When comparing new ATMs to used ones, there are several factors to consider:
Cost: New ATMs typically come with a higher initial cost compared to used ones. If you’re operating on a tight budget, a used ATM might be more financially feasible. However, you should also consider potential maintenance costs for a used machine.
Warranty and Support: New ATMs usually come with warranties and after-sales support from the manufacturer, providing peace of mind and assistance in case of malfunctions or technical issues. With a used ATM, you might not have access to such support, or the warranty might be limited.
Technology and Features: New ATMs often come with the latest technology and features, such as advanced security measures, touchscreen interfaces, contactless payment options, and compatibility with mobile banking apps. Used ATMs might lack some of these features or have older technology.
Customization: If you have specific requirements or branding preferences, purchasing a new ATM allows you to customize it according to your needs. This might include custom branding, software configurations, or specific hardware add-ons. Used ATMs might offer limited customization options.
Dependability: New ATMs are less likely to encounter technical issues or require frequent maintenance compared to used ones. They are also less likely to have wear and tear, potentially resulting in better long-term reliability.
Ultimately, the decision between new and used ATMs depends on your budget, requirements, and priorities. If you prioritize the latest technology, reliability, and warranty support, investing in a new ATM might be the best option. However, if you’re looking to save money and can accept some trade-offs in terms of features and support, a used ATM could be a viable alternative.
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https://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.png00Jeff Sosvillehttps://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.pngJeff Sosville2024-03-05 14:32:552024-03-05 14:32:55New ATMs vs Used ATMs
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https://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.png00Jeff Sosvillehttps://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.pngJeff Sosville2024-03-01 14:56:572024-03-01 14:56:57Selling the Best in ATM Machines and ATM Support!
See below the 8 mistakes for a complete breakdown on the ATM Business and step by step guide of how to get started. Check out our free ATM Business starter guide, go here, start your own ATM business
You made the decision to start your own ATM business. Hopefully you followed the 7 “must-do’s” to set it up right. Now you must keep it operating smoothly and profitably. If you are looking for ATM machines to buy in order to start your ATM business, look here for our ATM machines for sale
Here are the 8 mistakes you must avoid:
1. Overestimate cash flow
There are many sources online which tell you that you can make $500 per month or more from each ATM. Most of the time, these estimates are much too high. My recommendation is to do your homework and count on $250-$300 of income on the higher side. $150-$200 on the low side is a safe bet. Make some calls, talk to merchants and be conservative with your income estimates in the ATM Business. If you are looking to start an ATM Business, we can guide you in the right direction in regards to buying ATM machines and helping you to find locations, go here for more information- Start an ATM Business.
2. Purchase used equipment
Buying used ATM equipment can sound appealing but right now you need to be cautious of what you buy. With EMV requirements live today you should invest in new equipment when starting an ATM business. Pay for new equipment and you get a 2-year warranty on parts and set your business up for success. If you buy old equipment, you could run into many repairs and potentially lose locations due to out of service machines.
3. Underestimating capital requirements
You will need cash to load the machines on a rotating basis. You should count on at least $2000 per week per terminal. If you plan on deploying 10 terminals you will need at least $20k of working capital to service the machines if not more.
4. Overlook EMV
Do some research on EMV and make sure you know what makes/models can be upgraded and what the costs to upgrade are. This will save you headaches down the road when EMV is implemented. Most machines sold new as of 2018 are EMV upgraded.
5. Not setting up a bank relationship first
With operation Chokepoint and other issues in play, you should contact your bank or locally recommended banks and make sure they can support the needs of your ATM business. Some banks will not support the ATM business at this time so make sure yours does. We can assist you in navigating how to get a bank which will support you in the ATM business. If you need help finding a bank, get in touch with us here and we can help you and guide you so that you can have the necessary tools to secure a banking relationship.
6. Set your margins too low
Be careful when negotiating your surcharge fees and your commissions to your merchants. Don’t give away too much of your margin. You need to know the market and understand what is expected but at the same time not give away too much. If you set your margins correctly out of the gate you will be much happier with the income in the long run. If you need help with understanding how to set margins, be sure to check out our guide to starting an ATM business here!
7. Not having signed contracts
If you plan to sell your locations or defend your ATM location, you should make every effort to get signed agreements with all of your merchants. I have seen many operators who run their ATM business without contracts and when its time to sell, the valuation is eroded. You will also have nothing to stand behind if the merchants decide to have your ATM removed or allow a competitor to come in. Bottom line is, get signed contracts. If you are need to assistance on what makes a good contract, please contact us here and we can help!
8. Poor geography
Make sure you don’t spread your locations too far from your home base or each other. Choose a territory wisely and do your best to stick with it. The further out your locations are, the more your time and service costs go up. A tightly knit route of machines is far more appealing to buyers as well.
In addition, below is the most complete guide available to buying ATM machines!
Overview of the ATM Business:
Owning and maintaining ATMs is a way many people earn a living and create additional or passive income streams. Are you looking to buy an ATM Machine, place ATM Machines or start an ATM business? We have all the top selling ATM machines for sale and can help you out in a selection of an ATM machine! Read our ATM buyers guide and intro the the ATM business below and feel free to give us a call with any questions!
As an owner of an ATM business, you are buying ATM machines, finding locations and installing them in locations, filling them with cash and making money every time a customer withdrawals money from the machine. Once the money is taken out of your ATM it is re-deposited into a bank account of your choice on a daily basis along with the surcharge fees. A portion of the surcharge fee is typically paid to the merchant in the form of a commission or split. Additional revenue can be made on each ATM transaction in the form of interchange. All your machines can be monitored online through a portal where you can see real time information about how much cash is in each machine and how many transactions and fees have occurred.
Industry Statistics
Total number of ATMs in the US- 425,000 (source-National ATM Council)
Here are some basic things you will want when purchasing new machines:
1k Removable cassette-This is a 1000 note removable cassette which allows you to either buy an extra cassette and swap cassettes when vaulting machines or remove cassette and add cash in a private or more secure location.
Electronic Lock- most of the locks for the safe come standard e-lock although some still have a dial lock as base and most operators upgrade to the e-lock for an additional small cost. Audit Lock (single use Armor truck requirement) can add $300-$400 to the lock cost
EMV (Europay, master card, Visa) ready– Please ensure your machine is EMV ready as this is the standard as of 2017
You should attempt to select a manufacturer and stick with it if building portfolio or organizing multiple locations. This will enable you to streamline your knowledge and order parts more easily and eventually have spare parts on hand.
ATM Parts and Replacement costs:
Most new ATMs come with a 1-2 year warranty on parts and most repairs on ATMs can be handled easily with minimal knowledge of ATM repair and technology skills. Data on related repair breakdowns are not readily accessible as far as I am aware although I am working on gaining more knowledge in this area.
Here is a general layout of the parts on an ATM
Shell– The exterior of the ATM, can be purchased without the dispenser.
Topper– Adds potential advertising space for the ATM, a topper upgrade is around $50-$100 on a new machine
Safe– Safe and safe door where vault cash is contained
Lock– There are 3 main lock types, Dial Lock (standard) Electronic Lock ($50 upgrade), Audit Lock- one time use Armor truck ready ($300-$400 upgrade)
Dispenser– This is the area where cash is stored and dispensed. The most expensive part to replace and is typically repaired rather than replaced. Standard issue is fixed cassette. A 1000 note removable cassette normally adds $50-$100 depending on the retailer. New single cassette dispensers run around $800-$1000
Hyosung Halo2
Cassette– 1000 note removable is typical issue although 1700 not cassettes, dual cassettes and more are available. A removable cassette is normally a $50 upgrade on a new machine. Spare 1000 note cassettes run around $400
Screen– The exterior screen for customer use, can be touch or just visual screen, most screen replacements run $200-$300.
Main-board– Most main board with modem are $650-$700 replacement
Card Reader– EMV is new and latest standard. Most ATMs built in the last 5 years can be upgraded to EMV fairly easily and with relatively low expense ($275-$400)
Modem board– Usually located on main board although can be separate, run around $125
Printer– A printer assembly runs around $600-$700
Keypad– typically a $400-$500 part for newer ATMs
Power Supply– To replace a power supply on an ATM runs around $300-$350
Wireless– Many options exist for wireless devices and these typically run around $15-$20 per month for a lease or $275 to purchase the box and $5 per month for the connection to the wireless provider
We are able to provide machines at cost and usually meet or beat any of the competitors out there, please call us for ATM pricing and ATM machine recommendations.
Tips for buying used ATMs
Compliance – Probably the most important factor when buying a replacement ATM is making sure the ATM is compliant with todays standards. The ATM should be ADA compliant, meaning that it should have a headphone jack, and its highest touch point be no higher than 48″ off the ground. Secondly- EMV compliance or EMV upgradable. If you are buying a used ATM, most likely you can assume it is not EMV compliant. That’s fine- as long as an upgrade kit is available for a price that makes sense.
Know before you buy– ATM standards change so quickly that the manufacturer’s had to adopt new technology quickly. As a result you may have one particular model that was made for a number of years- but that model was different year one, than the last year of production. Models of the same product line can not be upgraded, where others can be. For example the most popular used ATM in the US today is the Hyosung MB 1500. An upgrade for this unit is available however it is close to $1000. So you wouldn’t want to pay more than a few hundred dollars for this machine if it is not EMV compliant already. Secondly- the 1500 has two keyboard versions. The older style used ATM (with the enter key on the bottom right) is not upgradable. The newer style is. So it makes sense to know before you buy- what you are buying. If you have any questions- please by all means give us a call. We don’t like to be the ones to tell you that the used ATM you just purchased is not upgradable and you just wasted however many hundreds of dollars. Another popular model is the 1800. This model had three versions, the 1800, 1800SE, and 1800CE. The 1800 is not upgradable for EMV where the SE and CE are, however all three look the same to the unknowing buyer.
Used Hyosung ATM machine
Age and Condition– The old saying you cant judge a book from its cover does not apply when checking the condition of a used ATM machine. The used ATM should look slightly worn, all rubber parts in the cash dispenser should be firm, not soft or spongy. Check the manufacturer build sticker to get the manufacturing date. ATMs are built to last approximately 7 years with normal usage however most last longer. So a 10 year old ATM is on its last legs and will need a major refurbishment.
Check to make sure the ATM works – This may seem obvious- but plug the ATM in, turn it on, and test everything you can test. Most models have diagnostic functions that allow you to test the printer, the dispenser, the card reader, the keyboard etc. If something does not function- you probably shouldn’t buy it, unless you know how much it will cost to repair. For example- we constantly see ATMs on craigslist with broken keyboards, or printers. Keyboards are close to $500, and printers can be over $700. These are very expensive to repair. So unless you are buying the machine for parts….don’t buy it. Always keep in mind that the person selling it- is selling it for a reason.
What to Pay- This is the magic question that there is no certain answer. We can say that a used ATM that needs an EMV upgrade should sell anywhere from free to $1000 in that range depending on the make/ model. The best advice we can tell you is know the price of the EMV kit before you make an offer on the used ATM machine and also test the ATM to make sure everything works. With new ATMs selling for around $2100 with a 2 year warranty, it doesn’t make sense to have too much tied into a used ATM just to save a few hundred bucks.
ATM Processing
ATM processing is the function the processor handles for your ATMs. These are the companies that handle the transactions, movement of funds and electronic transactions as well as give you access to your terminals online and handle the network and banking transactions. There are several ATM processors to choose from and they all offer real time access and connection to your ATM machines. The ATM provider can help you connect to the processor for a seamless process.
The ATM processor will give you real time information and access to reporting of all of your terminals from your PC, tablet or mobile device
At ATM Brokerage we can offer you processing and help you set up installation of your first unit depending on your area of the country and service coverage through us.
Installations costs vary between $200-$500 depending on the location and the complexity of the installation, running wiring for internet/phone or electrical will typically run you more.
Contact us for great interchange rates for your ATM business if you are doing in excess of 5000 transactions per month. We work with all of the major processors including Switch Commerce and Columbus Data, which are 2 of the best.
Communication
Phone– ATMs can be connected to regular dial up phone connections although digital phone signals can be tricky so I would avoid them.
Internet– ATMs can be hardwired via ethernet/CAT5 cable straight to the machine, this is the most effective and least expensive option.
Wireless– Many operators use a wireless option where a phone line or internet hardwire is not an option to connect ATM machine. ATM Brokerage offers wireless service through our preferred network, call or email for costs.
ATM Service and repair
Service and installation
We believe its best to learn how to repair and maintain your own machines for lowest cost solution. If you need help with installation or service we have access to a national network on independent operators and we can connect you with ATM providers all over the country.
Vault Cash providers
Self Vaulted- This is where you load your own cash or borrowed cash into your own ATMs. Please us for local references in your area for repair, parts, vault cash or maintenance and connection to a whole array of ATM providers.
Outsource to 3rd party-These are 3rd party companies who will deliver cash to your machines for a cost, typically billed out on a ‘per drop/delivery’ basis or per transaction basis.
Please contact me for local references in your area for repair, parts, vault cash or maintenance
Location Types
I prefer to group ATM locations into 2 basic tiers.
Tier 1-These can be described most simply as locations any independent ATM deployer would target. Most of these locations will already have an ATM, the merchant will know about the ATM business and expect income and split from the ATM surcharge. These will be tough locations to find and secure but with a good effort and a bit of luck they can be found.
The idea here is to look for foot traffic and a captive audience that would use an ATM machine. The traffic and the audience and location do matter. For example, some very large ‘sit down’ restaurants have a ton of foot traffic although payment is made from the table and these places usually don’t need ATMs. On the other hand high foot traffic tourist area or very busy take away restaurants can make very good ATM locations.
Convenience Stores
These are obvious and most every one has an ATM. Look for independently owned. Forget about large chains; try to eliminate them during cold calling as not to waste time
Concert halls/music venues/Entertainment complexes- Depending on the foot traffic, these can be very good locations.
Strip Clubs- Fairly obvious captive audience and if foot traffic is there, these are very good locations.
Hotels– Large hotels with more 250+ rooms are great targets. Independently owned/non corporate hotels are ideal targets
Bars/nightclubs– These are good targets in the current ATM marketplace. Owners of these establishments are looking to lower their credit card costs. The easy pitch here to a bar owner is to give them an example of card use. A customer walks in, orders a single drink and wants to pay for it with a Credit card. The bar owner makes little money on this transaction and he or she knows this. The ATM in this establishment can help set minimums and force customers to pay cash for single drink orders. Cash payments lower credit card costs and potentially the owners tax burden.
Cash only- Any cash only restaurant, bar, convenience store or otherwise is an ideal ATM location.
Finding ATM locations and leads
Tier 2 – These are as lessor known locations which are typically non-corporate and tend to be locally owned. Some of these locations are not obvious targets for national deployers of ATM machines. Larger ATM operators see them as lower volume and not locations worth their time but for the smaller owner/operator these can be great locations.
Other good locations:
Bars/Taverns/Sports Bars
Hotel/Motel- Smaller than 200 rooms
Bowling Alley
Smaller Amusement Parks/fairs
Office complexes, 500+ people
Carwashes
24/7 Diners
Hair Salon/Barber- cash only or very busy locations
Liquor Stores, especially if they have convenience items, alcohol, lottery, cigarettes etc.
Movie Theatre
Nail Salon
VFW, American Legion, Elks Lodge etc., often are cash only
DMV- These can be cash only although difficult to negotiate state/government contract and slowly migrating in credit card acceptance
Fast Food/pizza and or mom and pop independently owned restaurants
Travel Stops
Tourist attractions
Outdoor installation near high traffic areas
Chinese Buffets
Finding Locations
Basic Lead generation Strategies
Contact us or buy our guide here for $99 where we show you exactly how to find locations.
What is needed for an installation?
1-Power-Somewhere to plug in the machine- ATMs are energy efficient in case someone asks.
2-Communication-The ATM requires a phone line, Internet line or wireless device to connect and handle transactions.
a-Phone line-You can utilize a dedicated or spare phone line, fax line etc. Even the busiest location will only use the line 10-12 times per day for 30-60 seconds per transaction. If the client can install a dedicated phone line and pay for the cost, the machine will function well with this set up.
b-Internet– If the merchant has internet and a router, you can run a internet line from the router directly to the ATM using ethernet cabling.
c-Wireless– The 3rd option is wireless, this is typically the worst-case situation as there are additional costs of $15-$20 per month. If you can, attempt to pass this cost or a portion of this cost through to the merchant.
3-Space How big is the ATM? Check your pamphlet for specs most are 50-56 inches high, by 15-18 inches wide by 22-25 inches deep.
ATM installation and repair
4-Security concerns What if someone tries to steal the ATM? Ask them if they have a security system. Let them know the machine will be bolted to the floor, into the cement if possible. Theft is rare although it can happen.
5-Contract- Contact us for sample contracts and agreements. The main focus in your ATM placements should be getting into the location and to try to attempt to get the installed and ATM on location. You can approach the contract whenever you have a comfort level. If I felt pushback against signing a contract I would wait and just get the machine installed and get the client their first check before even approaching. The easy way to phrase the contract is to say ‘lets have some type of agreement in writing that we are the ATM owner and we are paying you/ the merchant a split of the fee’. Preferably get a 3+ year with auto –renew contract in place. Again if the merchant will not sign a long-term contract, just get a 1 year agreement or any type of agreement in writing that you are the ATM provider.
See the Startup Checklist for a complete listing of tools required to install an ATM
A contract is typically signed between the merchant the owner of the ATM. The key items which you should make sure to include are a term or length of the contract, statement of ownership of the ATM and payout schedule whether a percentage, flat rate etc. of the surcharge.
Contracts are very important when you decide to sell a portfolio. Upon starting and building your ATM business contracts may not seem important although as you grow you will want to ensure that you have contracts in place.
Term– I prefer to write contracts for 3 years with some type of auto renew clause as long as that is legal in your state, please consult with local attorney before proceeding with auto-renew contracts as they may not be enforceable or legal in the state you reside.
Statement of ownership– Be sure your contract states that you are the owner of the ATM if you indeed are the owner. This will protect you in cases where a merchant sells a location to a new owner and an attempt to claim ownership could be made. This will also protect you in cases where a merchant either goes out of business or the business is shuttered for some reason. You will want to make sure you can prove ownership of the machine in these cases. This is also an easy way to tell the merchant that you need something on paper.
ATM banking and capital requirements
Banking and capital requirements
Banking in the ATM business has become a larger concern with some governmental regulations which did not necessarily target the ATM business although have had some effect. I would advise you to engage with your local bank and ask them about supporting an ATM business. They will likely have several questions for you around your cash needs. This can be calculated based on your projections. Please contact us for local references in your area for banking and or vault cash.
Capital requirements- Based on my experience I would calculate your cash requirements in this manner.
Take the number of projected transactions. After analyzing data on thousands and thousands of ATM locations, I will tell you the average number of surcharge withdrawal transactions across the board is anywhere from 100-150 transactions per month. Of course, some locations are much higher with 300+ transactions and some can be lower with fewer than 100. Unless you are receiving 100% of the surcharge and your fee is set high, a location with less than 50 transactions can be tough to make a good income on.
Given the 100-150 total monthly withdrawals, I have also seen a national average of around $70 per withdrawal.
Given these 2 averages, your capital requirements are going to average $7,000-$10,000 per month. Projecting a weekly cash load this type of machine will require around $2000-$3000. I think planning on $2000-$3000 per location, per week for vault cash is a safe bet. If you run into a unique location or a very high volume location, you will need to up the number although the $70 per withdrawal is a good number to use.
3rd Party/Armor Truck costs
Here are several costs to continue when considering the outsourcing of the cash vault services
Cost of cash– cash loans are available for 3-4 points over Prime Rate depending on the volume of the portfolio and the provider along with a several other factors
Insurance– $25 insurance on vault cash per location
Additional fees– .03-.05 cents per transaction for cash management
Cost of armored courier– approximately $65-$85 per trip
Sample costs:
# of ATM Machines: 1
# of Transactions per ATM per Month: 300
Interest Rate on Cash Float Prime+4 @ 8.5%
Amount of Cash Withdrawal per Trans: $60.00
Income
Transactions Surcharge Per Transaction: $3.00
(300 transactions x $3.00)
Total Income: $900.00
Estimated Expenses
Cash Interest on loan: $127.50
Armored Courier $80.00
Insurance $25.00
Supplies $5.00
Cash Management Fee (0.03) $15.00
Total Expenses $252.50
Estimated Profit before merchant commission
Net monthly profit: $647.50
Again, contact me for local references for vault cash and or maintenance and specific questions around 3rd party vault costs
EMV– See below for a detailed description of EMV as well as make and model upgrade costs or replacement. Machines and locations where a complete replacement is a requirement may make good targets for marketing. As 2016 approaches the deadline becomes closer, October of 2016 and October of 2017 are the 2 deadlines for acceptance of the EMV standard and fraud liability shift..
Here is a guide with make/model upgrade or replacement costs for EMV. If you are able to target locations where non EMV upgradeable machines are located, you may have some luck replacing those machines if merchant owned or out of service and potentially abandoned by another provider.
Mobile Locations– Mobile locations or events are good ways to make additional income if you are up for the extra work involved in these events. Many ATM operators are not interested in the mobile events and therefore many of these smaller events can be open. Look for larger events in your area such as farmers markets, fairs, sporting events, music events etc. You can also typically charge a higher fee on these transactions of $3.00-$4.00 or more depending on the event and the value of the cash on site. If you can find one, two or tree day events where you are seeing 100+ transactions per day, this can be a compelling strategy.
Here is a sample of the simple basic one page marketing flyer I use. You can also add EMV compliancy verbiage or documents to the marketing materials if you prefer. Along with a business card and the spec sheet of the machine you are deploying, this is all you need to bring with you on sales calls. Leave these items behind and handle follow up calls appropriately.
Potential income from ATM machines
Potential Income and Expenses
Please use this information as a guide based on my experience of operating 500+ locations, selling 100+ portfolios and analyzing thousands of locations and terminal reports, surcharge revenue, interchange income, merchant commission and variable expenses.
Here is a layout of per terminal income and expenses you can expect to see on average. Income and expenses are highly variable depending on location type, volume, regional area of deployment and other overhead. Please keep in mind these are averages only.
Income
Surcharge revenue– with average surcharge fees running anywhere from $2.50-$3.00, this is the amount you should expect to be able to charge on a per transaction basis.
Interchange income- You should expect to make anywhere from .05 -.20 cents depending on volume and ISO/processor arrangement
Merchant commission– You should expect to pay anywhere from .50-$1.00 per transaction depending on location, volume, region and negotiating skills.
Transactions– You should expect on average anywhere from 75-150 transactions on average for new deployments, depending on location, region and foot traffic. Of course there are outliers here and you could land an account which develops into a machine with 300-400 or even more monthly transactions, although I would not count on this number to factor potential income.
Given these averages here are some expectations utilizing an average surcharge fee of $2.75 and a merchant payment of .75 and interchange income of .15 cents. This would give you a ‘net’ after paying your merchants an average income of $2.15
75 transactions x $2.15=$161.25
150 transactions x $2.15=$322.50.
I normally tell new entrants to shoot for netting $200 per month per terminal as I have seen this on average for thousands of terminals, again with regional variances.
Expenses
Outside of merchant commission, there are several variable expenses to consider and here are a few:
Initial equipment costs- See equipment section for more details
Receipt Paper, Parts, Repair- this is a highly variable cost depending on location, use, repair schedule, age of the machine, etc. A case of Receipt paper with 8 rolls cost approximately $50. A medium to high volume location is going through no more than one roll per month. Slower locations may go through one roll per quarter.
Fuel- this is a highlyvariable cost dependent on your vehicle type, frequency of cash loads/service and geography of route
Cost of Capital-Another variable cost dependent on the structure of a loan or access to the capital, please make sure you consider this cost then making your investment decision.
Communication costs- This cost is not always a concern as discussed in the communication section, if you take advantage of the merchants internet or phone line there is no additional cost. If you have a wireless router in place, expect to pay between $10-$20 per month.
Vaulting costs
Self vaulted, owner vaulted
3rd party vaulted
Vehicle maintenance- highly variable
Basic business expenses– cell phone, postage, checks, website maintenance etc.
For any other questions or concerns or to buy an ATM machine or start an ATM business, just call us or send us an email!
Testimonials for ATM Brokerage:
“ATM Brokerage simplified everything for me when deciding which company to purchase my first ATM this past August. Bryan made everything so simple in comparison to other companies I had initially reached out to. Many companies would waste my time on hold and not answer. ATM Brokerage simplified the purchase of the machine through a quick online payment, the paperwork to get your back office started, scheduling for install and defining all the terms as easy as possible to understand. I didn’t feel like I was being sold a product, I felt like I was being helped out on starting my business. The communication is great because I can even text them when I have a quick question which helps because you feel the relationship form rather than reaching out to a customer service or sales agent. The wireless internet option they offer sealed the deal for me, since margins are so tight paying so much for a wireless router can hurt the profits of each machine.”
Oscar Alcala San Jose, CA
“With many months of research and asking countless questions to other small atm business owners I found ATM Brokerage was the best place to purchase all of my equipment and to host my account. ATM Brokerage is extremely fast with their response time. They had spent countless hours helping me research, answering questions about the business, all the way down to finding the right contractor to help install the machines.
ATM Brokerage response time and help with all issues so quickly is extremely important to me because I am brand new to the industry and any down time is money out of my pocket. I promise you will not find better customer service anywhere else! They were extremely patient in answering all of my questions that are common sense for the industry. If you’re new to the industry or been in your entire life, this is the team you want to work with. ”
Jeffrey Kohl Chicago, IL
“We have loved working with ATM Brokerage. They have always been responsive and willing to help whatever the situation. Our team members enjoy a free surcharge ATM because of the easy process we used to acquire our ATM and the continued high-quality support we receive from ATM Brokerage. ”
Matthew S. – Corporate Office, Michigan
“I first met Jeff Sosville with ATM Brokerage a couple years ago when he brokered a deal for me to buy an ATM route of several ATMs in Phoenix. Jeff was extremely professional and made the whole transaction run smoothly. Since then, I have gotten to know Jeff and wound up processing with him. Jeff has also forwarded some business to me. His office is extremely responsive whenever I have a question or concern. I have recommended others to his service. I highly recommend Jeff and ATM Brokerage!”
Bridget H. – Shamrock Industries
“Thanks for all your hard work and dedication getting my deal closed! Jeff Sosville had great advice through out the buying process! Very professional! ”
Ryan D Dallas TX
“Jeff, thanks so much for your effort to sell my business. You brought me great qualified prospects. I got a better price than I was expecting. When I’m ready sell my next business, you’re my first call. ”
Kevin, FL
“Jeff has been very professional and especially diligent in securing information to make informed buying decisions. I couldn’t recommend him more highly. ”
Gary B Wisconsin
“I enjoyed working with Jeff Sosville throughout the sale of our ATM company in Phoenix. Jeff was professional throughout the process and maximized the sales price that we got for our portfolio by strategically providing information to multiple potential buyers and then timely working with them to close the best offer.”
Greg H Phoenix, AZ
Jeff was instrumental in finding a qualified buyer for my ATM Route. More importantly his background and vast knowledge within the ATM industry coupled with his expansive network was vital in connecting a buyer from outside the industry and making that buyer feel comfortable throughout the purchasing process. A normal business broker simply can’t explain intrinsic programming details, differences between ISOs or avenues to secure new locations. Jeff can because he has done it and this is what sets him apart when selling an ATM Route.
Ed Tampa, FL
Jeff Sosville recently sold a portion of my ATM business. He is very professional and a pleasure to work with.His experience in the ATM industry as a former ATM operator, along with successfully brokering many route sales proved to be tremendously helpful throughout the sales process. His vast network of potential buyers is unmatched and was a major factor in getting the best price for my business. I will turn to Jeff again when the time comes to sell the remainder of my ATM route.
Bob P, Daytona Beach, FL
“I contacted Jeff to assist me in selling a portion of my ATM business. Jeff has a deep understanding of the industry and was able to not only get me my asking price quickly but was additionally instrumental in helping with the transfer to the new owners. I would highly recommend Jeff Sosville for ATM Route Sales, he is a professional and results oriented. ”
Harold S Daytona, FL
https://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.png00Jeff Sosvillehttps://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.pngJeff Sosville2024-01-23 08:00:002024-04-22 05:42:448 Mistakes to avoid when Starting an ATM business
Selling your ATM portfolio? Here’s what buyers are looking for
While they have the acumen and attitude to start and run a business, what most business owners lack is an exit strategy. Here are answers to the questions IADs ask most frequently about the valuation and sale of their ATM business.
Like all entrepreneurs, ATM owners and operators get into the business to make money. Many purchase a few machines, find a few available locations and get started, eventually growing their startup into a full-fledged business.
But while they have the acumen and attitude to start and run a business, what most business owners lack is an exit strategy. The most frequently asked questions ATM operators are about the valuation and sale and exits of their business and subsequent exit from it.
To get answers to these questions, Alicia Blanda, CEO of Blanda Marketing, sat down recently with Jeff Sosville, of ATM Brokerage, a company that buys and sells ATMs and ATM routes, and helps IADs with the valuation and sale of their ATM portfolios.
Q: Would you say the market for ATM portfolios is more favorable to buyers or sellers?
A: Great question. I think it is a little of both at the moment — possibly hedging slightly toward a buyer’s market. On the “buy” side we are seeing nice opportunities due to traditional reasons such as relocation, retirement, etc. There are some ATM portfolios out there where operators have decided to sell rather than invest in EMV upgrade, though there are not too many of those left.
Sad to say, there are some owners who feel forced to sell right now due to the continued crackdown from government regulations and related banking regulations. This is a bit of a tricky time as we are seeing new entrants having a difficult time establishing banking relationships. Due to these challenges, the likely buyers are primarily established insiders who tend to drive valuations down.
On the “sell” side, the ATM market and business is still strong. There are many established ATM companies looking for acquisition targets and there are also new entrants looking to get into the ATM business.
I am a strong believer in the long-term value of the ATM industry and think it is an immediate cash-flow business that can be grown fairly easily and is fairly low-risk. The risk is mitigated through multiple locations so an owner can lose a location and, typically, not lose an entire business for any reason.
Q: How has EMV changed the buying and selling of portfolios?
A:Last year we received quite a number of inquiries from ATM business owners who were considering selling due to EMV. Some of these did sell and some, after walking through a valuation, decided to make the upgrade and hold onto their business.
EMV continues to be an issue and, currently, we are writing in discounts or credits for EMV upgrade into the valuations. If a seller decides to sell and has not upgraded, we typically consider those costs in the sale and credit the buyer for some EMV costs.
Q: Can you explain some of the variables that buyers are or should be looking for when purchasing an ATM portfolio?
A:When purchasing an ATM business, there are several factors to key in on:
Thinking about Selling Your ATM Portfolio? Here’s What Buyers are Looking for Today
CEO at Blanda Marketing & Public Relations
We sat down withAofATM Brokerageto pick his brain about portfolio valuation, the state of the market and the variables involved when purchasing or selling part or all of an ATM business.
Like any business, ATM owners and operators (IADs) enter the business for the purpose of making money. Many purchase a few machines, find a few available locations and get started, eventually growing their business into a full-time business. Despite the business acumen and go-getter attitude required to get started, what most business owners — no matter the industry — fail to consider is an exit strategy. In fact, one of the most asked and most popular questions for ATM operators are about the valuation, sale and exits of their business.
Q: Would you say the market for ATM portfolios is favorable to buyers or sellers?
A: Great question. I think it is a little of both at the moment — possibly hedging slightly toward a buyer’s market. On the “buy” side we are seeing nice opportunities due to traditional reasons such as relocation, retirement, etc. There are some ATM portfolios out there where operators have decided to sell rather than invest in EMV upgrade, though there are not too many of those left.
Sad to say, there are some owners who feel forced to sell right now due to the continued crackdown from government regulations and related banking regulations. This is a bit of a tricky time as we are seeing new entrants having a difficult time establishing banking relationships. Due to these challenges, the likely buyers are primarily established insiders who tend to drive valuations down.
On the “sell” side, the ATM market and business is still strong. There are many established ATM companies looking for acquisition targets and there are also new entrants looking to get into the ATM business.
I am a strong believer in the long-term value of the ATM industry and think it is an immediate cash-flow business that can be grown fairly easily and is fairly risk averse. The risk is mitigated through multiple locations so an owner can lose a location/gain a location and, typically, not lose an entire business for any reason.
Q: How has EMV changed the buying and selling of portfolios?
A:Last year we received quite a number of inquiries from ATM business owners who were considering selling due to EMV. Some of these did sell and some, after walking through a valuation, decided to make the upgrade and hold onto their business.
EMV continues to be an issue and, currently, we are writing in discounts or credits for EMV upgrade into the valuations. If a seller decides to sell and has not upgraded, we typically consider those costs in the sale and credit the buyer for some EMV costs.
Q: What are buyers looking for — or should be looking for — when purchasing an ATM portfolio?
A:When purchasing an ATM business, there are several factors to key in on:
Equipment— What is the status, age, make, model and EMV upgrade status? Is there one manufacturer or are there multiple manufacturers within the fleet? Maintenance on a new and upgraded portfolio with a single manufacturer is ideal.
Contracts— Does the owner have contracts in place with their merchants? If so, how are the contracts written?
End dates and automatic renewal clauses are important. The quality and validity of the contracts is important as well as the ability for the contract to be assigned to a new owner.
Financials — The overall profit and loss as well as the current state of the business are essential. Is the business being run as owner-operator, fully outsourced, or processing only?
We look at the details of the surcharge revenue, surcharge per transaction, interchange income and related buy rate. How much commission and merchant splits are being paid? How much margin is left after the owner pays their merchants?
Then it is important to review other expenses such as communication costs, fuel, parts, paper, labor, payroll and other expenses to fully understand what the business earns on an annual basis.
Locations and Geography— Business location as well as ATM locations and relationships are important. Is there one large c-store chain with accounts or are they all independent locations?
What types of locations are included in the portfolio — bars, taverns, c-stores, hotels? Where in town are they located — inner city, rural, suburbs?
Then we look at the compilation of the route. Is everything in a 30-mile radius or is the portfolio a mix of locations over a much larger area? Time to service the route is key and a route with 20 locations within a 10-mile radius that can be serviced in five hours versus a 20-location route spread over a wide radius can make a big difference in valuation.
Q: What advice would you give an IAD who is looking to sell?
A: Buyers are looking for new, upgraded and well-maintained equipment. I recommend getting your equipment upgraded and EMV-compliant. Also, if you have machines that are reaching the end of their life, consider upgrading the fleet.
Get all locations under contract — aiming for three to five years with an automatic renewal clause. Contracts on all locations and longer terms will keep your valuation in the higher range.
Get your books in order! I cannot stress this enough. The No. 1 reason one portfolio sells over another is the presentation and organization of the books. Clean and organized, well presented books and financials make a world of difference when selling the business.
Lastly, take a good look at your numbers and locations and do your best to get rid of poor performers. Move the locations as close to home as possible and think about risk aversion. Don’t put all your eggs in one basket with one key client.
While there many more things that go into a complete portfolio valuation and the sale of ATM businesses, these key factors are a good jumping-off point for any entrepreneur looking to buy or sell all or part of their ATM portfolio.
https://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.png00Jeff Sosvillehttps://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.pngJeff Sosville2023-05-11 13:13:072023-05-11 13:13:07ATM Brokerage interview in ATM Marketplace
You don’t have to start a business from the ground up—or say goodbye to work-life balance—in order to be a successful entrepreneur.
PHOTO ILLUSTRATION BY FORTUNE; ORIGINAL PHOTO BY GETTY IMAGES
For many, becoming a business owner is a key component of the American Dream. It means flexibility in how you spend your day, control over business decisions, and hopefully, a path to long-term wealth and financial independence.
But you don’t have to start a business from the ground up—or say goodbye to work-life balance—in order to be a successful entrepreneur. Whether you’re looking to earn some extra side income or quit your nine-to-five for good, buying an existing business that essentially runs itself could be the answer.
“One of the biggest pros of owning a passive income business is the possibility of growth and the creation of franchise value,” says Ben Johnston, chief operating officer at Kapitus, a small business financing firm based in New York. “Should a business grow and prove sustainable for the long-term, the owner may be able to sell it for multiples of what it produces in annual income.” Additionally, Johnston says, if you do decide to become more active in the daily management of the business down the line, you could replace some of the overhead cost of other management and earn greater returns in exchange for your time.
7 side hustles that require little day-to-day involvement
The key to starting a successful, self-sustaining business is creating a solid foundation. That means investing the necessary time and resources upfront, which could mean buying high-quality equipment, securing customers, and, if necessary, hiring support staff.
While the income from owning a business is rarely 100% passive, there are certain businesses that practically run on autopilot once you build that foundation. So if you’ve saved up a solid initial investment (or qualify for financing) and are looking for a source of ongoing income, consider these low-maintenance business ideas.
1. Take over a laundromat
One of the biggest draws of owning a laundromat is that these businesses are considered recession-proof, since they provide an essential service. According to analysis by the Coin Laundry Association, coin-operated laundromats typically range in market value from $50,000 to more than $1 million. Additionally, they can generate between $15,000 and $300,000 in cash flow per year.
The startup costs for a laundromat can be quite high, however, which is why many people opt to purchase an existing business. You can find laundromats for sale on business listing sites or through brokers. Laundry equipment distributors may also have insider information on local businesses and can connect you with owners who are considering selling. When it comes to investing in an existing laundromat, a general rule of thumb is that it’s worth four to six times the annual net revenue.
2. Buy an automatic car wash
With the right preparation, another business that can essentially run itself is a self-serve or automatic car wash. These businesses are relatively easy to manage, as customers perform the labor using existing equipment. There are few, if any, employees required, as well as minimal inventory and maintenance.
For those reasons, owning a car wash can also provide excellent return on investment. A 2022 survey conducted by Auto Laundry News, a car wash industry publication, found that the average monthly income for a self-service car wash was $1,975 per bay.
Again, the success of your business will depend on many factors. Oasis Car Wash Systems notes that a couple of the biggest considerations when choosing a car wash business include traffic and accessibility. You should aim for a site that sees at least 1,000 to 3,000 cars per day, and is highly accessible and visible from the street (think corner lot, multiple driveways, and separate entrances and exits).
The cost of buying a self-serve or automatic car wash ranges quite a bit. It’s possible to purchase an existing business for under $100,000, while locations in high-cost-of-living areas can run into the millions.
3. Set up a vending machine route
If you’re looking for a passive-income business with a lower barrier to entry, consider investing in vending machines. The costs involved in starting a vending machine route are essentially just buying the machines and stocking them with inventory. From there, all you have to worry about is occasional maintenance, as well as restocking and collecting money from the transactions.
This is another business that relies heavily on location for success. You’ll want to work with businesses to place your machines in high-traffic areas such as office buildings, malls, hospitals, schools, and the like. And the more vending machines you own, the more your profit margins stand to improve, since you’ll be able to qualify for wholesale discounts on inventory and the route will become more efficient in general.
It’s possible to purchase vending machines used for less than $1,000. New ones will run $3,000 or more, especially for modern machines with features such as card readers or touch pads. However, with the right products and placement, you should be able to recoup that cost fairly quickly. eVending claims that its machines can be paid for by selling seven to 10 products per day at an average profit of 50 cents per product.
4. Place ATMsinstrategic locations
Similar to a vending machine business, you can earn income by setting up a route of ATMs. When patrons pull out cash, they pay a surcharge to use the machine, and you get a cut of that fee. One ATM location that gets 80–100 transactions per month produces about a 40%–70% annual return on investment.
You’ll want to find locations that get a lot of foot traffic, especially from people who may need cash on hand. That can include grocery stores, casinos, gas stations, bars, restaurants, and clubs. It’s also a good idea to choose locations that are well-lit, highly populated, and monitored so that people feel safe using your ATMs.
ATM Brokerage notes that smaller routes require only basic maintenance, including filling the machines with cash and making sure the receipt paper is full. Installation costs can run between $200–$500, depending on the location and complexity. As for the machines themselves, a new, free-standing ATM costs around $2,000 to $3,000, though you can find used ones for around $1,200. Keep in mind that you’ll need to have a lot of cash flow to maintain a fleet of ATMs, as each one typically goes through about $6,000–$8,000 per month.
5. Buy a successful blog
Blogging is a business that requires little overhead, though it can take months or years to create high-quality, original content that generates lots of page views. The good news is that you don’t have to start a blog from scratch. There are plenty of successful blogs in place that are already generating revenue—whether it’s through affiliate links, display ads, sponsored content, et cetera—and may be available for purchase on a marketplace like Flippa for as little as a few hundred dollars.
The older and more established the site, the better chance it has of generating ongoing passive income (and the more expensive it will be to buy). Your earnings will also depend on the blog’s subject matter. Google, for example, estimates that a beauty and fitness blog that receives 50,000 monthly page views could generate about $7,800 in Adsense revenue per month. On the other hand, a science blog with the same amount of traffic would bring in about half of that.
6. Rent out billboard advertisingspace
Selling ad space on a billboard you own is about the closest to a 100% passive-income business there is. That’s especially true if you already own land where you can put up your billboard (keep in mind that you may have to adhere to local zoning laws and/or obtain a special permit).
The startup costs to build one can range considerably. For a single-faced wood billboard, you may spend anywhere from $5,000–$20,000 to have it constructed, depending on the exact size and height. However, these costs may be well worth it if you have a great location. On the low end, advertisers in a rural town may pay around $250 per month for a classic billboard campaign. But if your billboard is located in a major city, you could charge $14,000 or more per month.
7. Invest in a self-storage facility
Often categorized as a niche real estate investment, another business that doesn’t take much day-to-day oversight is a self-storage facility. From 2009 to 2018, self-storage facilities averaged an annual ROI of 16.9%, which is higher than any other type of commercial property, including office, industrial, retail, and apartments.
Storage facilities are also inherently low-maintenance, since the steel buildings are durable and require little upkeep. And with the help of technology such as kiosks, specialized surveillance, and web-based contract management, there’s no need for anyone to be on-site. However, if you aren’t interested in becoming the owner of a storage facility, you can also choose to be a passive investor in someone else’s business.
The takeaway
There are many ways to make money on the side, from picking up a small side hustle to launching a new business. If you’re looking for something in between and don’t want to spend a ton of time, money, and effort keeping your side income flowing, consider a business that (almost) runs on autopilot. If you go this route, it’s crucial to do your due diligence, crunch the numbers, and invest in a business that can have long-term success.
EDITORIAL DISCLOSURE: The advice, opinions, or rankings contained in this article are solely those of the Fortune Recommends™ editorial team. This content has not been reviewed or endorsed by any of our affiliate partners or other third parties.
https://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.png00Jeff Sosvillehttps://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.pngJeff Sosville2023-05-11 13:10:312023-05-11 13:10:317 side hustles that (almost) run on autopilot (Fortune Magazine Article)
Starting or Re-Tooling An ATM Business – What You Must Do
In spite of the advances in electronic, digital and alternative payments, cash is still a preferred means of paying for goods and services throughout the world. Recognizing this fact has prompted many entrepreneurs to strike out on their own and enter the ATM industry as independent owner/operators. If you are thinking about starting an ATM business, or are looking to make adjustments to your present business model, here are 7 things you must ensure are part of your process in order to maximize your chances for success.
1. Make a plan
As with any business, you will want to have a plan. Are you going to offer full service, processing only, or a mix? What is the niche you targeting? Bars, hotels, convenience stores, or something else? Going after high margin lower volume accounts or targeting high volume and potentially lower margin accounts? Decide how you are going to deploy, where you wan to be located and what your business focus is. Set a plan and potentially talk to an expert. Find out how, here Start an ATM Business
2. Understand the business
Do some research, talk to as many people as you can. Read and look into information online about how to start and grow an ATM business. Talk with processors, ISOs, merchants, retailers, consultants etc. This way you will have a complete and clear understanding of the ATM business. Read our FAQ here!
3. Find a bank
With rules and regulations hitting the banking sector, it’s a good idea to talk to your bank and/or locally recommended banks and set up your relationship. Banking Guidance here!
4. Find a processor
Look into and research ATM processors and offerings. If back office support important, then ask about that. Is web portal technology key for you? 24/7 technical support and service? What is the interchange and or buy rate? If you don’t know what these things are, find out. With our sister site, ConnectATM, we can help you with ATM Processing and ATM equipment!
5. Get signed contracts
Make sure when setting up relationships with merchants that you obtain a signed contract or agreement. The agreement should state the ownership of the ATM as well as the surcharge and split to the merchant. Try to get merchants to sign 3+ year contracts or minimally one-year recurring agreements. The key thing is to have something in writing.
6. Stick to one manufacturer
There are 4 main manufacturers in the independently deployed ATM industry. You should choose one and stick with it. This way, you know your machines and you understand how to repair and replace parts and you can substitute parts when needed. If you end up purchasing from many different manufacturers, your costs and learning curves go up exponentially. To find out more about equipment, ATM Processing and Wireless ATM services, check out our sister company, ConnectATM
7. Build your route with logistics in mind
Keep your locations as close to home as you can. The closer to home and to each other your locations are; the easier and less costly they are to service.
In many places the ATM is referred to as a cash machine. Turn your ATM business into a fleet of cash machines by following these proven steps to success.
If you have any questions, give us a call or send us an email and we are happy to help!
https://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.png00Jeff Sosvillehttps://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.pngJeff Sosville2019-11-07 01:02:192019-11-07 17:28:58Starting an ATM Business? 7 Things You Must Do!
Owning and maintaining ATMs is a way many people earn a living and create additional or passive income streams.
As an owner of an ATM business, you are buying ATM machines, finding locations and installing them in locations, filling them with cash and making money every time a customer withdrawals money from the machine. Once the money is taken out of your ATM it is re-deposited into a bank account of your choice on a daily basis along with the surcharge fees. A portion of the surcharge fee is typically paid to the merchant in the form of a commission or split. Additional revenue can be made on each ATM transaction in the form of interchange. All your machines can be monitored online through a portal where you can see real time information about how much cash is in each machine and how many transactions and fees have occurred.
Industry Statistics
Total number of ATMs in the US- 425,000 (source-National ATM Council)
Here are some basic things you will want when purchasing new machines:
1k Removable cassette-This is a 1000 note removable cassette which allows you to either buy an extra cassette and swap cassettes when vaulting machines or remove cassette and add cash in a private or more secure location.
Electronic Lock- most of the locks for the safe come standard e-lock although some still have a dial lock as base and most operators upgrade to the e-lock for an additional small cost. Audit Lock (single use Armor truck requirement) can add $300-$400 to the lock cost
EMV (Europay, master card, Visa) ready– Please ensure your machine is EMV ready as this is the standard as of 2017
You should attempt to select a manufacturer and stick with it if building portfolio or organizing multiple locations. This will enable you to streamline your knowledge and order parts more easily and eventually have spare parts on hand.
ATM Parts and Replacement costs:
Most new ATMs come with a 1-2 year warranty on parts and most repairs on ATMs can be handled easily with minimal knowledge of ATM repair and technology skills. Data on related repair breakdowns are not readily accessible as far as I am aware although I am working on gaining more knowledge in this area.
Here is a general layout of the parts on an ATM
Shell– The exterior of the ATM, can be purchased without the dispenser.
Topper– Adds potential advertising space for the ATM, a topper upgrade is around $50-$100 on a new machine
Safe– Safe and safe door where vault cash is contained
Lock– There are 3 main lock types, Dial Lock (standard) Electronic Lock ($50 upgrade), Audit Lock- one time use Armor truck ready ($300-$400 upgrade)
Dispenser– This is the area where cash is stored and dispensed. The most expensive part to replace and is typically repaired rather than replaced. Standard issue is fixed cassette. A 1000 note removable cassette normally adds $50-$100 depending on the retailer. New single cassette dispensers run around $800-$1000
Cassette– 1000 note removable is typical issue although 1700 not cassettes, dual cassettes and more are available. A removable cassette is normally a $50 upgrade on a new machine. Spare 1000 note cassettes run around $400
Screen– The exterior screen for customer use, can be touch or just visual screen, most screen replacements run $200-$300.
Main-board– Most main board with modem are $650-$700 replacement
Card Reader– EMV is new and latest standard. Most ATMs built in the last 5 years can be upgraded to EMV fairly easily and with relatively low expense ($275-$400)
Modem board– Usually located on main board although can be separate, run around $125
Printer– A printer assembly runs around $600-$700
Keypad– typically a $400-$500 part for newer ATMs
Power Supply– To replace a power supply on an ATM runs around $300-$350
Wireless– Many options exist for wireless devices and these typically run around $15-$20 per month for a lease or $275 to purchase the box and $5 per month for the connection to the wireless provider
We are able to provide machines at cost and usually meet or beat any of the competitors out there, please call us for ATM pricing and ATM machine recommendations.
ATM Signage, ATM receipt paper and ATM parts and repair can all be ordered through www.connectatm.com
Tips for buying used ATMs
Compliance – Probably the most important factor when buying a replacement ATM is making sure the ATM is compliant with todays standards. The ATM should be ADA compliant, meaning that it should have a headphone jack, and its highest touch point be no higher than 48″ off the ground. Secondly- EMV compliance or EMV upgradable. If you are buying a used ATM, most likely you can assume it is not EMV compliant. That’s fine- as long as an upgrade kit is available for a price that makes sense.
Know before you buy– ATM standards change so quickly that the manufacturer’s had to adopt new technology quickly. As a result you may have one particular model that was made for a number of years- but that model was different year one, than the last year of production. Models of the same product line can not be upgraded, where others can be. For example the most popular used ATM in the US today is the Hyosung MB 1500. An upgrade for this unit is available however it is close to $1000. So you wouldn’t want to pay more than a few hundred dollars for this machine if it is not EMV compliant already. Secondly- the 1500 has two keyboard versions. The older style used ATM (with the enter key on the bottom right) is not upgradable. The newer style is. So it makes sense to know before you buy- what you are buying. If you have any questions- please by all means give us a call. We don’t like to be the ones to tell you that the used ATM you just purchased is not upgradable and you just wasted however many hundreds of dollars. Another popular model is the 1800. This model had three versions, the 1800, 1800SE, and 1800CE. The 1800 is not upgradable for EMV where the SE and CE are, however all three look the same to the unknowing buyer.
Age and Condition– The old saying you cant judge a book from its cover does not apply when checking the condition of a used ATM machine. The used ATM should look slightly worn, all rubber parts in the cash dispenser should be firm, not soft or spongy. Check the manufacturer build sticker to get the manufacturing date. ATMs are built to last approximately 7 years with normal usage however most last longer. So a 10 year old ATM is on its last legs and will need a major refurbishment.
Check to make sure the ATM works – This may seem obvious- but plug the ATM in, turn it on, and test everything you can test. Most models have diagnostic functions that allow you to test the printer, the dispenser, the card reader, the keyboard etc. If something does not function- you probably shouldn’t buy it, unless you know how much it will cost to repair. For example- we constantly see ATMs on craigslist with broken keyboards, or printers. Keyboards are close to $500, and printers can be over $700. These are very expensive to repair. So unless you are buying the machine for parts….don’t buy it. Always keep in mind that the person selling it- is selling it for a reason.
What to Pay- This is the magic question that there is no certain answer. We can say that a used ATM that needs an EMV upgrade should sell anywhere from free to $1000 in that range depending on the make/ model. The best advice we can tell you is know the price of the EMV kit before you make an offer on the used ATM machine and also test the ATM to make sure everything works. With new ATMs selling for around $2100 with a 2 year warranty, it doesn’t make sense to have too much tied into a used ATM just to save a few hundred bucks.
ATM Processing
ATM processing is the function the processor handles for your ATMs. These are the companies that handle the transactions, movement of funds and electronic transactions as well as give you access to your terminals online and handle the network and banking transactions.
The processor will give you real time information and access to reporting of all of your terminals from your PC, tablet or mobile device
At Connect ATMwe can offer you processing and help you set up installation of your first unit depending on your area of the country and service coverage through Connect ATM.
Installations costs vary between $200-$500 depending on the location and the complexity of the installation, running wiring for internet/phone or electrical will typically run you more.
Interchange net income should be anywhere from $.10-.20 per withdrawal transaction depending on the total number of transactions. Contact us for great interchange rates
Communication
Phone– ATMs can be connected to regular dial up phone connections although digital phone signals can be tricky so I would avoid them.
Internet– ATMs can be hardwired via ethernet/CAT5 cable straight to the machine, this is the most effective and least expensive option.
Wireless– Many operators use a wireless option where a phone line or internet hardwire is not an option to connect ATM machine. ATM Brokerage offers wireless service through our preferred network, call or email for costs.
Service and installation
We believe its best to learn how to repair and maintain your own machines for lowest cost solution. If you need help with installation or service we have access to a national network on independent operators we can connect you with.
Vault Cash providers
Self Vaulted- This is where you load your own cash or borrowed cash into your own ATMs. Please us for local references in your area for repair, parts, vault cash or maintenance
Outsource to 3rd party-These are 3rd party companies who will deliver cash to your machines for a cost, typically billed out on a ‘per drop/delivery’ basis or per transaction basis.
Please contact me for local references in your area for repair, parts, vault cash or maintenance
Location Types
I prefer to group ATM locations into 2 basic tiers.
Tier 1-These can be described most simply as locations any independent ATM deployer would target. Most of these locations will already have an ATM, the merchant will know about the ATM business and expect income and split from the ATM surcharge. These will be tough locations to find and secure but with a good effort and a bit of luck they can be found.
The idea here is to look for foot traffic and a captive audience that would use an ATM machine. The traffic and the audience and location do matter. For example, some very large ‘sit down’ restaurants have a ton of foot traffic although payment is made from the table and these places usually don’t need ATMs. On the other hand high foot traffic tourist area or very busy take away restaurants can make very good ATM locations.
Convenience Stores
These are obvious and most every one has an ATM. Look for independently owned. Forget about large chains; try to eliminate them during cold calling as not to waste time
Concert halls/music venues/Entertainment complexes- Depending on the foot traffic, these can be very good locations.
Strip Clubs- Fairly obvious captive audience and if foot traffic is there, these are very good locations.
Hotels– Large hotels with more 250+ rooms are great targets. Independently owned/non corporate hotels are ideal targets
Bars/nightclubs– These are good targets in the current ATM marketplace. Owners of these establishments are looking to lower their credit card costs. The easy pitch here to a bar owner is to give them an example of card use. A customer walks in, orders a single drink and wants to pay for it with a Credit card. The bar owner makes little money on this transaction and he or she knows this. The ATM in this establishment can help set minimums and force customers to pay cash for single drink orders. Cash payments lower credit card costs and potentially the owners tax burden.
Cash only- Any cash only restaurant, bar, convenience store or otherwise is an ideal ATM location.
Tier 2 – These are as lessor known locations which are typically non-corporate and tend to be locally owned. Some of these locations are not obvious targets for national deployers of ATM machines. Larger ATM operators see them as lower volume and not locations worth their time but for the smaller owner/operator these can be great locations.
Other good locations:
Bars/Taverns/Sports Bars
Hotel/Motel- Smaller than 200 rooms
Bowling Alley
Smaller Amusement Parks/fairs
Office complexes, 500+ people
Carwashes
24/7 Diners
Hair Salon/Barber- cash only or very busy locations
Liquor Stores, especially if they have convenience items, alcohol, lottery, cigarettes etc.
Movie Theatre
Nail Salon
VFW, American Legion, Elks Lodge etc., often are cash only
DMV- These can be cash only although difficult to negotiate state/government contract and slowly migrating in credit card acceptance
Fast Food/pizza and or mom and pop independently owned restaurants
Travel Stops
Tourist attractions
Outdoor installation near high traffic areas
Chinese Buffets
Finding Locations
Basic Lead generation Strategies
Contact us or buy our guide here for $99 where we show you exactly how to find locations.
What is needed for an installation?
1-Power-Somewhere to plug in the machine- ATMs are energy efficient in case someone asks.
2-Communication-The ATM requires a phone line, Internet line or wireless device to connect and handle transactions.
a-Phone line-You can utilize a dedicated or spare phone line, fax line etc. Even the busiest location will only use the line 10-12 times per day for 30-60 seconds per transaction. If the client can install a dedicated phone line and pay for the cost, the machine will function well with this set up.
b-Internet– If the merchant has internet and a router, you can run a internet line from the router directly to the ATM using ethernet cabling.
c-Wireless– The 3rd option is wireless, this is typically the worst-case situation as there are additional costs of $15-$20 per month. If you can, attempt to pass this cost or a portion of this cost through to the merchant.
3-Space How big is the ATM? Check your pamphlet for specs most are 50-56 inches high, by 15-18 inches wide by 22-25 inches deep.
4-Security concerns What if someone tries to steal the ATM? Ask them if they have a security system. Let them know the machine will be bolted to the floor, into the cement if possible. Theft is rare although it can happen.
5-Contract- Contact us for sample contracts and agreements. The main focus in your ATM placements should be getting into the location and to try to attempt to get the installed and ATM on location. You can approach the contract whenever you have a comfort level. If I felt pushback against signing a contract I would wait and just get the machine installed and get the client their first check before even approaching. The easy way to phrase the contract is to say ‘lets have some type of agreement in writing that we are the ATM owner and we are paying you/ the merchant a split of the fee’. Preferably get a 3+ year with auto –renew contract in place. Again if the merchant will not sign a long-term contract, just get a 1 year agreement or any type of agreement in writing that you are the ATM provider.
See the Startup Checklist for a complete listing of tools required to install an ATM
A contract is typically signed between the merchant the owner of the ATM. The key items which you should make sure to include are a term or length of the contract, statement of ownership of the ATM and payout schedule whether a percentage, flat rate etc. of the surcharge.
Contracts are very important when you decide to sell a portfolio. Upon starting and building your ATM business contracts may not seem important although as you grow you will want to ensure that you have contracts in place.
Term– I prefer to write contracts for 3 years with some type of auto renew clause as long as that is legal in your state, please consult with local attorney before proceeding with auto-renew contracts as they may not be enforceable or legal in the state you reside.
Statement of ownership– Be sure your contract states that you are the owner of the ATM if you indeed are the owner. This will protect you in cases where a merchant sells a location to a new owner and an attempt to claim ownership could be made. This will also protect you in cases where a merchant either goes out of business or the business is shuttered for some reason. You will want to make sure you can prove ownership of the machine in these cases. This is also an easy way to tell the merchant that you need something on paper.
Banking and capital requirements
Banking in the ATM business has become a larger concern with some governmental regulations which did not necessarily target the ATM business although have had some effect. I would advise you to engage with your local bank and ask them about supporting an ATM business. They will likely have several questions for you around your cash needs. This can be calculated based on your projections. Please contact us for local references in your area for banking and or vault cash.
Capital requirements- Based on my experience I would calculate your cash requirements in this manner.
Take the number of projected transactions. After analyzing data on thousands and thousands of ATM locations, I will tell you the average number of surcharge withdrawal transactions across the board is anywhere from 100-150 transactions per month. Of course, some locations are much higher with 300+ transactions and some can be lower with fewer than 100. Unless you are receiving 100% of the surcharge and your fee is set high, a location with less than 50 transactions can be tough to make a good income on.
Given the 100-150 total monthly withdrawals, I have also seen a national average of around $70 per withdrawal.
Given these 2 averages, your capital requirements are going to average $7,000-$10,000 per month. Projecting a weekly cash load this type of machine will require around $2000-$3000. I think planning on $2000-$3000 per location, per week for vault cash is a safe bet. If you run into a unique location or a very high volume location, you will need to up the number although the $70 per withdrawal is a good number to use.
3rd Party/Armor Truck costs
Here are several costs to continue when considering the outsourcing of the cash vault services
Cost of cash– cash loans are available for 3-4 points over Prime Rate depending on the volume of the portfolio and the provider along with a several other factors
Insurance– $25 insurance on vault cash per location
Additional fees– .03-.05 cents per transaction for cash management
Cost of armored courier– approximately $65-$85 per trip
Sample costs:
# of ATM Machines: 1
# of Transactions per ATM per Month: 300
Interest Rate on Cash Float Prime+4 @ 8.5%
Amount of Cash Withdrawal per Trans: $60.00
Income
Transactions Surcharge Per Transaction: $3.00
(300 transactions x $3.00)
Total Income: $900.00
Estimated Expenses
Cash Interest on loan: $127.50
Armored Courier $80.00
Insurance $25.00
Supplies $5.00
Cash Management Fee (0.03) $15.00
Total Expenses $252.50
Estimated Profit before merchant commission
Net monthly profit: $647.50
Again, contact me for local references for vault cash and or maintenance and specific questions around 3rd party vault costs
EMV– See below for a detailed description of EMV as well as make and model upgrade costs or replacement. Machines and locations where a complete replacement is a requirement may make good targets for marketing. As 2016 approaches the deadline becomes closer, October of 2016 and October of 2017 are the 2 deadlines for acceptance of the EMV standard and fraud liability shift..
Here is a guide with make/model upgrade or replacement costs for EMV. If you are able to target locations where non EMV upgradeable machines are located, you may have some luck replacing those machines if merchant owned or out of service and potentially abandoned by another provider.
Mobile Locations– Mobile locations or events are good ways to make additional income if you are up for the extra work involved in these events. Many ATM operators are not interested in the mobile events and therefore many of these smaller events can be open. Look for larger events in your area such as farmers markets, fairs, sporting events, music events etc. You can also typically charge a higher fee on these transactions of $3.00-$4.00 or more depending on the event and the value of the cash on site. If you can find one, two or tree day events where you are seeing 100+ transactions per day, this can be a compelling strategy.
Here is a sample of the simple basic one page marketing flyer I use. You can also add EMV compliancy verbiage or documents to the marketing materials if you prefer. Along with a business card and the spec sheet of the machine you are deploying, this is all you need to bring with you on sales calls. Leave these items behind and handle follow up calls appropriately.
Potential Income and Expenses
Please use this information as a guide based on my experience of operating 500+ locations, selling 100+ portfolios and analyzing thousands of locations and terminal reports, surcharge revenue, interchange income, merchant commission and variable expenses.
Here is a layout of per terminal income and expenses you can expect to see on average. Income and expenses are highly variable depending on location type, volume, regional area of deployment and other overhead. Please keep in mind these are averages only.
Income
Surcharge revenue– with average surcharge fees running anywhere from $2.50-$3.00, this is the amount you should expect to be able to charge on a per transaction basis.
Interchange income- You should expect to make anywhere from .05 -.20 cents depending on volume and ISO/processor arrangement
Merchant commission– You should expect to pay anywhere from .50-$1.00 per transaction depending on location, volume, region and negotiating skills.
Transactions– You should expect on average anywhere from 75-150 transactions on average for new deployments, depending on location, region and foot traffic. Of course there are outliers here and you could land an account which develops into a machine with 300-400 or even more monthly transactions, although I would not count on this number to factor potential income.
Given these averages here are some expectations utilizing an average surcharge fee of $2.75 and a merchant payment of .75 and interchange income of .15 cents. This would give you a ‘net’ after paying your merchants an average income of $2.15
75 transactions x $2.15=$161.25
150 transactions x $2.15=$322.50.
I normally tell new entrants to shoot for netting $200 per month per terminal as I have seen this on average for thousands of terminals, again with regional variances.
Expenses
Outside of merchant commission, there are several variable expenses to consider and here are a few:
Initial equipment costs- See equipment section for more details
Receipt Paper, Parts, Repair- this is a highly variable cost depending on location, use, repair schedule, age of the machine, etc. A case of Receipt paper with 8 rolls cost approximately $50. A medium to high volume location is going through no more than one roll per month. Slower locations may go through one roll per quarter.
Fuel- this is a highlyvariable cost dependent on your vehicle type, frequency of cash loads/service and geography of route
Cost of Capital-Another variable cost dependent on the structure of a loan or access to the capital, please make sure you consider this cost then making your investment decision.
Communication costs- This cost is not always a concern as discussed in the communication section, if you take advantage of the merchants internet or phone line there is no additional cost. If you have a wireless router in place, expect to pay between $10-$20 per month.
Vaulting costs
Self vaulted, owner vaulted
3rd party vaulted
Vehicle maintenance- highly variable
Basic business expenses– cell phone, postage, checks, website maintenance etc.
For any other questions or concerns or to buy an ATM machine or start an ATM business, just call us or send us an email!
https://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.png00Jeff Sosvillehttps://atmbrokerage.com/wp-content/uploads/2019/05/ATM-Brokerage-2.pngJeff Sosville2017-10-26 17:08:152019-06-16 23:27:51Buying ATM machines- The definitive guide
