Like pay phones or vending machines before them, automated teller machines (ATMs) are the latest convenience installations for businesses. If your business is high-traffic, far from a bank ATM, or is a destination location where customers spend money throughout a visit, installing an ATM can even be a profitable venture.

ATMs operate by accepting any credit or debit card and dispensing cash to the card's owner. Your profit comes from the surcharges the users pay for the convenience, usually $1-2 per transaction. Also, depending on the business environment, savings can be realized in terms of your business having fewer credit-card processing charges since customers will always have the option of paying cash. Cardholders usually will also be levied a "foreign terminal fee" (the average figure is $1.75) from their own bank in addition to your ATM's surcharge.

ATM machines have three main components: the vault or safe; the computer; and the cash-dispensing mechanism, usually a cassette of some sort. Your purchase includes the unit, installation, and the service to process the transactions. With the service, you will receive regular reports of activity. The most sophisticated ATM vendors also offer Internet-based, real-time monitoring so you do not have to physically visit the terminal to monitor activity.

ATMs and their processing services are available largely through independent service organizations (ISOs). Because the selling market for ATMs has recently ballooned, quality has thinned, so it is well worth doing your due diligence when shopping.

Find out what the top ATM brands are and focus your search on vendors who specialize in them. When reviewing offerings, look for extraneous charges like "statement fees," "management fees," and "online monitoring fees." Avoid companies that complicate their pricing in this way. Also, any vendor you select should have a policy of transferring your surcharge fees into your account within 24 hours. The ATM company makes its ongoing revenue through the cardholder's bank, not through your business.

Do not sign a contract longer than two or three years, and definitely run it by a legal eye to ferret out any unanticipated charges or other tricks. For example, some contracts are set up to automatically renew unless the terms are violated, in theory establishing a contract that will go on forever.

An indoor-installed ATM machine will cost between $3500-$4500. They can be bought outright or leased, and the purchase price should include parts and labor for at least one year. Extended warranties are not worth the cost. These machines tend to be reliable, replacement parts are fairly inexpensive and labor is only $65-$75 per hour. Moreover, any reputable company should recognize that if your ATM is down, they are not making money either, so gouging should not occur.

Studies indicate that as much as 20 percent of cash withdrawn from an in-house ATM is spent on the premises. If your business is the type that lends itself to that scenario, installing an ATM machine could be a direct Avenue To Money.