Choke Point. This investigation looked closely into banks’ dealings with “high-risk” companies. High-risk companies are those that are more likely to be involved in illegal activity. In the case of ATM businesses, this concern stems from the amount of cash ATM businesses handle regularly.

This investigation resulted in the closure of a number of ATM businesses—even lawful ones. Without access to the banking system, these businesses were unable to operate. The investigation ended in 2017, but high-risk account closures continue with or without valid reason.

To help protect legitimate ATM companies that continue to be denied the basic business banking services necessary for them to operate, the National ATM Council (NAC) lobbied for a year to help effect change. Last year, the NAC succeeded.

On April 1, 2021, the Office of the Comptroller of the Currency (OCC) adopted a new federal regulation designed to provide fair access to banking services by large national banks and other financial institutions. Unfortunately, there are some ATM owners who report that it still is not any easier to find an ATM business-friendly bank.

Potential Risks to Banks

During Operation Choke Point, prosecutors targeted banks rather than individual businesses. Banks are held responsible for servicing companies that conduct unlawful business practices and are therefore liable to federal penalties.

According to a 2019 Cash Settlement Account Closure Survey conducted by the ATM Industry Association (ATMIA), the three banks responsible for the most ATM cash settlement account closures were Bank of America, Wells Fargo, and JP Morgan Chase. Regional banks, community banks, and credit unions were responsible for 20% of closures or less.

Large national banks are preferred by independent ATM owners for their convenient locations and extensive service offerings. However, these banks are less likely than smaller banks to work with ATM businesses. Because of their size and reputation, national banks are subjected to more scrutiny. This makes it more costly for them to service ATM business accounts.

The potential for audits, compliance reviews, investigations, and regulation changes make servicing high-risk businesses risky and costly. Not to mention federal penalties banks face if they happen to service a company that does engage in money-laundering activity or fraud.

It can also be costly to meet the cash demands of ATM businesses. Depending on the needs of their clients, banks might have to order extra cash in addition to their regular supply. Plus the cost and hassle of drop off arrangements.

Sixty-four percent of respondents to the ATMIA survey reported that they had an account closed without being provided with a reason. Reasons that were provided include account deemed money services business (MSB), inability to support cash needs, compliance burdens, and money laundering and Bank Secrecy Act (BSA) concerns.

Banks are for-profit organizations. Because of the potential risks and costs, the only way ATM business accounts benefit banks is if they bring in more money than it costs to manage them.

Threats to Independent ATM Owners

ATM businesses cannot operate without first being sponsored by a bank. This allows the business to become a member of the financial networks through which ATM transactions are conducted.

Furthermore, ATM owners need at least one account in order to receive deposits from transactions made on their machines. Also known as a settlement account, this is where the funds come from for reloading the ATMs with cash. Sometimes, ATM business owners opt for a second account. This account receives the surcharge commissions deposits, thus separating replenishment funds from income.

Without access to these financial services, ATM owners cannot operate their businesses. Only 12% of respondents to the ATMIA survey could say that they had never had an account closed. Twenty-seven percent had experienced one account closure, and 14% had experienced more than 5. Regardless of fleet size, each independent ATM owner’s chance of having an account closed (with or without reason) is quite high.

Some ATM business owners whose accounts haven’t been closed have faced other threats. They have been forced to shut down, relocate, pay hefty fees to remain in business, or make costly arrangements outside of financial institutions. There are minimum account balance fees, fees for excessive ACH deposits, fees for regular cash pickups….

There are even instances of banks charging store owners a monthly fee for adding an ATM machine to their stores. And some banks that will work with ATM businesses require armored vaulting service which is costly in and of itself.

Threats to the Underbanked

It is common for independent ATM owners to place their machines in areas without convenient access to bank branches. ATMs in these areas are also vital to the underbanked members of the community.

In rural, low-income areas, the cost of the surcharge fee is more reasonable than the cost of gas. In other areas, there are large populations of customers without vehicles at all. For these people, ATMs are the only way to access their paychecks and government assistance.

Independent ATMs account for almost 60% of all the ATMs deployed in America. They are almost exclusively responsible for providing convenient access to cash to low-income communities, inner-city neighborhoods, and rural areas. Without entrepreneurial ATMs, the underbanked would lose access to life-sustaining funds. These independent ATMs are, therefore, essential businesses that must remain operational.

How to Find ATM Business-Friendly Banks

When looking for a bank to work with, it’s important to be up-front about your business model and needs. It is also reasonable for you to expect a bank to be up-front with you about their fee structures, policies, and requirements.

It’s best to start with an institution with which you already have a relationship. Banks are for-profit organizations, so they won’t turn away a valued customer that brings in money. Therefore, it’s a good idea to consider purchasing a number of products in addition to the necessary business accounts.

For example, you could have personal and business checking accounts, start a savings account, open a personal and business credit card, or refinance a loan if applicable. Regardless of the risk of your ATM business, a bank is not likely to turn away a customer with multiple products because that is how they make money.

It’s also important to remember that national banks are less likely to assume the risk of an ATM business account than regional, local, private banks are. Even if you are able to get in with a national bank, your chances of having your accounts closed are higher.

You shouldn’t have to worry about your account being deemed an MSB. ATM businesses are not MSBs; FinCEN/FDIC do not define them as such. Since it has been reported that a common reason behind account closures is for MSBs, it’s important to address this fact with a banker when setting up your accounts.

Finally, you do have the option to work independently from a bank. The alternative is to use the services of a vaulting service. This comes with its own costs, but it might be worth it to know your account won’t spontaneously be closed and your business interrupted.

How to Find and Choose the Right Bank

For more information about how to find and choose the right bank, check out the resources available to you in our Member’s Area. Here, you can learn from industry professionals with years of experience how to set up an ATM business bank account with an ATM business-friendly bank.