With the rise of online banking and digital payment systems, many people might think that ATM businesses are already obsolete. However, the truth is quite the opposite. ATMs are still in demand, especially in areas with limited access to banking services and cashless payment options.
So, is it worth starting an ATM business? Owning an ATM business is worth it and can be profitable because there is always a high demand for ATMs. In addition, the global ATM market size is predicted to reach about $30.50 billion by 2027, with a compound annual growth rate (CAGR) of 4.9% between 2021 to 2028 (Source: Grand View Research)
If you are thinking of starting an ATM business but are unsure about its potential benefits, keep reading to explore whether investing in an ATM business is worth it. Check out this article if you wonder about the future of ATM Machines.
Advantages of Starting an ATM Business
Despite the rise of digital payment systems, starting an ATM business is still worth it, particularly in areas with limited or unreliable internet connectivity. Here are the main advantages of starting an ATM business:
1- Potential For Passive Income
For me, one of the main benefits is the potential for passive income. Once you have set up your ATM machines in high-traffic locations, such as malls, convenience stores, or gas stations, you can earn a commission for each transaction.
Moreover, since ATM transactions are usually made in cash, you don’t have to worry about chargebacks, disputes, or delayed payments, which can be common in online payment systems.
2- High-Profit Margins
An ATM machine can earn an average of $180 to $600 in revenue per month, with an average gross profit margin of 30-50%, depending on the number of people that use it.
With its lucrative profit margin, ATM businesses are excellent for small business investors, entrepreneurs, or anyone looking for additional streams of income.
3- Cost-Effective Investment
An ATM business can be set up with just a few machines and without large capital. The cost of buying or leasing an ATM ranges from $1,500 to $10,000.
Companies like National ATM Wholesale and Triton offer various financing services to essential operators.
4- Accessibility
ATMs provide 24/7 accessibility to customers and are not subject to business hours or staffing hours.
Moreover, because of their convenience, ATMs attract a vast customer pool, including tourists or people working non-traditional hours, thereby increasing revenue.
5- Fewer Operational Costs
Another advantage of the ATM business is that it requires minimal maintenance and overhead costs. Generally, you don’t need large office space, employees, or inventory. Instead, you only need to pay for the machine, installation, and occasional repairs or upgrades.
Remember you will be required to perform regular maintenance and cash replenishment.
6- Liability Protection
ATM owners are protected by the government through EFTA (The Electronic Funds Transfer Act of 1978), which protects consumers engaging in electronic fund transfers (EFTs) and limits the liability of damages incurred by a lost, stolen, or damaged ATM card.
Drawbacks Of Starting an ATM Business
However, before you jump into the ATM business, you also need to be aware of the potential risks and challenges. Here are a few cons of starting an ATM business:
7- Theft or Damage to Your ATM Machines
One of the biggest risks is theft or damage to your machines. Since ATMs can hold significant amounts of cash, they can be attractive targets for robbers or vandals.
Thus, you need to ensure that your machines have adequate security measures, including CCTV cameras, alarms, locks, and insurance.
8- Finding Suitable Locations For Your Machines
Another challenge of the ATM business is finding suitable locations for your machines. You need to consider factors such as foot traffic, visibility, accessibility, and competition from other ATMs or payment systems.
Moreover, some locations may require permits, rent, or commissions that can increase your operational costs.
9- Legal and Regulatory Requirements of an ATM Business
Depending on your jurisdiction, you may need to obtain licenses, comply with tax laws, and follow industry standards for safety, accessibility, and privacy.
10- Keep Up With Technological Advancements and Market trends in The ATM Industry
In addition, you need to stay up-to-date with the technological advancements and market trends in the ATM industry.
For example, many customers now prefer ATMs that offer additional services, such as bill payment, money transfer, or mobile phone top-ups. Thus, you may need to invest in machines that can support these features or partner with third-party providers that offer such services.
Is it Worth Starting an ATM Business?
Despite the potential challenges, starting an ATM business can be a rewarding venture if you plan and execute it wisely. With the increasing demand for cash services and the ongoing transition to a cashless society, ATMs still have a significant role to play in the financial ecosystem.
As long as you choose suitable locations, secure your machines, comply with the regulations, and provide excellent customer service, you can establish a profitable and sustainable ATM business.
Also, according to Polaris Market Research and Consulting, in 2021, the global ATM market was valued at about USD 20.39 billion and is expected to grow by USD 31.42 billion with a CAGR of 4.9%.
If you are thinking of starting an ATM business, I encourage you to do your research and analyze the market before jumping into this business venture. With the right mindset, strategies, and execution, starting an ATM business can be a profitable and fulfilling experience.
What to read next:
- The Key Pros and Cons of Owning an ATM Business!
- How Much Can You Make Per Month With an ATM Business? (This much!)
Final Thoughts
Starting an ATM business can be a profitable venture that can help you generate a significant return on investment with lower startup costs and fewer operational costs. An ATM business can be an excellent way to generate high-profit margins while requiring minimal maintenance.
Whether you are starting your entrepreneurial journey or are an established business owner looking for an additional income stream, an ATM business is an excellent choice to consider.