ATM Answers Here


ATM Answers Here
Do you want one, will your location support one, and what do you need to do?

What can an ATM do for a business?

ATMs generate revenue in part through fee-sharing or rental agreements with the ATM provider. But there's more. Cash machines also create a symbiotic relationship with the store: Carwash and convenience store traffic breeds ATM customers, and ATM customers spend cash in the store.

Bob Nemens, senior marketing manager for Diebold, Inc., North Canton, OH, says industry survey statistics shed light on some of the benefits:

  • In stores with machines that distribute $20 bills, sales increased 8 percent
  • In stores with machines that dispense $10 bills, sales increased more than 15 percent
  • ATM customers spend an average of 20 to 25 percent more than non-users
  • For small retailers, 35 to 40 percent of dispensed cash stays in the store
  • 60 percent of people 25 to 34 use ATMs eight times per month with an average withdrawal of $55
  • Friday is the most popular day to use an ATM.

For these reasons and others, convenience stores/stations remain among the most preferred locations for a machine, along with grocery stores.

And beyond even the revenue possibilities, Nemens says there's another reason you may want to install an ATM--your customers may demand one.

"From a general perspective, consumers expect the convenience," he says. "It's become a competitive necessity to have one to promote foot traffic."

Will my location support a machine?

Nemens says statistics suggest there are thousands of locations that could still install a successful ATM. One measure of viability is the number of employees at a business. With five employees as a minimum, he says, there are 600,000 businesses--convenience, fast food, drug and other stores--that could conceivably support an ATM.

A talk with several ATM service companies should give you an idea as to whether your carwash can support a machine. The threshold level will depend on the provider, Nemens says. Banks may want a minimum of 1,000 transactions per month, while other independent providers may accept as few as 300 transactions per month.

More machines are being built that can enhance revenue in marginal­and other­locations. According to Nemens, borderline sites can only be served when companies cut the cost of deployment or increase revenue possibilities.

"You're going to see more screen advertising and dispensing of other value items," he says. Machines are being built that offer stamps and other conveniences.

If store size is a problem, smaller stores with little leftover interior space have the option of installing free-standing exterior or drive-through machines.

One note of caution, Nemens says, is to make sure you take a close look at the agreement you sign. Foot traffic and ATM use patterns should be conservative. Unrealistic expectation can leave operators holding on to bad business agreements.

How does a basic arrangement work?

Operators get income either through fixed rental agreements or sharing surcharge fees. Independent providers are more likely to offer fee sharing. Some larger chains may be able to cut special deals with banks with which they conduct the rest of their commercial banking business.

Fee arrangements are up to the business owner and the deployer, with some restrictions.

"Some states do not allow surcharging, and there seems to be a lot of interest in banning it," Nemens says. "Whatever state you're working in, check with the state banking commission for the rules in your area."

Account and fee processing is provided either through the bank that installs it or through a contractor hired by the independent installer. Operators may be asked to balance the machine.

What physical and security requirements are there?

"Usually the store owner will give a dedicated power outlet and often will supply a phone line, usually a dial-up line," Nemens says. "You want to put it in a high-traffic area to drive transactions, but away from the front window or parking lot. We also highly recommend that they bolt it to the floor."

Other security measures include either hard-wired alarm systems or simpler, battery-powered sensors that will "scream" if the machine is moved.

What are an operator's responsibilities?

The duties and responsibilities of the carwash owner or manager will depend upon the agreement with the deployer.

"One of the ways of reducing the cost is having store employees do first-line service-changing paper/receipt rolls," Nemens says.

Your deployer/manufacturer can probably provide you with a quick reference guide to change rolls and clear jams. Anything beyond the most routine maintenance work is generally handled by the manufacturer or the service provider.

You also have to decide whether to add cash yourself or count on an armored car service, which can cost hundreds per month. Talk to your supplier about the ease, security and accountability of having yourself or your employees add cash.

Whatever the arrangements, you should expect more as your responsibilities rise.

"The rule of thumb is: the more the retailer has to do, the more of the fee the retailer gets to keep.



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