How to Start an ATM Business

In a world dominated by digital payments, ATMs (Automated Teller Machines) continue to play an important role in our financial ecosystem, proving that physical currency isn’t going away anytime soon.

This opens up a unique opportunity for entrepreneurs to tap into a business that combines convenience with steady returns, offering a way to generate income without the complexities associated with other business models.

Having said that, you should keep in mind that entering the ATM business is not just about installing machines — it’s about tapping into a dynamic industry that blends the reliability of established banking with the future potential of digital and cashless technologies.

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Industry Overview

The U.S. ATM services market — valued at approximately USD $7.73 billion in 2023 — is currently experiencing steady growth, and projected to expand at a CAGR of 2.5% until 2032.

This sustained growth is mainly due to the continued use of cash for everyday purchases, the large portion of Americans who do not have full access to traditional banking services, and the rapid spread of cryptocurrency ATMs, which are quickly being adopted across various locations nationwide.

The rise of cryptocurrency ATMs alone has added over 30,000 machines in just a few years, which, together with the surge in multifunctional ATMs offering services like cash deposits, transfers, and even loan applications, has significantly expanded the role of ATMs beyond simple cash withdrawals.

Startup Costs

If you’re considering whether an ATM business is right for you, the first thing you’ll need to know is whether it’s a) affordable, and b) worth the investment. I mean, how much can you actually make running your own ATM business?

Well, it depends, and the initial investment for an ATM business can vary widely depending on several factors:

• ATM Machine Cost: You should expect to pay between $2,000 and $8,000 for a standard machine, while more advanced models with additional features can exceed $10,000.
• Installation and Setup Fees: You will need to budget between $200 and $500 per machine for professional installation, in order to ensure that your machines are correctly configured.
• Location Lease or Placement Fees: You’ll either need to pay a flat monthly fee — anywhere from $150 in smaller spots to over $800 in high-traffic areas — or agree to share a percentage of your revenue with the business owner in exchange for placing your ATM on their premises. In some cases, you might even end up with a mix of both, depending on what’s negotiated and the value of the location.
• Cash Reserve: You will need a cash reserve of $2,000 to $10,000 per machine to keep them stocked, depending on how often you plan to refill your ATMs and the expected transaction volume.
• Insurance: You should expect to spend around $500 to $1,200 annually on ATM insurance to cover potential theft, vandalism, or damage to your equipment.
• Maintenance and Servicing: You will need to set aside between $50 and $100 per month for routine maintenance and service calls to keep your machines running smoothly.
• Compliance and Licensing Fees: You will need to budget $200 to $2000 annually, depending on your state, for compliance, licensing, and permits required to operate ATMs legally.
• Transportation: You may need to invest between $200 and $5,000+ depending on whether you plan to use your existing vehicle for servicing and restocking or purchase a dedicated one for your ATM operations.

Note: Cash reserves are essential for keeping your ATMs operational, but it’s wise to plan for more than just the basic amount needed. While $2,000 to $10,000 per machine is recommended for regular transactions, consider setting aside an additional $5,000 to $10,000 as a backup reserve. This extra cushion will help you manage sudden spikes in usage or handle any unexpected cash shortages, ensuring that your ATMs are always stocked and ready for customers.

Earning Potential

You may find this surprising, but the “get rich quick” schemes you see on TikTok or hear about online don’t reflect the reality of running an ATM business.

The first thing to understand is that an ATM business is not a magical source of passive income. While it might seem more hands-off than many other ventures, you’ll still need to handle cash restocking, coordinate with business owners for placement, and perform regular maintenance, so it’s not as “quick” or effortless as it’s often portrayed.

Moreover, when it comes to the “rich” side of the equation, your profits are capped by industry norms and regulations, meaning that you can’t charge whatever you want for transaction fees.

Typically, you’ll be charging a fee ranging from 0.5% to, at most, 2% per transaction. With the industry average hovering around 18 transactions per day, your income relies more on consistent usage than on high fees.

Once you factor in costs like rent for the space, utilities, cash reserves, and maintenance, the return on a $10,000 machine — plus another $10,000 tied up in cash reserves and an additional $10,000 worth of your time and effort — ends up being much more modest than many expect.

Having said that, the reality is that you do have a competitive advantage — at least for the foreseeable future — and this is where many ATM operators make their money.

One of the biggest selling points for businesses to host your machine is that you can lower their costs by encouraging more cash transactions. 

Think about it — a business loses around 2% every time a customer pays with a credit card. But if that same customer withdraws cash from your ATM for just 0.5%, the business not only avoids that 2% loss but also benefits from any revenue share or rent you’ve agreed on.

In other words, the business keeps more profit in-house while still providing a convenient service to its customers — making ATM placement a win-win scenario for the business.

And that’s how you secure the best locations: by clearly showing business owners how partnering with you will save them money, how you’ll handle the logistics, and how they’ll see added revenue without lifting a finger.

That’s also why ATM businesses can be quite lucrative — because you need scalability to succeed, and right now, scaling makes sense for both sides.

With every new location, you increase transaction volume, and the business owner benefits from more customers choosing to use cash. This synergy means you’re not just adding machines; you’re building momentum.

As long as you keep locking in high-turnover spots, you can push up your numbers, partner with the right businesses, and really turn those placements into a steady stream of income.

Note: You can also increase your profits by using your machines for ad placements — placing screens on top of the ATM and selling advertising space to local businesses, adding an extra stream of revenue without additional overhead.

9 Steps to Starting an ATM Business

In order to start an ATM business, you’ll need to complete the following steps:

1. Planning Your ATM business
2. Registering Your Business
3. Setting Up Your Taxes
4. Secure Funding (If Applicable)
5. Finding and Securing the Right Location
6. Getting a Business Bank Account and Credit Card
7. Setting up Business Accounting
8. Getting all Applicable Licenses and Permits
9. Obtaining Business Insurance

We’ve broken each one of these down in more detail below.

Still exploring your options? Check out other small business ideas.

Step 1: Plan Your ATM Business

Before diving into your ATM business, you’ll need to spend some time conducting thorough market research.

To do this, you will need to first identify general areas with high foot traffic and a preference for cash-based transactions, and then evaluate the competition by checking how many other ATMs are nearby, what fees they charge, and how visible or accessible they are.

This will help you evaluate the financial viability of your project — including projected revenues and expenses — while also providing a clearer understanding of market saturation and helping you identify potential gaps you can fill.

Finding a Suitable Name

Choosing the right business name is both important and challenging.

This is because your name will need to be eye-catching, memorable, and (at least somewhat) related to your industry.

If you don’t already have a name in mind and need help, you can visit our How to Name a Business guide or use our ATM Business Name Generator tool.

If you do have a name in mind, we recommend researching the following:

• Your state’s business records
• Federal and state trademark records
• Social media platforms

You will also need to make sure that your business’s name is available as a domain — this is your website’s URL address.

Note: If you’re planning to operate a sole proprietorship, you might want to operate under a business name other than your own name — known as a “Doing Business As” (DBA) name. Keep in mind that this is not recommended for an ATM business.

Choosing Your Management Approach

You’ll also need to decide how you will manage the supply and maintenance of your machines, as this will significantly impact your operational efficiency and profitability.

If you choose to outsource your ATM management to a professional company, your earnings per machine will be significantly lower, as these companies typically take up to 85% of the transaction fees generated by each ATM.

However, outsourcing can free up your time and resources, allowing you to concentrate on securing more deals and expanding your business.

In this scenario, while you’re earning a smaller slice of the pie, you have the potential to grow your overall earnings by increasing the size of the pie itself through greater market presence and partnerships.

On the other hand, keeping everything in-house requires a considerable investment of your time and effort — you’ll need to manage cash restocking, maintenance, and logistics, ensuring that your machines are always operational and well-stocked.

While this approach allows you to retain a larger share of the transaction fees and maximize your profit potential for each machine, it also demands your ongoing attention to detail and the ability to address any issues that may arise.

Ultimately, the choice between outsourcing and in-house management depends on your personal preferences and circumstances.

There isn’t a one-size-fits-all answer; you might even consider starting with a mix of both approaches — outsourcing management for a couple of ATMs while handling a few yourself. This way, you can evaluate which method is more worthwhile for your specific situation, as it all comes down to how much time and effort you’re willing to invest.

Step 2: Register Your Business

One crucial aspect that cannot be overlooked when starting your ATM business is the importance of establishing a solid business foundation. While sole proprietorships and partnerships are the most common entity types for small businesses, they’re a far less stable and advantageous option than LLCs.

This is because unincorporated business structures (i.e., sole proprietorships and partnerships) expose you as an owner to personal liability for your business’s debts and legal actions, while LLCs protect you by keeping your personal assets separate from your business’s liabilities.

In practice, this means that if your ATM business were to face a lawsuit or incur any debts, your savings, home, and other personal assets could not be used to cover these costs. On top of this, forming your business as an LLC also helps it to appear more legitimate and trustworthy.

Note: If you’re interested in more information before getting started, we recommend having a look at our state-specific How to Start an LLC guide (DIY) or our in-depth Best LLC Services review (for those opting for a professional service).

Step 3: Set Up Your Taxes

The next step you’ll need to take is to register your business for taxes. To this, you’ll need to obtain an Employer Identification Number (EIN), which you can think of as your business’s Social Security Number.

Did you know?

An EIN is also needed in order to hire employees, set up a business bank account or get a credit card. You can find out more information on this in Step 7.

If you form your LLC through a specialized LLC formation service, this will likely be already handled for you in exchange for a small additional fee.

Even so, it’s important to make sure that you fully understand your business’s tax obligations; since these can depend on your location, it’s a bit difficult to accurately break down exactly which taxes you’ll be subject to.

Nevertheless, most businesses will typically be subject to income tax, sales tax, and employment taxes at the federal level. Some states impose a franchise or filing tax on ATM business, and — depending on your location — city or county taxes may also apply.

Due to the complex nature of business taxes, we always advise our readers to seek the help of a professional accountant or business attorney for this step.

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Step 4: Secure Funding (If Applicable)

Securing funding is a critical step in starting your ATM business. Financing options include bank loans, Small Business Administration (SBA) loans, private investors, and crowdfunding.

Each option has its pros and cons, and the best choice will ultimately depend on your financial situation and business plan.

A common approach for businesses looking to expand is to borrow funds for that growth, treating the interest payments as a necessary cost of doing business. This strategy can be advantageous because the interest rates on loans are often significantly lower than the revenue you can generate with that borrowed money.

For example, if you borrow $25,000 to cover the cash reserves needed for three new ATM locations and your loan has an interest rate of 5%, your annual interest cost would be around $1,250. Meanwhile, if each ATM generates an average of 24 transactions per day at a fee of $2, that translates to $48 per day, or about $17,520 per year for each machine.

Assuming your net profit margin is 10% (after accounting for rent, maintenance, cash replenishment costs, and other expenses), you can see how, after covering the $1,250 interest on the loan, your net profit would be approximately $4,006.

Of course, the extent that this step will be applicable to you will depend on your individual financial situation.

Step 5: Find and Secure the Right Locations

The next step you’ll want to take is to find (and secure) the right locations for your ATMs.

You will need to start by identifying potential sites that have high foot traffic and approaching business owners in those areas to present the benefits of hosting your ATM.

Emphasize how having an ATM can increase customer convenience, drive foot traffic, and generate additional revenue through transaction fees or profit-sharing arrangements.

You should also have specific data ready to support your pitch, such as local demographics, average transaction volumes, and potential earnings.

This information can help you make a compelling case for why business owners should partner with you, illustrating the mutual benefits and long-term profitability of hosting your ATM.

Step 6: Open a Business Bank Account and Credit Card

Using dedicated business banking and credit accounts is essential when operating as a business owner; this is because when your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) can be at risk in the event your business is sued.

In business law, this is referred to as piercing your corporate veil and is a result of the fact that not having a separate business bank account can be interpreted by some courts as evidence that you are not treating your business as a separate financial entity.

As a result, you could lose your limited liability protections even if you’ve registered a separate business such as an LLC or C Corp.

There are also a variety of practical and economic benefits to this step, such as a larger access to business loans and a more legitimate look.

Getting a business credit card can also be a great idea as it can help you build your company’s credit history from the start.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Step 7: Set up Business Accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business.

You can categorize specific accounts related to ATM business operations into various categories, such as:

• ATM purchase or lease costs
• Maintenance costs (e.g., repairs, software updates, regular servicing)
• Transaction processing fees
• Insurance expenses
• Vehicle expenses for servicing ATMs
• Security measures (e.g., surveillance systems, anti-skimming devices)

In addition to tracking your business expenses, you will also need to monitor your revenue sources, which include:

• Surcharge Fees (income generated from the fees charged to users for cash withdrawals, typically serving as your primary source of revenue)
• Interchange Fees (revenue received from card-issuing banks for processing transactions made by their cardholders)
• Advertising Revenue (income generated from promotional displays on the ATM screens or printed receipts)

This should provide clear visibility into your business’s financial performance and aid in accurate cost analysis.

Step 8: Secure All Required Licenses And Permits

The applicable licenses and permits that you’ll need will largely depend on your state and local regulations.

Even so, we’ve compiled a list of some of the common licensing regulations that you’ll likely need to satisfy in order to operate legitimately.

State Money Transmitter License

Depending on the specific state in which you operate your ATM business, you may need to obtain a State Money Transmitter License.

This license ensures that you comply with state financial regulations governing money transmission activities and is typically obtained from your state’s Department of Financial Services or a similar regulatory agency.

The specific requirements for obtaining this license will depend on your location and the nature of the services you provide, including how you handle customer transactions and the volume of money processed through your ATMs.

ATM Operator License

Some states have specific licenses designed exclusively for ATM operators, which can include requirements related to security, customer access, and compliance with financial laws.

Typically, this license can be obtained from your state’s Department of Financial Services, with the application process often requiring detailed documentation and background information about both your business operations and the individuals involved in the management of the ATMs.

Electronic Funds Transfer (EFT) License

Depending on where your ATM business is located, you may also need to obtain an Electronic Funds Transfer (EFT) License.

This will typically involve submitting an application, providing detailed documentation about your business operations, demonstrating the security measures you have in place to protect customer data, and paying a fee.

In this scenario, while you’re earning a smaller slice of the pie, you have the potential to grow your overall earnings by increasing the size of the pie itself through greater market presence and partnerships.

Note: Keep in mind that your ATM business will need to comply with Payment Card Industry Data Security Standards (PCI DSS) for secure transactions, and may also need to register as a Money Services Business (MSB) with the Financial Crimes Enforcement Network (FinCEN).

Step 9: Secure Business Insurance

In addition to securing the necessary permits and licenses, you will need to obtain the right business insurance.

Note

Even if you form an LLC, purchasing business insurance is still a good idea. This is because an LLC structure protects your personal assets, not your business’s.

While specific coverage needs may vary based on factors such as location, size, and unique risks, there are several key types of insurance that most ATM businesses should consider.

We’ve briefly outlined these below.

ATM Insurance

ATM Insurance is a specialized coverage designed to protect against ATM-specific risks, such as damage to the machine itself, theft, and cash loss both inside the machines and during transit.

In general terms, this type of insurance covers most risks associated with ATM operations, with costs typically ranging from $300 to $1,500 per ATM per year, depending on factors like the number of machines, location, and amount of cash stored.

Cyber Liability Insurance

Cyber Liability Insurance is one of the most important coverages that all ATM businesses will need to get, as it protects your business against data breaches, cyberattacks, and other digital threats that can compromise sensitive customer information.

This insurance covers a range of costs associated with these incidents, including data recovery, legal fees, public relations expenses, and potential liability claims.

For a small ATM business, this coverage typically costs anywhere between $500 and $3,500 per year, depending on factors such as the number of transactions processed, the security protocols you have in place, and the amount and type of data stored.

Commercial Crime Insurance

Given the nature of ATM operations involving cash handling, Commercial Crime Insurance is highly recommended, as it protects your business from financial losses due to theft, employee dishonesty, or fraud.

The cost for this coverage for an ATM business can typically range from $500 to $5,000 per year, depending on several factors, such as the number of ATMs you operate, the total amount of cash held in your machines, and the security measures you have in place.

Business Interruption Insurance

Business interruption insurance can help replace lost income if your ATM business is temporarily unable to operate due to a covered event, such as a fire or natural disaster.

The average cost for this type of insurance ranges from $40 to $130 per month, or $480 to $1,560 annually.

Keep in mind that this coverage is often bundled together with other types of insurance (e.g., property insurance, etc) in order to provide more comprehensive protection.

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How to Start an ATM Business FAQs

How much does it cost to start an ATM business?

Starting an ATM business typically requires an upfront investment that ranges from $6,000 to $15,000 per machine.

This estimate accounts for purchasing a standard ATM, installation, cash reserves, and other operational costs such as monthly location fees, insurance, and routine maintenance.

Is an ATM business profitable?

That will heavily depend on your location, transaction volume, and the costs associated with operating each machine, such as rent, maintenance, and cash management.

Having said that, broadly speaking, the ATM business can be quite profitable over time if managed well, as machines in high-traffic areas can generate a reliable income stream with relatively low overhead compared to other ventures.

How do I start a small ATM business?

To start a small ATM business, you will first need to identify high-traffic locations and purchase a machine suited to your budget.

Then, you will need to secure all required licenses, negotiate placement terms with business owners, and set up a plan for cash replenishment and maintenance.

How do ATM owners make money if they have to fill it?

ATM owners make money through the surcharge fees charged for each withdrawal, typically ranging from $2 to $3.

While they need to keep the machine stocked with cash, the fees earned from multiple transactions often generate a significant profit.