ATM Business Overview

An ATM (Automated Teller Machine) business involves owning, operating, and maintaining ATMs at various locations, such as convenience stores, gas stations, event venues, or shopping centers. The main revenue comes from transaction fees paid by users. This business model involves three parties:

The ATM owner, the venue owner where the ATM is installed, and the ATM processor, which processes the paperwork that keeps the ATM functioning. Those three parties share the ATM processing fees.

The venue owner will get a portion of the fee generated by the ATM operator. This fee is negotiated between the venue owner and ATM operator, but on average, venue owners receive $0.50 per transaction or up to 50% of the operator’s fee.

Related: Checklist To Start A Business

How Do ATM Businesses Make Money?

ATM businesses earn income by providing convenient cash withdrawal services while charging users for each transaction. The revenue model is straightforward, with fees acting as the primary source of income.

The common ways businesses in this industry make money can include:

• Surcharge Fees: The most common revenue source is fees charged to non-bank customers using the ATM.
• Interchange Fees: Banks pay these fees to ATM operators when their customers use machines owned by other entities.
• Cash Loading Services: Operators charge fees for managing cash inventory and replenishment services for ATMs.
• Transaction Processing: Income from processing various financial transactions beyond cash withdrawals, including deposits and balance inquiries.
• Advertising Revenue: Income from displaying advertisements on ATM screens or receipts during transactions.

Industry Statistics

ATM services fall under NAICS code 522320: Financial Transactions Processing, Reserve, and Clearinghouse Activities. This classification covers businesses that process financial transactions and provide automated teller machine services.

Here are some statistics about the ATM services industry:

ATM Industry Size & Growth: In the U.S., the ATM services industry generated $7.73 billion in revenue last year. The industry is projected to reach $9.54 billion over the next eight years, showing a steady annual growth rate of 2.5%. This growth stems from the increasing adoption of turnkey ATM programs and the rise of cryptocurrency ATMs (Expert Market Research).

Number of ATMs: Between 520,000 and 540,000 active ATMs operate across the market. Among bank-operated ATMs, JPMorgan Chase leads with 18,623 machines (17.5% market share), followed by Bank of America with 16,062 machines (15.1%), and Wells Fargo with 12,800 machines (12.1%) (Expert Market Research).

ATM Profit Margin: ATM businesses typically see profit margins ranging from 15% to 30% of revenue through their combination of surcharge fees, interchange fees, and additional service offerings.

Costs To Start an ATM Business

Starting an ATM business requires an investment that could range from $25,000 to $250,000. This amount varies based on the number of machines purchased and the chosen business model.

Here are some of the main costs to consider when starting an ATM business:

ATM Equipment: The cost of each ATM machine ranges from $2,000 to $8,000, depending on the model and features included. New machines with advanced capabilities like deposit acceptance and bill payment features cost more than basic cash-dispensing units.

Cash Inventory: Each ATM needs to be stocked with cash to process withdrawals. The amount varies by location and expected transaction volume but generally starts at $5,000 to $20,000 per machine.

Security Systems: ATM businesses need surveillance equipment and security features to protect both the machines and cash inventory. This includes cameras, alarms, and monitoring systems, which can cost between $1,500 to $5,000 per location.

Software and Processing: ATM processing software and network connectivity systems allow machines to communicate with banking networks. These systems cost between $2,000 to $7,500 per machine and include installation.

Insurance: ATM insurance protects against theft, vandalism, and liability. Initial coverage costs range from $1,500 to $4,000, depending on the number of machines and coverage level.

These estimates represent general ranges, and actual costs will vary depending on factors like location, scale of operations, and equipment choices.