What Is Required to Start an ATM For Passive Income?

Times are changing quickly and having a passive income stream can sure help a lot. Clever entrepreneurs and individuals in general, have all made their streams for safekeeping their last bit of savings. What better way to do so than to start an ATM business for passive income?

Here’s all you need to start an ATM to generate a passive stream of income:

  1. Paperwork
  2. An ATM machine
  3. A suitable location
  4. Finances
  5. Surcharge knowledge

One thing to bear in mind is that starting endeavors such as these are never easy. It requires a lot of pre-planning to get your investment in the line — Only then your business will start to run itself.

That’s why I’ve decided to break down all the main points in starting your own ATM business. 

#1 Get Comfortable With Paperwork 

Let’s face it, after starting such an extensive passive income stream, you’re going to come across a few pieces of paperwork.

Especially when it comes to purchasing something, there are a few credentials that need to be filled in, to be able to purchase your machine. 

The following forms and documentation are required:

  • Equipment order form
  • A surcharge form
  • ACH form for revenue purposes
  • A void business check
  • ATM operator agreement
  • W-9 form for tax
  • Permits and business licenses
  • A place location agreement (SLA)

They prove that you can use a machine and overall determine your capabilities. After you’re done with the tiring paperwork, you can expect a seamlessly easy process until the end.

» This could also be something for you: How To: Start an Ice Vending Machine Business (Easy Guide)

Important Documentation

Firstly purchasing an ATM will require you to fill out an equipment order form. This is basically where you indicate the kind of equipment you are set on purchasing. It also indicates whether or not you need someone to install it for you. 

This makes things more smooth and clear when it’s time to purchase the machine. Aside from this, you’ll also be required to fill out a document stating what your surcharge is along with the sort of denominations your ATM will dispense. 

Next up is the ACH form. This is so the revenue you earn off your investment can be transferred to your account. This part is where you’ll also require an identity test but luckily, even a driver’s license will suffice. 

This is mainly to make sure you’re not a convicted felon before going through with your purchase.

Next, a voided business check verifies how legitimate your bank account is. If there are any alerts of any fraud or something that may make them think twice. Plus, the account where you receive your revenue mustn’t be a savings account. 

Make Arrangements With Banking Partners

Another important document to have is the ATM operator agreement. This is where both mutual parties sign an agreed contract ensuring all federal regulations are met.

Additionally, you’ll also need to file for tax, since you will be earning revenue from the ATM. For this purpose, submitting a W-9 form is necessary. 

The rest of the paperwork includes additional permits and business licenses. These are often necessary if your state law requires them. If not then it’s only a plus point, not a necessity. 

A place location agreement (SLA) is also necessary only if you’re planning on installing the machine at someone else’s property. Then, this will serve as a contract between you and the location owner discussing any revenue splits or general agreements. 

» Read my blog post: Getting Rich from Vending Machines? (10 Steps To Wealth)

#2 Choosing Your Preferred ATM Machine

The next requirement you’ll need to tend to is choosing an ATM. Now you might be thinking, what do you mean by choosing a machine? Isn’t an ATM only of one sort? 

Well, no. When I talk of the types I mean what condition you’d want to purchase your machine in. There are usually three points of consideration you’ve to undertake:

  • Manufacturer
  • Model
  • Choosing a new or refurbished machine

The Perks of a Refurbished Machine 

The biggest advantage you might have as an investor is you don’t have to purchase an entirely new product. If there’s an option, such as the one presented here, then claiming that option is the smartest move. 

I mean, new machines are a bit preferred for new ATM owners. Since everything is new, the technology is easy to use. On the other hand, purchasing a refurbished machine isn’t a foul option either. 

Firstly, it could save you a lot of money. This way you can speed up your setup process and the return on investment (ROI) will also be high.

Overall, having a refurbished machine over a new one is the most financially sound decision. 

But again, it’s your own sole decision as an ATM business owner, to select what’s best for long-term passive income.

If there’s no good refurbished option available in your vicinity, go for buying a new one.


This is the company whose ATM you’ll be buying. Now there are a lot of companies that manufacture good machines, some of them include: 

All these companies offer high-quality and durable machines which not only work for a long time but also look good doing it. These industry titans all produce sturdy equipment which, even old, works like a charm.

Of course, all these companies have ranging price levels. Some price their piece for less while others don’t. You’ll have to set your budget first before you can set out on manufacturer scouting. 

» You can also read my post: $400 Per Month? — Vending Machines as Passive Income

#3 Determine Your Location 

The best places would be at a busy restaurant or some store. This is mainly because you’d have to look for a place with high foot traffic, cash only, good reviews, and be at a farther distance from other machines.

If you put your machine in a shady seemingly non-existent spot; no one will use the machine. But if it’s in a robust downtown area chances are a lot of people will need to make money transactions.

That’s why location is the most crucial step in your ATM passive income. 

Also, make sure that there aren’t many ATM options available nearby while selecting a location. You don’t want to take on much competition when installing your first ATM machine.

Owned or Rented Space? 

If you rent out someone else’s property, you’ll have an extra cost of the rent. This then has to be split from the revenue you’ll earn.

However, these places are always likely to be more visible. In this case, there are greater chances of consumers seeing your machine. 

Another option would be to strike a deal with the location owner. Any ratio of the revenue you earn can be settled upon and in turn, you can keep your machine in its space. 

Keep in mind you would then need to split your revenue accordingly so you should remember the ratio when calculating the profit, too.

Once you have cleared the technicalities, determine whether you want to rent a space or own one, keeping in account your budget.

What Are the Most Profitable Locations?

Some of the places which are sure to make you a lot of money include places like 

  • Gentleman’s club
  • Hotels 
  • Convenience stores 
  • Salons 
  • Barbershops 
  • Restaurants 
  • Parking spots 

These are just some of the places which are guaranteed to make you good money. Though the profit will vary on the success of their business, which is also something you should consider. 

When looking for the best location, look for a well-run business that has good cash income. The places I’ve mentioned above are good for starters, and then you can buy more machines and place them in different locations as your business grows.

#4 Setting Your Surcharge 

A surcharge is a money you give to withdraw your cash from the ATM. This is how you earn money. Every transaction has a set surcharge amount which is deducted. 

This piles up and is then transferred to your account. 

For each transaction, you get your surcharge. Now, setting your surcharge is a very technical process. You cannot just blindly set it at $3. 

If that’s the amount you go with it has to have some logic behind it. By now it’s clear that this income stream requires a lot of thinking. 

How to Set Your ATM Surcharge? 

The ideal surcharge amount for ATMs is around $2.50 per transaction. This is dependent on the demand in your area and if the area already has a machine. What’s great is you can also change the amount anytime you wish. 

I’d advise you to keep your charge low in the beginning. You don’t want to scare away potential customers with your high rate.

Take it slow and gradually increase the rate as you reach a stable number of transactions. 

You’ll also want to take into account any splits in profit. Like I said before, this is where you need to take into account any ratios you make.

If you’re meant to split up the revenue then you can raise the surcharge as well. 

» Read my blog post about: $5000 Per Month? Here’s How Much Ice Cream Trucks Make!

#5 Bag In Your Profit 

You might’ve gotten disheartened overhearing the surcharge is only $2.50 at max. But that’s one transaction that gives you $2.50. The more transactions your machine makes the more you’ll make. 

Once you’re starting, you’ll need to do some trial and error to set your pace and get familiar. Fortunately, with ATMs, you have a lot of growth opportunities. 

Your profit depends on how much people use your machine. As long as it’s in regular use, you’ll make some degree of profit. Getting people to use it is difficult( again it all depends on location).

If everything goes well you should be able to make $450 per month of gross revenue. 

As far as your ROI is concerned, you can easily expect a 40%-70% cashback if your machine makes at least 100 transactions per month.

All this is easily achievable only if you can pay ample time to your passive stream and make it grow authentically — It will eventually turn into an absentee business.

The Complexities of Owning an ATM Business 

As you’ve already guessed, starting an ATM business isn’t easy. There’s so much to consider that you’re bound to forget a point or two. The barriers you’ll face in entering an ATM business are low but not zero. 

To name a few you’ll mostly have to deal with the competition, security issues, and coping with the technology, too. Here’s a detailed overview of each issue. 

  • Competition — ATMs have not been around since just yesterday. They’ve been here for a long time now. And with this, others have already taken up all the prime locations which you could’ve chosen, too. Since the passive stream is so mature there’s a lot of saturation. Therefore, finding the perfect spot is the competition owners have to face. Sometimes you might end up in a place where an ATM already exists. So competition is a tough barrier to get past. 
  • Technology advancements — Biometrics and all the new tech-savvy terms are hard to get acquainted with. Since ATMs are purely tech too, it sometimes becomes difficult to adhere to such terms and you may find yourself in a predicament. The only solution to this is to raise your IT knowledge whether by doing courses or searching the internet for different terms and becoming familiar with them. 
  • Security dilemmas — Bearing in mind we are dealing with cash here, security becomes a big issue. From cash storage to unloading it in the machine; all this requires solid security to make sure nothing illegal happens. No one wants to wake up to the news that their ATM was robbed, that’s why setting tight security locks and keeping it in a sound place is very important.  
  • E-commerce — As we progress, people’s cash intake has lessened and they’ve all made their move towards debit or online transactions. This can seriously curb your passive income stream since fewer people will make money transactions and would instead pay digitally. If this becomes increasingly prevalent then you might face some hard times. 

These are just some of the struggles you are likely to face when starting your ATM business. This may seem like all hope is lost but as you can see, even despite all these people still buy ATMs and start their passive stream. 

It’s important to remember that every problem has a solution. 

» You can also read my post: Top 25 Side Income Ideas For College Students

Ending Words 

In the end, I think, it’s important to realize that these streams aren’t made for everyone. Some people just cannot handle the pressure and critical thinking. However, there’s no harm in trying and so, you’ll never know what you can or can’t do until you try to pull it off at least once. 

About topworklife.com Hi' my name is Simon. I am the owner of Top Work Life. Together with a my team, I write content about income generating ideas, entreprenurship and growth as a person Read more about Simon & TopWorklife

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