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How to Start an ATM Business

All those ATMs you see throughout your neighborhood are installed there by somebody, typically an ATM company that works with banks and other financial institutions. Thankfully, it's possible to start an ATM business and make good money if you know where to start and what steps to take.

If you're interested in learning how to start an ATM business, the following steps should help you get started. We will break each of these steps down into necessary extra steps, such as researching different ATM types and working with different banking companies when creating your products.

Step One: Know What Paperwork You Need

Before you start an ATM business, it is essential to know what paperwork is necessary for this process. When learning how to start an ATM business, there are many paperwork types that you need to plan and prepare before you start your new business carefully.

First, you'll need essential business paperwork that helps you start your company without running into legal troubles. This paperwork will vary depending on your state but typically include a variety of different items, such as:

  • Application for a business name
  • Copyright and branding information
  • Details about your financial worth
  • Credit score reports before applying for loans
  • Any other paperwork your state wants before approving an ATM business

Next, you need to get equipment order forms and start finding the equipment you want and need. This information typically includes the type of ATM units that you want to install, the denominations your machines will dispense, and much more. You may even need equipment for hooking up to the internet to ensure that your machine works properly.

We'll discuss the various ATM types available and what benefits they provide later. These units provide different operational advantages or may be dictated by the bank you work with. This information is essential to get right before even starting.

Other Forms You Need

After gathering your essential business paperwork, you need to get an ACH form to open a business bank account and deposit money into it. You'll need your driver's license to ensure that you pass a basic background check. Otherwise, your paperwork may not be approved.

After providing this information for your background check, it is also important to provide a voided business check from your bank to verify that your account is legitimate. You'll need a checking account for this type of deposit. Other forms you may need for this business include:

  • W-9 Form: This tax form is essential when setting up an ATM business. It helps you report your earnings to your taxes to ensure that everything is legal. Otherwise, you might end up in a challenging legal situation.
  • ATM Operator Agreement: This agreement states that you are following all federal regulations with your machine and must be completed and filled out before working with any banks.
  • ATM Processing Agreement: You'll now need an ATM processing agreement that lists your rights and obligations as an ATM owner. It is the legal contract that connects you with the bank.
  • Placement Agreement: You need to fill out these agreements when placing your ATM on property owned by somebody else. It creates a contract between you and that party, including rent and such.

What else do you need?

Machine Insurance: ATM insurance can help you if you end up getting robbed by covering cash replacement and more. Look for a company that works with the ATM Industry Association (ATMIA).

Wireless Agreement: Setting up a wireless plan with your banks can help ensure that your ATM can sync to their financial records and provide accurate cash dispersal.

These documents are just the first things you need to do when learning how to start an ATM business. They are critical to your success but are just the tip of the iceberg. Next, you need to find a financing option that can help you start up your business quickly and effectively.

Step Two: Finding Funding

When learning how to start an ATM business, the next step you need to take is finding financing for your company. There are many financing sources you can consider that may work well for your needs. These will vary depending on your business type and overall size.

For example, you may only want a small business with just you and a few other people operating your units. Thankfully, this is a doable prospect for ATM businesses. Just a few funding options that you may want to consider when starting your ATM business include:

  • Small Business Loans: If you are starting up a reasonably small ATM business, you probably only need a small business loan. These are designed to provide you with excellent startup capital while not burdening you with heavy repayment cycles. They're a good option for many small businesses.
  • Startup Grants: Grants are a fantastic way to start your business because they require no repayment cycle and can come from many sources. However, there is typically heavy competition for these grants, meaning that it's hard to qualify for various resources.
  • Borrowing From Family Members: A typical ATM business may be inexpensive enough to make borrowing from family and friends possible. It is essential to repay your loved ones if you do take this route to avoid burning any bridges if you need help later.
  • Angel Investors: It's the dream of every startup to find their angel investor fairy and get a massive influx of cash right at the beginning of their story. While this option isn't always the easiest way to get money, there are many companies and entrepreneurs that work as angel investors.

Read the Fine Print

Ensure you always read the fine print very carefully when applying for any type of extra business funding. That's because there might be surprise limitations or even other complex wording that may cost you money if you aren't careful and catch these problems.

For example, it's not uncommon for lenders to hike their interest rates if you miss a payment. Know the size of this penalty and how it will impact you to plan your financial situation. In this way, you minimize your risk of suddenly experiencing much higher operational costs.

Step Three: Picking an ATM Type

Now that you know how to start an ATM business on the financial and legal end, it's critical to tackle more practical matters. These include the type of ATMs you want to buy and the manufacturer you want for your machines. The ATM types from which you can choose include:

  • Free-Standing ATMs: These popular models provide you with a lot of flexibility because you can install them in many more places. They're also easy to hook up with and can be moved around much easier. That said, they're also more prone to theft and other types of dangers.
  • TTW ATMs: If you want a bulkier machine that is harder to move and rob, this is an excellent type to provide. It is also easy to secure on the inside of a wall and extend into a bank's wall. In this way, your machine is safer, and your money protected even more.
  • Wall Mount ATMs: Wall mount ATMs are a popular option for small spaces or low-traffic areas. They work well as inexpensive options for banks, gas stations, and other areas that have room for an ATM but don't get a lot of traffic. There are a few downsides, like a potential theft risk.

Beyond these different types, you must invest in specific machine types that your customers appreciate. For example, if you work with two banks that prefer Hyosung machines, you should buy them for those individuals. The same is true if one or more customers prefer Genmega.

The multiple types of ATM manufacturers on the market should make this process interesting. Try to buy a few models of each type and pick manufacturers that you know your customers will want. That will depend on your connections with customers later, so research your options now to learn more.

Step Four: Find Customers and Locations

Once you have decided on your machine types and manufacturers, it is essential to start reaching out to potential customers. Contact all the banks in your service area and a few miles beyond and learn more about their ATM situation. Try to convince them why they should work with you, including:

  • Lower Prices: Try to set up lower costs for your customers at the beginning to build loyalty. As you expand your ATM options and improve your service, you can increase prices slowly.
  • Personalized Attention: When running a small ATM business, you can focus more specifically on your customer's needs. That makes it easier to provide high-quality and personalized care.
  • Diverse Machine Options: Here's why you provide multiple machine types: you can highlight your diverse brand and machine varieties to intrigue more potential customers.

You can also reach out to places like gas stations, grocery stores, and other businesses to try to sell your machines directly to them. It is also important to make sure that you research who owns the space and set up an agreement that makes sense for your financial situation.

Picking ATM Locations

It is important to find locations that benefit you and the business hosting the ATM. Remember that you'll get small fees for running the ATM, so you'll make money on every transaction. Try to contact companies in locations that include:

  • High-Traffic Areas: You want to find areas where a lot of people walk, such as through shopping centers. For example, a supermarket is a great place to add an ATM because lots of people go through there every day to buy food and other amenities.
  • Safe Spots: Try to focus your new ATM business on servicing safer and more secure areas. Research the crime statistics of an area and find ones that have minimal issues. Doing so can cut back on your potential risk and ensure that your company is safer from potential robbery.
  • Liquor License Businesses: Putting your ATMs near businesses with a liquor license is a great idea. For example, putting them in gentleman's clubs is likely to generate a lot of income because patrons may need cash for drinks and entertainment. The same is true of bars and gas stations.
  • Long-Term Success: Don't pick an ATM location without knowing whether or not the area is likely to stay safe and successful. For example, a mall is probably not the best investment because malls are losing popularity and closing all over the nation, even before COVID-19.

If you focus your ATMs in these locations, they run the highest chance of turning a profit. Remember that most of your money will be earned through service fees and surcharges, so you want your ATM to get used often without costing you excessive money.

Step Five: Set Your Charges

Lastly, it is important to know how much to charge users for each transaction. While some people may avoid machines when they have a surcharge, most will simply pay the extra money for convenience. Charging $2.50 is a suitable surcharge that is average in most areas and tolerable for most.

Now, imagine that you have 10 machines that make 5-10 transactions. That's $125 to $250 daily and $7,500 per month, which is a completely doable goal for many ATM owners. You'll get that money into your account simply for having machines, though you must make sure each stays filled with cash.

Note that you can set a lower surcharge to encourage people to come to your machine over others or set a higher surcharge in captive areas. For instance, setting a $3.5 surcharge in a bar, brewery, or dispensary will earn you potentially 25 surcharge fees or about $875 between your 10 machines.

Naturally, your money goes up as you add more machines, making it important to install as many as possible. Make sure that you also set your charges based on your agreement with banks or other cash providers to ensure that you get a reasonable level of profit for your machines.

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Lily Wordsmith

Written by Lily Wordsmith

Lily Wordsmith is a freelance writer who has had a love affair with the written word for decades. You can find her writing blog posts and articles while sitting under a tree at the local park watching her kids play, or typing away on her tablet in line at the DMV. In addition to her freelance career, she is pursuing ebook writing with an ever-growing repertoire of witty ebooks to her name. Her diversity is boundless, and she has written about everything from astrobotany to zookeepers. Her real passions are her family, baking desserts and all things luxe.

Read more posts by Lily Wordsmith

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