Starting an ATM business can seem like an easy way to make money without much effort. The idea is simple: place an ATM in a busy location, collect surcharge fees, and earn a steady income. However, the reality is a bit more complex.

1. False Expectations

The idea of making money while doing nothing is appealing. ATMs generate fees even when you’re not there, Right? Well sort of… Believing it’s completely passive income is far from the truth. Successful ATM business owners must be proactive:

• Finding Locations: You need to constantly look for new, high-traffic places to install your ATMs. If you are not growing- you are dying.
• Handling Issues: You must be ready to solve customer complaints and fix machine problems quickly. An out-of-service ATM can lose money and hurt your reputation.
• Maintenance and Cash Management: Regular upkeep and making sure the ATMs are always stocked with cash are crucial.

Without understanding these responsibilities, many new ATM business owners fail to make the income they expect.

2. Failure to Give Up on Poor Performing Locations

Many new ATM operators don’t give up on bad locations. They hope that small changes, like adjusting the surcharge fee, will improve performance. However, the real problem is often the location itself:

• Low Foot Traffic: Places with a low number of people per day will have limited use. Look for a minimum of 100 customers per day, and ask the location “how many customers do you have a day?”
• Credit Card Reliance: Locations where people primarily just use credit cards really have no need for an ATM. Typically locations that have higher tickets items like high end restaurants, electronic stores, home stores, etc. You want a mom and pop business who values cash over just paying with a credit card.

Recognizing and leaving poor locations quickly is important. Sticking with bad spots can waste resources and hurt the business.

3. Choosing the Wrong Locations

Picking the right location is key to an ATM business. Both new and experienced operators sometimes place ATMs without enough research:

• Impact on Operations: For large operators with many profitable ATMs, one bad location might not matter much. They can move the machine. But for smaller operators, a bad location can seriously hurt their finances and operations.
• Research and Analysis: Successful placement needs detailed study of foot traffic, nearby businesses, and if there is a demand for cash.

Not spending time on choosing the right locations can cause major problems. We have written dozens of articles on choosing the right locations, check out our older blog posts.

4. Failure to Budget for Repairs and Upgrades

ATMs need regular maintenance and upgrades. Many operators don’t budget enough for these costs:

• Repairs: ATMs are fairly reliable nowadays however when the do break down typically they are shockingly costly to repair.
• Upgrades: New technology and changing laws and network regulations may require upgrades to keep ATMs compliant.

Not planning for these costs can quickly eat into profits.

5. Bank Closures

Good relationships with banks are crucial but can be tricky:

• Bank Cooperation: Small operators might find it hard to keep good relationships with banks. Banks may have strict requirements and fees.
• Business Continuity: Larger operators reduce risk by working with multiple banks, so if one relationship ends, they can continue operating.

Managing bank relationships well is vital for long-term success.

6. Competition

The ATM industry has more new businesses than ever, increasing competition. To succeed, operators must stand out:

• Experience and Expertise: New operators often lack the experience needed to compete. Standing out can be tough without industry knowledge.
• Value Proposition: Offering great customer service, choosing the best locations, and ensuring reliable ATMs can make a difference. We always recommend new ATMs to those who are new to the industry for many reasons.

Without a clear way to stand out, new businesses may struggle to succeed.

7. DO NOT PAY FOR AN ATM COURSE

Many people are tempted to pay for expensive courses that promise to teach them everything about the ATM business. However, these courses often provide information that can be found for free or learned through experience or honestly by having a few strategy sessions with an experienced account rep- like what we have at Best Products:

• Free Resources: The internet is littered with zillions of free resources such as forums, blogs, and YouTube videos, where experienced operators share their knowledge.
• Hands-On Experience: Learning by doing can be more valuable than any course. Start small, and learn from your mistakes and successes.
• Networking: Join industry groups and attend trade shows to meet experienced operators who can offer advice and mentorship.

If there is any take away from this post- this should be the most important thing. Paying for an expensive course is not necessary. With a bit of research and effort, you can learn the ins and outs of the ATM business without spending ANY money.

Conclusion

The ATM business can be profitable but comes with challenges. False expectations, bad location choices, not budgeting for repairs, bank closures, and increasing competition are common issues. Understanding and addressing these problems is essential for success. Entrepreneurs must approach the ATM business realistically, do thorough research, and have a solid plan to navigate the challenges and grow their business.