New guide caters to restaurateurs, retailers looking to boost income with ATMs

New guide caters to restaurateurs, retailers looking to boost income with ATMs

While duelling studies declare that cash is either: a) wobbling on its last legs; or b) ready, able and itching to go the distance with e-payments, the independent ATM market just keeps doing its thing.

That thing? Provisioning consumers with the folding money they still insist on carrying, while bringing merchants added traffic from consumers who come in for cash and walk out with a purchase, prompted by either impulse or intent.

What these merchants understand is that the ATM on their premises is just as much a selling tool as it is a revenue stream — and that, thanks to emerging technologies, they can mine that ATM for new opportunities to boost profits both directly and indirectly.

A few examples:

  • a small-town retailer might sell on-screen ATM advertising time to manufacturers — resulting in heightened sales of the advertised item in-store; or
  • a New York restaurateur might offer direct currency conversion to attract tourists — and tempt them to take a break for a "slice" and a beer.

A new ATM Marketplace publication, "How to Profit from ATMs: A Guide for Retailers and Restaurateurs," provides 46 pages of essential information for motivated merchants and others interested in learning about the revenue-building potential of ATMs.

A few of the topics detailed include revenues and costs; ATM selection; cash management; insurance; security; and added value opportunities. The guide also provides useful resources such as references and a list of suppliers.

Following is an excerpt from the guide's executive summary. Additional details and download are available here.

Executive Summary

This report provides an in-depth guide for retailers, restaurateurs, and other businesses that are considering installing ATMs on their premises. It gives an overview of the retail ATM market, and explains the role played by the various participants such as Independent ATM deployers and the services they provide.

In addition, the report explains the revenue opportunities for retail ATM deployers and provides guidance on issues such as finding the best location in the store for an ATM, regulatory compliance, security measures for protecting ATMs, and the type of insurance needed by ATM deployers.


Despite the growth of electronic payments, U.S. consumers still create a huge demand for cash.

In 2012, the number of U.S. general purpose debit card cash back transactions totaled 1.2 billion with an average value of $40, compared with 5.8 billion ATM cash withdrawals with an average value of $116, according to the 2013 Federal Reserve Payments Study. The total value of cash back from general purpose debit card transactions was $49.2 billion, while the total value of ATM cash withdrawals was $670.4 billion in 2012, the Federal Reserve said.

"Cash is still king, and it isn't going to go away," said Mark Smith, vice president of financial solutions at Peoria, Illinois-based IAD Kahuna ATM Solutions.

This is good news for independent ATM deployers, as it means consumers will continue to be willing to pay for the convenience of being able to access their cash from ATMs in retail locations.

Although major U.S. retail chains such as Walgreens and Walmart have installed ATMs, there are plenty of opportunities for smaller retailers such as convenience stores as well as other venues such as hotels and restaurants to deploy ATMs.

"There is still room for growth in retail ATMs," said Adam Hobelmann, senior vice president at Chesterfield, Missouri-based IAD Welch ATM. "Since 2008, there has been a contraction in bank-owned ATMs, and we're now seeing an expansion in the number of retail ATMs."

Business model

Retailers and restaurateurs have a range of choices as to what ATM business model to opt for. They can buy or rent their own ATM from an IAD and levy surcharge fees on ATM transactions. Alternatively, they can generate rental income and possibly a share in surcharge revenues by providing floor space for an IAD to install an IAD-owned ATM in their store.

An April 2013 study on U.S. ATM surcharge fees in 2012 by the U.S. Government Accountability Office found that, among a nongeneralizable sample of 100 ATMs run by four independent operators, the average surcharge fee was $2.24, with a range of $1.50 to $3.00 in 2012.

Bankrate, a personal finance publisher, reported in September 2013 that the average U.S. ATM surcharge fee had risen by 4 percent over the previous 12 months to $2.60.

An additional source of ATM revenue for retailers is to cobrand their ATM with a local bank or credit union, which will then pay them a fee for the right to advertise their brand on the ATM.

Hobelmann said that there is a significant opportunity for retail ATMs to be co-branded with a financial institution. Cobranding means that FIs can extend the number of ATMs available free of charge to their customers without having to deploy additional ATMs.

Another option for retail ATM deployers is to join a surcharge-free ATM network such as MoneyPass or Allpoint. While forfeiting surcharge fees from cardholders whose FI belongs to the surcharge-free network, the retailer benefits from an increase in customers visiting the store in search of a surcharge-free ATM. MoneyPass has found that these customers are then very likely to make purchases in the store.

Download "How to Profit from ATMs: A Guide for Retailers and Restaurateurs."

Topics: ATMs, Consumer Behavior, Kiosks / Self-Service, Payments

Companies: NCR Corporation, KAL ATM Software, Cardtronics, ATM Industry Association (ATMIA), Diebold, Incorporated, Hyosung, Better ATM Services, Inc., Cash Connect, Elan Financial Services, Payment Alliance International, GRG Banking Equipment (HK) Co., Ltd, National Cash Systems, Wincor Nixdorf International, Switch Commerce, Hantle USA, Inc., ATMmarketplace, Genmega Inc, Triton, Visa, MasterCard, Bader Company, ACG | Industry Leading Quality, Service & Solutions, ATM Tech Network

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