What's up with ATMs in delis?

June 18, 2008 9:40 AM

What is the relationship between delis and the owners of the ATM machines that are inside them? Are the machines "free" to the deli owner? Or do the ATM owners pay the delis? If they do pay, how is it done - a flat fee or a variable fee depending on use? (I'm asking purely out of curiosity).
posted by Shebear to Work & Money (6 answers total)

Best answer: Sites like this one offer a "turnkey" solution with free atm placement and they handle everything, giving the business owner a percentage of the surcharge fees. However a situation like that requires a large amount of foot traffic to qualify. My guess is the smaller mom and pop type stores that are cash only and have an ATM on site might be leasing or buying the ATM. In a case where you lease or buy, you are responsible for making sure there is enough money in the machine (which you are reimbursed for when it is withdrawn) but the surcharge is completely yours. I guess the idea is if you buy one and accrue surcharge fees (while being reimbursed for all the cash you keep in it) then you can offer your customers the convenience of an on-site ATM and make up the loss from the cost of the machine through those surcharges.
posted by genial at 10:12 AM on June 18, 2008

Here are some interesting details about the benefits of these ATMs to a business, and a suggestion that the business doesn't pay at all. It could make sense, given that the ATM company takes a fee with every transaction anyway.
posted by galaksit at 10:13 AM on June 18, 2008

A co-worker has a buddy in the free ATM business and he agrees with genial. He adds that for purchased/leased ATMs, a bit of the surcharge covers data access, ACH membership and cash transportation, but it's a small fraction of the surcharge.
posted by infinitewindow at 10:17 AM on June 18, 2008

I met someone who works for a private ATM service company once and he told me a lot about it. The only thing I remember was that while most private ATMs charge "standard" fees (e.g. $1.50 in most of Canada) and some charge a bit more, some locations charge exorbitant fees - specifically strip clubs where the ATMs charged $20 for a withdrawal. So I took it that owners got to set whatever fee they felt they could get away with charging.
posted by GuyZero at 11:09 AM on June 18, 2008

Best answer: I have a few friends who own bars, and this came up recently, and there are a few ways to go: individuals (i.e. the bar) can own machines, in which case they do the maintenance and refill the receipt paper etc., and they take all (I think) the fees. A more popular alternative is for a 3rd party to supply the machines and handle maintenance/paper (apparently receipt paper is the major operating expense) in exchange for a small (~20%) cut of the transaction fee.

Obviously there are different deals available; a conniving machine owner could probably weight the deal more heavily in their own favour.

I can't think of any arrangement whereby the business owner pays to have a machine in his place. From what I understand the private ATM business is very lucrative, and there is lots of competition to place machines.
posted by cmyr at 12:41 PM on June 18, 2008

Questions about ATMs like this always remind me of DeWayne McKinney. This guy went from prison in L.A. to a booming business here in Hawaii thanks to strategic placement of these machines. There was a fantastic profile in the L.A. Times (free abstract here) that explained a lot of how the arrangement works. I can't find the full text anywhere, but here's a commentary on the article itself, which contains most of the piece.

An excerpt: In the business world, it's called networking, and McKinney was good at it. Every acquaintance became a possible lead, like the auto detailer who introduced McKinney to a market owner who agreed to house a cash machine. McKinney tipped the detailer $500 for the lead. Now, all the workers at Island Auto Detail have his business card and are keeping their eyes peeled for ATM locations. A meeting with his insurance broker led to another deal. The agent's brother, it turned out, operated the snack shop at the Honolulu Zoo. McKinney soon had an ATM there. It brings in about $1,250 a month.

A cut of the fees do go to the store owners.
posted by pzarquon at 1:20 PM on June 18, 2008