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Locking Down Great ATM Locations at High Margins

PAI – Jun 5th, 2014

ATM locations

What makes a good location for your ATM machine? Is it foot traffic? Visibility? High volume sales?

In truth, the answer may be a little more involved than you first suspect. Yes, location and foot traffic are key drivers. However, it is important to remember that a popular location with a lot of foot traffic does not automatically equate to a successful ATM business.

When it comes time to look for an ATM location, one that will ensure profitability and high margins, below are a few variables you will want to consider:

ATM Uptime: Seasonality and Availability

Your ATM offers the opportunity for continued revenue generation. It never gets tired, and it never asks for a vacation day. In short, as long as customers have access, your ATM will generate revenue.

With this in mind, carefully considering the locationís operating hours becomes critical. Stores and locations with limited operating hours, or ones that close on specific days of the week, will prevent potential customers from accessing your ATM.

Additionally, seasonality plays a major role in revenue generation. Locations that are subject to seasonal ebbs and flows (e.g. hotels, sporting events, vacation spots, etc.) will limit the number of potential customers.

ATM Competition: The Good and The Bad

Having other ATMs in the same approximate location is not always a mistake. Competition aids in driving location credibility, and it helps potential customers recognize the area as a convenient spot to access cash.

Keep in mind, this does not mean that you should place your ATM directly next to a competing machine. However, if the area is heavily trafficked, it may be wise to find a similar location for your machine. For instance, if there is already an ATM in a hotel, you may want to consider placing another ATM in an adjoining restaurant, or in the store next door.

High Volume Sales: Evaluating the Need

Remember, foot traffic does not always mean success. To ensure a high return on your investment, there has to be a corresponding need for cash.

ATM locations that reveal the best margins are those with a high volume of cash sales. For example, an area with a number of upscale businesses and restaurants is probably not the best location. While these areas may offer a lot of traffic and a large number of sales, chances are most of those transactions are taking place via a POS credit and debit card machine.

Instead, you will want to consider areas where the primary method of payment is cash. This can include informal dining locations, recreation areas, or outdoor amusement areas.

Positioning: Donít Get Lost In the Crowd

Visibility also plays a key role in returning a high profit margin. In other words, even if the area offers a high demand for cash, your ATM will do no good if potential customers cannot find it.

To ensure visibility, you will want to look for a location with a minimum number of obstacles. Look for an area that stands out, one with a clear line of site to potential traffic.

In the end, an ATM machine only requires two square feet of space Ė meaning you can potentially put one anywhere. However, this certainly does not mean that you should place it anywhere. Instead, to maximize revenue and potential, you will want to look for an area with high demand and availability.

Tags: [ATMs]