A business owner should always be on the lookout for new strategies to generate more money and increase sales. One profitable way to increase passive income is by starting an ATM business.
But before you buy an ATM, you must first carefully consider several factors. The first and most crucial one is choosing a reliable ATM service company.
With so many different ATM service providers in the United States, making a decision can be hard. Each ATM service company provides various types of machines as well as services.
Business owners need to make careful decisions to enjoy maximum benefits. These include a broader range of services, better security and safety, and, most importantly, higher revenue.
Things to Consider Before Buying an ATM Machine
Starting an ATM business is not a simple task. You need to consider several things before you make a decision and purchase a machine.
• ATM Service Provider
Deciding on which ATM service company to choose from is challenging. Each company offers different kinds of machines, services, and capabilities.
Some companies offer refurbished machines, others provide brand new ones, while some like Bell ATM offers both. You need to check if the company provides repair and maintenance services. Additionally, check if they have machine parts in case you need to replace anything.
• Location
You need to see if the store or location receives a lot of foot traffic. An ATM will cost you thousands to purchase, and you have to add the repair and maintenance expenses as well.
Before you make a purchase, it’s necessary to study the targeted site and traffic it usually gets. You can do some quick math to see your expected revenue.
As a general rule, 3 to 5 percent of people who see an ATM will use it. If the surcharge for the ATM is $3 and there is a transaction processing fee of $0.60, you will have a revenue of $2.40 per transaction.
Let us say your store gets 200 customers per day, then your monthly revenue will look like this:
200 customers per day x 30 days x 5% conversion x $2.40 = $720 per month
You also need to consider if the other businesses near your machine are only accepting cards for transactions. Are the customers frequently paying using cash or card? If answers are leaning to cash payment, then your ATM business will be a success.
• Costs
The machines can cost anywhere between $1000 and up to $25000 or more. Refurbished or used machines are usually sold at a starting price of $500. Meanwhile, Bizfluent reports that brand new machines can cost from $1,800 to $3,000.
Repair and maintenance will also cost you additional expenses, so be sure to prepare for those.
• Payment Processing
Business owners who plan on purchasing their machines will need to consider the payment processing service. However, if you’re only a small ATM operator, then you might want to consider partnering with a smaller processing middle-man.
• Cash Management
If you have multiple machine locations, you might not want to handle all the cash directly, especially with multiple transactions. Instead, you can opt for a cash management firm to handle all the operations.
The Final Verdict
In summary, starting an ATM business can be very profitable if your machine gets a lot of traffic. Of course, you also need to consider other factors to prepare yourself. You will need to decide which service company you will get your machine from and the area where you will install it. Then you have to consider the payment process and management of cash.
Once you have all of these planned out, you can start benefiting from your passive income.