ATM pricing

Because of competition and falling technology prices, ATM prices have come down by more than half since the ATM boom that began in 1996 — but they are still a major investment. Now, they run anywhere from $1,500 to $30,000, with the typical standalone or countertop ATM for the retail market for $3,000+ and through-the-wall ATM pricing in the $5K and up. At the high end, which ranges up to $10,000 for retail ATMs, you will find models that can hold more cash, are made of heavier gauge metal, and feature vault-class safes that allow you to leave the ATM unattended. See what other BuyerZone users have paid for automated teller machines.

Ongoing costs include a phone line (~$30 per month), power, professional cash loading service if you do not want to do it yourself (about $50 per trip), and replacement receipt paper. Other optional costs include an additional cash cassette (required if you will be doing business with an armored car service), and extended warranty or service agreement.

Some ATM vendors also charge monthly fees. These non-mandated fees can turn an ATM that is $750 less than the other options you are considering into less of a bargain in a hurry: at $15 per month over 5 years, that would add $900 to your total price.

Making money from ATMs
To offset these expenses, you can make money with your ATM via surcharges. Determining how much to charge is up to you – surcharges range from one dollar to nine dollars depending on the location with an average surcharge of $2.00. At the average surcharge, if you were to process 300 transactions per month, your ATM would generate $600 per month or $7,300 per year in revenue.

The percentage of that surcharge revenue you take depends on how involved the vendor is in managing your machine. If the ATM provider does nothing but install the machine and process transactions, you can earn up to 100% of the surcharge. If the supplier underwrites the cost of the machine, maintains it, and/or stocks the machine with cash, your percentage drops accordingly.

Do the math and you can see that the revenue earned on each transaction, between 35% and 100% percent of the average $2 surcharge, can add up. A good rule of thumb is that the ATM should be able to pay for itself in a year. Plus, there are the soft benefits: on average, ATM users spend 20 to 25 percent more than customers who do not use an ATM, according to research from ATM Marketplace.

Free ATMs
Many ATM vendors offer high-traffic businesses the chance to place ATMs at their locations at no charge. The vendors offer turnkey placements where they install, service and operate the ATM for free. The business simply provides the electrical power, and some floor or counter space, and in return they receive a specified – but small – percentage of the surcharge collected. Not all locations qualify for these free ATMs. the Tremont Capital Group estimates that about 19% of ATMs deployed by non-banks are under this type of agreement.

Keep in mind, however, that nothing is truly free. You still need to troubleshoot for customers who have problems with the machine, so make sure the ATM supplier's customer service meets your needs. Also, if you do the math, you may find that paying for a machine upfront is worth gaining more of the long-term payoff.

Watch out for aggressive sales techniques. With a dwindling number of viable locations to place a cash machine, ATM suppliers can fight ferociously for your business. While you may think you have negotiated yourself a good deal with a "free" machine, the fine print can say otherwise.

Double check your contract
The details of the contract should specify how much the ATM costs, the term of the agreement, who pays for the phone line, who stocks the ATM with cash, who sets the transaction surcharge, how the transaction revenue is to be divided, service and maintenance agreements, and the conditions for contract termination.

Pay special attention to the contract term — you may find yourself inextricably bound to your provider. Some suppliers may have you sign a perpetual agreement that prevents you from removing a cash machine from your location, meaning you are stuck with the machine until the supplier decides to remove it.

Similarly, auto-renewing agreements are common, and require you to notify the ATM provider that you no longer want to have a cash machine within a narrow window of time before the contract term is over. Make sure you book these renewal dates into your calendar. Contracts can vary from being month-to-month to up to seven or eight years in length, with an average of five years.