Is the ATM Business Dying? – Why ATM Operators Are Leaving

April 29, 2024

The ATM business is not dying. However, the demand is slowly declining as more and more people are switching to cashless transactions. ATM use in the United States decreased by 4% since 2019, according to Payments Dive. This decline rate over a 4-year period is relatively low. It might not be enough to categorize the ATM biz as a dying industry. 

Research conducted by Euromonitor International showed that the number of ATM units decreased by 18,500 from 2019 to 2022. This could be an indicator that ATM operators are leaving the business. The common causes are the decreasing demand, high-risk operation, and the limited scalability potential of the business model.

People online have expressed their concern about this declining market. Some say it was a gold mine many years back. Unfortunately, the digitalization of payments has made this business less viable, though not completely dead. 

This Reddit commenter shared his personal experience in the ATM biz. According to him, one of his cash machines was stolen and there were months wherein he only made $30 to $60. 

Despite these negative feedback, there's still hope for the ATM business to bounce back. New innovations are on the rise and they bring new demand to the business. ATMs now offer more than just cash dispensing. Cash deposit, bills payments, and currency exchange can now be done over the machines. ATMs are also developed to service crypto-related transactions. This allows users to buy and sell cryptocurrencies through the machines. 

Are ATMs going out of business? This article reveals the real status of the ATM biz, including its potential and profitability in the digital age. I'll also cover the cost of starting, monthly operating expenses, some pros and cons. And real-life testimonials from people who've experienced it first-hand. 

Is the ATM Business Still Profitable? 

Yes, the ATM business is profitable. According to ACME ATM, machines in strategic locations generate around $20,000 to $30,000 per year. ATM owners make an income from transaction fees and surcharges and they accumulate quickly. This is very common in high foot traffic areas. However, some merchants, particularly in rural areas, still prefer cash payments. The ATM services market is steadily growing at a 2.5% rate and is expected to hit USD 9.54 billion by 2032. This proves its profitability potential in the next few years.

There are over 300 transactions done in a single machine each month, according to OptConnect. Taking the average surcharge fee of $2.50 to $3.00, one ATM can make from $750 to $900 gross monthly revenue. 

How Does an ATM Business Make Money?

ATM businesses make money in two ways: transaction fees and advertising. Operators earn through transaction fees on cash withdrawals or balance inquiries. The average ATM fee in the U.S. is around $4.73. This fee is made up of $3.15 surcharge + $1.58 bank charge for out-of-network ATMs. Machines also earn from ads that they flash on the screen, which is around $3,750 for each advertiser per month.  

How Much Can You Make From a Single ATM Unit Per Month?

You can make $500 per month from a single ATM unit. Independent ATM deployers (IADs) who own and operate 5-10 ATMs can expect a monthly profit of about $1,500-$2,000. This income accumulates from surcharge fees that range from $2.50 to $3.00 per transaction. You could earn from $15 to $18 daily or $450 to $540 monthly from a single machine. This is assuming you make 6 daily transactions from each ATM. 

What are the Monthly Costs of Running an ATM Business?

  • Rent or Lease Payments: If the ATM is located in a rented space, you'll need to pay a monthly rent. This also includes the rental fee if you don't own the machine, which is around $50 to $95 monthly. 
  • ATM Maintenance and Repairs: This includes services on the machines, maintenance work, and software updates. Maintenance cost on a single ATM unit is around $200 to $300 annually if it's an old unit. Brand new units usually don't incur this expense. They are usually covered by a 12 to 24-month warranty on parts. 
  • Utilities: ATMs need electricity, internet, software upgrades, and network integration. A machine that's working 24/7, 30 days a month, would incur around $3 to $6 on electricity per month. 
  • ATM Insurance: An ATM business insurance protects against loss or damage of the machine and the cash inside. Including inside theft, burglary, robbery, loss, and general liability. 

  • Marketing: Include marketing tie-ins to your monthly costs if you're using paid ads. 

Cost to Start an ATM business

  • Machine Upfront Cost: ATMs cost from $2,000 to $8,000 per unit. This varies depending on its model, functions, features, and specifications of the ATM.  You can also purchase second hand ATMs for sale online. 
  • Installation and Setup: This can range from a few hundred to a thousand dollars per machine.
  • Cash Loading: You need to load the machine from $20,000 up to $100,000 in high-traffic areas. 
  • Telecom Fees: Get a dedicated internet line for the machine to ensure seamless transaction processing. This will cost around $10 to $30. 

Factors That Affect the Success of an ATM Business

  • Increasing Use of Digital Payment Channels: ATM use is decreasing as digital payment methods become more popular. According to Forrester, over 69% of adult consumers in the United States have used a digital payment method in the last three months. This means lower business opportunities for the ATM business in areas that prefer cashless transactions.

  • Security Management: Successful ATM business follows excellent security practices. Operators should invest in high-security devices to keep their users safe and protected. According to the American Bankers Association, ATM-related crimes happen in 1 out of 3.5 million transactions (about 3,000 annually). 
  • Site Selection: Operators must choose strategic locations with high foot traffic, like parking lots and busy sidewalks. The area should be visible and accessible to get a higher transaction volume.  

Pros and Cons of ATM Business

Pros of ATM Business 

Passive income from transaction fees

Increase foot traffic to retail stores and restaurants

Low maintenance 

Suitable for different ATM locations, from bars and restaurants to gas stations and shopping malls

Cons of ATM Business 

Upfront capital for the machine, cash replenishment, and installation

Regulatory compliance may require extensive paperwork

Popularity of digital payments decreases ATM use in urban areas

Security risks like theft, fraud, and ATM skimming

What People Say About the ATM Business Online

Is the ATM Business Dying?- Reddit Comments 

People on Reddit say that the ATM business is dying. Although you can still earn a few hundred bucks, the risks outweigh the benefits. 

A former ATM business owner explained that ATMs will have the same fate as pay phones. 

Another one commented that good locations for ATMs are already taken. So, it will be hard to find profitable locations with high foot traffic. 

YouTube Testimonial: Austin Zaback Sold His Units and Got Out of the ATM Business

Austin Zaback's ATM Business

Austin used to own over 100 ATM units in barber shops, bars, swap meets, and more. He handled the day-to-day operations and negotiation with business owners. 

The Challenges that Austin Zaback Encountered in His ATM Business 

  • Scalability: Austin reached a point where he felt the business was no longer scalable. He realized the growth opportunities are much lower than other business models. 
  • Safety and logistics: The business became increasingly dangerous and complicated. Handling and transporting huge cash volumes made daily operations extremely risky. 
  • Time Consuming: The ATM business was time-consuming.  And, the daily operation was hard work. So, he listed his ATM business for sale. 

Why Austin Zaback Finally Left the ATM Business

Austin left the ATM business because it was not worth his time and hard work anymore. Opportunities were limited, it was time-consuming, and risky. The cons outweighed the pros for Austin. So, he had to leave the business and focus on real estate, which he found more scalable and profitable. 

What to Expect for the ATM Business in 2024 

  • Digital Integration: ATMs might integrate digital banking technologies. It will include features like mobile connectivity and contactless transactions. Users might also see enhanced security measures, including biometric verification: face recognition and fingerprint scanning. 
  • Expansion of Services: Wider range of services, including bill payments, currency exchange, and even loan proceeds dispensing. 
  • Cryptocurrency Functions: Bitcoin Teller Machines (BTMs) are already launched in the market.  Paul Alex offers a done-for-you (DFY) service on this called Crypto Elites Automation by ATM Together
  • Surcharge-Free Transactions: Surcharge-free transactions as customers push for less expensive ATM use.

My Better Passive Income Alternative to the ATM Business

My passive income alternative to the ATM business is local lead generation. It builds simple websites for local service providers and ranks them on Google. The sites generate leads and are rented out for recurring income. It's too early to call the ATM biz "dying", but the business potential is slowing down as the world shifts to digitalized payment channels. 

This could have been a good passive income business many years back. However, the gradual decrease of ATM units shows that operators are cautious about the declining trend in the next few years. 

On top of that, the ATM business is high risk. The machine and cash could get stolen, and fraudsters could hack the system. You might get sued by customers if their cards get compromised through your machine. Overall, the risks outweigh the rewards. Scaling opportunities are limited, and it might not be worth your time and money. 

Tree Care Lead Gen Site

Local lead generation is the best passive income business. It is low maintenance because leads are generated on autopilot. Unlike operating ATMs, you don't need to do extensive daily operations to get the business going. Ranked sites generate income even in your sleep. I built a tree care site over 8 years ago it still makes $2K monthly passive income up until today. I've been in the lead generation business since 2014, and it's still my primary income source now. This biz helped me achieve time and financial freedom so I can live life on my own terms. 

Follow Me
Ippei Kanehara

$52K per month providing lead generation services to small businesses is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2024, is to build your own lead generation business.

Leave a Reply

Your email address will not be published.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}