How to Manage ATM Machines

Managing an ATM machine properly can generate profits for the owner.

Most automated teller machines (ATMs) are owned and operated by banks and credit unions, but nearly anyone can own and operate an ATM. Sometimes merchants (store or restaurant owners) manage their own single or small-chain machines. Some companies specialize in placing ATMs at independent locations and chains. Regardless of who owns the ATM, every ATM must be managed so as to provide service for the user and profits for the owner, and to comply with all federal laws governing ATMs.

Instructions

1. Choose a machine. Machines are available with a variety of functions, including deposit, automatic check-read and statement printing. Consider the size, capacity and cost of each machine. Unless you are a bank, you will probably want a simple machine with a dip or swipe reader (neither of which require the card to be fully inserted into the machine) and no deposit capabilities, because of the expense and liability associated with these functions.

2. Choose a processor. The processor is the company that manages the electronic transaction from the time a customer inserts his card until he receives his money. The processor also collects your fees, including surcharge and "interchange" fees (the fees paid to an ATM owner by the debit network associate with the card) and distributes them to you, less its agreed-upon processing fees, on a monthly basis.

3. Decide how you will replenish money and "settle" the machine. Settlement is the process of running a pre-set program in the machine that reports individual transactions, total withdrawals and machine errors during the settlement period (the time since you last loaded cash). The settlement program also "resets" the machine and allows you to enter a new starting total. This process is critical to keeping track of funds in the machine and should be completed at the same time cash is loaded, every time cash is loaded, and by the same person that stocks the cash. You may choose to replenish the machine yourself, or you may contract with an outside vendor.

4. Install your machine in a visible, secure location, making sure to follow all manufacturer recommendations regarding dedicated phone and power lines and methods for securing the machine to the floor. Post signage regarding which networks your machine accepts and how much your service fee is, in accordance with Electronic Funds Transfer Act (Federal Reserve Board Regulation E, usually called "Reg E" in the industry).

5. Replenish the cash and settle the machine on a regular schedule. Track your first few replenishments to determine how much money you should be stocking at each replenishment. Remember to include extra for holidays and major events. Count the money you remove from the machine to make sure it matches the total your settlement receipt says you should have.

6. Change the consumables, such as receipt paper, before they run out. Often, your machine will send a message to your processor that the paper or toner is low and your processor can notify you. You can also have this service included in your replenishment and settlement contract. Even if you contract for cash services, you can usually change consumables yourself as they are located outside the safe in most machines.

7. Repair your machine when it breaks down, or contract with a vendor to provide this service. Track your warranty paperwork and follow the manufacturer requirements for all service within the warranty period.

8. Let your customers know about the machine by posting "ATM inside" or "ATM available" on your doors, registers and at outside point of purchase locations (such as gas pumps).

Tips & Warnings

• If you own the ATM, but not the store in which it is located, you will need to form a contract with the location owner that stipulates each party's responsibilities and share of profits.

• Income from ATM fees and surcharges is taxable.Track your income for your tax accountant.

• Most credit card processors are also ATM processors, so if you already have a credit card system, and are happy with your processor, discuss your ATM needs with your account manager.

References

• Diebold: Managing Your ATM Network
• CardTronics: Available ATM Programs
• Mobile Money: Making Money With Your Own ATM