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Another atm vending thread :)


wallstreeterww

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  • 3 weeks later...

ATM operation has been my primary business for the last 8 years. It's a great business but the hardest part is securing good locations.

The industry is contract driven. Mine are 1,3 or 5 years with auto-renewals. As far as enforcement goes if a property breaks there contract I can sue them for the expected profits from the remainder of there agreement. It's rather straight forward so if you deal with any corporate entities with a legal department you will never have an issue of them voiding. If the property wants to cancel before there term is up as the provider you can offer them a buyout of there contract if you choose but generally speaking a location is never going to pay as the buyouts are between $5-$50k depending on the contract just to change providers.

Using armouerd car loading is cost prohibitive unless you have a lot of terminals in the field and the fee's are so high you can end up losing money after the costs and interest if the money doesn't move fast enough. A large provider might use armouerd loading for 100 terminals and only net a 9% return but still not bad on half a mil.

What you pay locations depends on what your offering them in terms of service. 2 of my top 5 producing locations receive zero profit share for the ATM in exchange for having a same day service gaurantee on the weekends. Machines will jam or break down. Not often but it happens and service related businesses can't have the ATM out of service on the weekend so I give them a gaurantee and my personal cell phone to call me on if they need me in an emergency as I do my own repairs. Some managers are happy to give up any profit share for this.

Be careful with bars. They can do good transaction volume but you can lose money with repair costs from people getting drunk and spilling drinks on the machine.

I personally advise against locators unless you reach an agreement where you don't pay until the location signs the contract. I've tried 2 locators over the years that had good feedback on Google and both took my money and a year later still haven't delivered a good lead. They do send me some junk ones just to show me they do something but overall waste of money.

Also if you are getting into ATM's now be sure you are buying machines with EMV card readers as they will be mandatory by 2017 on all ATM's so if you don't have it you will need to upgrade or your terminal will be shutdown from the network. It's still a ways off but the upgrade kits are $500-$1000 so some less scrupulous companies are trying to dump machines without EMV readers and not telling people about the cost of upgrading assuming the machine is not so old that it can't be upgraded.

That's all that comes to mind at the moment. Hope it helps.

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Blue plate those are the best vaulting fee's I've ever seen. The lowest I had found back when I was looking at armoured loading was $0.90 per transaction but that was only on loads for machines doing 300+ transactions a month. Anything under 300 was $1.10 so those are awesome rates.

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NYvending, if you're interested in vaulting let me know.  Being in NY you're right in our sweet spot.  Few things I have to comment on your post.  I've done very well with bar with minimal issues on spillage.  I do think I might be the exception.  Bars in Massachusetts tend to do well, the State is lax with busting 8-liners and Keno is very successful in Massachusetts bars.

 

I really do think contracts are a litter over-rated, have you ever tried to enforce one with a lawsuit?  My experience was miserable waste of time.  Maybe I'm just jaded.  On the other hand, New York is a much much more competitive market then mine

 

AS far as EMV goes, yes new machines you buy - should be EMV.  If you have older ATMs in the field, do not start upgrading yet.  First, the networks and processors have no intentions of shutting you're ATM down. The mag stripe on the card will be her for a long time to come.  All that is going to to happen is a liability shift.  Currently, if there is fraud with an ATM card - the card producer eats the liability.  If the ATM is not EMV compliant and the card has a chip and there is fraud, the ATM vendor is responsible for the fraud.

 

Card fraud at the ATM is possible but rare, because the PIN is required.  Most fraud is achieved with cards are achieved online, phone orders, or at the gas pump.  

 

EMVco, the company who is guiding the largest businesses in the US published a white paper about EMV at ATMs.  They state most ATM operators should not go out and upgrade their ATMs all at once.  The EMV upgrade should be part of a longer term plan as the ATMs are replaced.  Many ATM companies are trying to get you to drink the EMV Kool-AID to get your business or sell you EMV kits.

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I've yet to need to enforce a contract by lawsuit but I'm almost exclusively in corporately owned businesses at this point so a few times I've had to deal with a real golpher of a general manager at a location where the machine is. In a few cases they tried to throw me out because they didn't like the profit share the prior GM signed on for or after a renovation they didn't want the ATM re-installed. In each case I told them to speak to there legal department and have them send a letter to my lawyer on what grounds they feel the contract is in breach. I give them my lawyers card and tell them I would see him in court if they really want to push this. I've never actually had a problem move beyond that scenario so it's kept me in a few properties over the years.

That's good to know thanks. What resource do you use to follow EMVco? I've upgraded a few of my terminals but the cost to upgrade some machines just isn't worth it. However I heard the networks may be as harsh to non-EMV compliant machines as they were when the standard rolled out in Canada. So it's been difficult to get reliable information. My processor doesn't sell kits but just has been rather vocal to upgrade now so I don't have an issue later.

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http://natmc.org/documents/2014/09/implementing-emv-at-the-atm-white-paper-2014.pdf

 

 

That is the link to the National ATM Council posting of the white paper I mentioned.  My goal is to upgrade over the course of 5 years.  Some of that will have a natural upgrade process, meaning some of the ATMs will not last 5 years.  I'm setting the top priority by giving my top 10-20% new ATMs.  The ATMs I pull out of these top spots are cheaper (Hyosung 1800se upgrade about $275)  to upgrade and are moving into my slower spots.  

 

My small bars and under 100 transaction spots will be upgraded last.  There are several merchant groups suing for more time, which I am hoping will happen.

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  • 4 weeks later...

misslinda2000: that's a close call. There are a few things extra to consider. 1) how do you plan to connect the ATM to the network(dial up vs internet vs wireless) 2) unions and their BS territorial games. In college I worked for temp agency and did work in a factory in their kitchen. I wasn't allowed to clean up the messy break room since that would cause a major $hit storm with the union since 1 of the factory workers was assigned to clean it 3) being known as the ATM person that charges way to much and maybe bringing cash to fill it 4) my guess would be maybe around 2% of the employees would use it daily, so maybe around 80 transactions per month.

If you need more info feel free to contact me.

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