Starting a successful ATM business takes more than buying a kiosk and turning it on. One important aspect of successfully starting a business is researching and applying for the licenses and permits that are needed to operate legally.
The question, “what business license do I need to start my business” is a common one, but in reality, a business will often need multiple licenses, permits, and registrations from federal, state, and local agencies.
Related: Guide to starting an ATM business
To not miss any important licenses and permits, we recommend also checking with your local Chamber of Commerce, economic development agency, or use a business license service like Incfile or LegalZoom.
What Licenses Do You Need to Start an ATM business?
Federal Licensing
At the federal level, ATM owners need to be aware of regulations under the Federal Reserve’s Federal Electronic Funds Transfer Act and the Department of Treasury’s Bank Protection Act.
State Licensing
Most states require the licensing of any non-bank ATM business. Typically, regulations will be through the state’s Division of Banking or Financial Institutions.
Here are a few examples:
In Oregon, an ATM business will need to register for a Money Transmitter License with the Oregon Department of Financial Institutions and Professionals.
The Illinois Department of Financial & Professional Regulation requires owned ATMs to be licensed with the state under the Electronic Fund Transfer Act.
Local Licensing
If the thought of researching the federal and state requirements wasn’t enough, many cities and counties also regulate ATM business.
For instance, Nassau County, New York, requires that all merchants who operate an automated teller machine in any location other than a bank must register each ATM with the Office of Consumer Affairs.
Cleveland Heights, Ohio, requires an ATM business to file an Application for a Non-bank Automated Teller Machine Permit.
In addition to the specific requirements for registering an ATM business, there will likely be general licensing requirements as well. Here are a few of the common licenses and permits that an ATM business may need:
General Business License or Permit
Depending on where the business is located, a general business license or permit may be required. A few states require a business license; however, they are more commonly found at the city level.
Learn more: Business license requirements by state
Federal Employer Identification Number
The Federal Employer Identification Number (also referred to as a FEIN, Employer Identification Number, EIN, or Federal Tax ID Number) is a unique nine-digit number that identifies a business with the Internal Revenue Service (IRS).
Any business with employees or those that form as a partnership, Corporation, and in many cases an LLC, the business will need to get an EIN.
Sole proprietors and single-owner LLCs without employees can instead use the owner’s social security number.
Learn: How to get an EIN
Sales Tax Permit or Number
In order to sell products and/or offer certain services, a state sales tax permit (or tax ID number) may be needed. This permit creates an account number with the state’s Department of Revenue or a similarly named state taxing agency.
Additionally, hiring employees will also likely require a state tax number.
Learn: How to get a sales tax permit
Business Name Registration or DBA
While not necessarily a business license, it’s worth noting that in order to use a name for a business, many states require the registration of that name. Making matters more complicated, the process of name registration is different by state and the type of business entity.
For instance, sole proprietorships and partnerships generally need to register a business name (also referred to as a Doing Business As, DBA, fictitious name, or assumed name).
Learn: How to register a DBA
Corporations and LLCs register are a little easier in that their name is registered when forming the entity.
Related: What is the difference between a sole proprietorship, partnership, Corporation, or LLC?