The ATM Business has a “rule of thumb” formula that many Independent ATM Deployers “IADs” use. Use this rule of thumb to determine if a location would be a good candidate for an ATM machine. There are two different schools of thought on this rule. Obviously, since there are many unknown variables, no location is a guarantee using these formulas. However, using this formula is better than a WAG (wild ass guess).
Check out our Calculators to the right to make better decisions. These ATM profit calculators can help you determine if a location you’re considering might be a good location.
ATM Business Rule of Thumb #1
- The first rule of thumb or formula in the ATM Business says that approximately 2 – 3% of people that actually see an ATM machine in an establishment will likely use the ATM. Say, for example, your location has an average of 200 customers visiting each day. One would expect or speculate that approximately 5 of those 200 people would use that ATM daily.
- Secondly, you could then take those 5 people and multiply it by the amount of the surcharge. After that, take that figure and multiply it by how many days the location is open in the year. This will give an ATM owner, or prospective owner, an estimate on how much money he/she can make owning an ATM machine in a year’s time.
- Like this: (5 x Surcharge Amount) x Days Open Per Year = ATM Revenue Per Year
Try the ATM calculator here. However, most ATM business owners want to calculate monthly revenue and income.
ATM Business Rule of Thumb #2
- The second rule of thumb follows the norm that the number of adult patrons an establishment has in a given day, that same number (plus or minus 10%) will use the ATM on a monthly basis. Try the Rule of Thumb #2 ATM calculator here.
- This rule of thumb is more commonly used if the establishment accepts credit cards or gives cash back at the point of sale (POS). However, alternate payment methods will affect ATM usage but will also convert some users to cash. This also helps lower credit card fees the establishment pays. Usage could be affected by as much as 20% – 40%.
- Like this: # of Adult Patrons Per Day +/- 10% = # of People Use ATM Per Month
ATM Machines in Hotels and Commercial Buildings
- A similar formula is used when locating ATMs in hotels, commercial buildings, or manufacturing plants. For hotels, we take the number of rooms, multiplied by the occupancy rate then apply the same plus or minus 10% rule. So if the hotel has 150 rooms with an 80% occupancy rate one might expect 110 – 135 monthly transactions. But, if the hotel has any events, banquet rooms, onsite restaurants, shops, beverage or snack stands that number should scale higher.
- Similarly, with commercial buildings and industrial manufacturing (an office building or a manufacturing plant with hundreds or thousands of employees for example), we can take the total number of employees working in the building and use the yearly formula. Base your calculation on how many days a year employees work there. Think about how many people occupy the building on an average day when open. If there is a cafe or for-profit cafeteria in the building the estimates would be higher.
- Many Employers enjoy an ATM on-site as an Employee benefit. For example, businesses may even pay a monthly fee to waive surcharges since an ATM can often cut down on employees being late to work or returning from lunch.
Source: ATMDepot.com
