What are the operational costs of an ATM Machine?

What are the operational costs of an ATM Machine? An ATM i.e. Automated Teller Machine is used in order to access services by customers like withdrawing cash, activating a debit card, setting up a new PIN, etc. If an individual wants to run an ATM, they will have to take care of various operational costs like rent, electricity, security, availability of cash in order for the machine to function properly. 

What are operational costs?

Operational costs mean the daily expenses of running a business. This can include the following: 

• Rent 
• Inventory
• Internet Services
• Salaries of employees. 
• Insurance of property. 
• Technology update 
• Financial and legal services. 

What are the operational costs of an ATM Machine?

If you want to own an ATM and want to run a cost-benefit analysis before doing so, you are probably wondering about how much it would cost for you to run it. Following are the more specific details about operational costs of owning an Automated Teller Machine: 

1. Purchase Cost: Buying a new ATM will cost you somewhere between 2000 to 8000 dollars. Through the wall the ATM machine will cost you 4000 to 8000 dollars. The used ones are usually cheaper i.e. around 2000 dollars. You can also choose to pay the lease which will cost you 50 to 120 dollars a month. You can buy the machine at the end of the lease. You will have to submit a business plan to qualify for a lease. These leases can last 24, 36 or even 60 months, depending on your chosen plan of monthly payments. 
2. Availability of Cash: When you own an ATM, you naturally will need to load cash in the machine. You will need to put in at least 2000 dollars weekly. 
3. Transaction Fee: Every time a transaction takes place or cash is withdrawn, the bank charges a fee on it. This can vary from city to city. This usually ranges from 50 cents to 2 dollars. 
4. Maintenance Cost: Following can be the maintenance and repair charges you will have to take care of :
   1. Cleaning the machine might cost you somewhere between 20$ to 50$ per visit. It is important to get you machine cleaned at least once a week in order to keep it looking presentable. 
   2. Routine maintenance of the machine in order to make sure if the machine is working properly or not. This may cost you around 200 to 300 dollars each month. 
5. Security Cost: You need security in order to ensure that no one breaks in and steals the cash you have loaded. Criminals can also break in and steal the terminal as well. This is why you need insurance. The insurance cost depends on the usage i.e. no. of transactions made within a certain period of time and the location of the atm. It usually costs around 200 to 300 dollars a year. 
6. Rent: If you do not own the place where you want to set up your ATM system, you will have to factor in the rent as well. Rents entirely depend on the location and can cost you anywhere from 50 to 600 dollars a month. 
7. Electricity: This will cost you 20 to 50 dollars depending on the rates of electricity in your local areas. Electricity used also depends on the different machines depending on how efficient they are.
8. Internet Cost: The monthly internet cost depends on your plan and internet provider service. This can cost you anywhere from 30 dollars to 100 dollars a month. This is very important as ATMs need a good reliable internet connection in order to carry out transactions smoothly. 
9. Regulatory Compliance: As an ATM owner, you have to follow certain laws, applications and regulations set by the government and industry bodies. This includes governance of financial data, protection of consumers, security of transactions and accessibility.
   1. Installing necessary features, legal consultations and audits can cost you upto 2000 dollars. 
   2. You have to update and modify your ATM in order to meet current and new regulations. This totally depends on the update needed. It can cost you a few hundred or thousands of dollars. 
   3. Non compliance charges can be around 1000 to 100,000 dollars depending on the violation made by the owner. 

Risks Involved

Before starting an ATM business, you should take into consideration the following risks involved: 

• ATMs can be a target of theft, vandalism, equipment damage, cash being stolen. Hence, it is important to invest in security cameras or guards and a reputable location. 
• Skimming frauds are pretty common these days. Criminals or scammers install devices in the ATM in order to capture card information of some of the users. You need to hold regular inspections to the ATM to look for any of those devices and catch the perp. You can install anti skimming technology as well if affordable. 
• Mismanagement of Cash: You need to know the right amount of cash to be loaded in the machines. Excess amounts of cash or shortage of funds is not a good factor. 
• Cybersecurity is very important as the internet is a very powerful place. You need to protect your consumers from data breach by the scammers. Installation of firewalls and encryption will do the job. 
• You might end up running your business in loss instead of profit. This is why it is very important to choose a wise location so that the number of transactions are plenty. Choose a location that drives a good amount of traffic, where the rent charged does not outweigh the profit made and there are few to no chances of robbery. 

Owning an ATM machine can be a profitable business, when done wisely. Just keep in mind to protect and secure it with insurance, choose a wise location with high traffic and less to no threat of thefts. Keep updating yourself on the technology in order to prevent data breaches and any scams. It is a reliable business if you stay updated on the trends and regulations of the industry. With proper planning and efficiency, ATMs can be considered a reliable source of investment.