Owning your own cash machine

While most people’s bank balance goes down each time they visit an ATM, changes to the bank interchange fee system mean that it is now possible to own your own cash machine – and profit every time someone makes a withdrawal.

Own Your Own ATM director Corr Piccone said the public had always been able to buy ATMs, but deployers had previously been unwilling to let others fund the machines.

“The reason why this has become attractive to deployers is that the bank interchange fee has been abolished as of March 3. This means that the non-bank deployers are the real winners, as overnight they went from getting $1 per transaction to the whole $2 per transaction,” he explained.

“Even with the deployer paying the ATM owner $0.20 per transaction, the deployer is still $0.80 ahead since the changes while keeping debt off their books.

Piccone said the owner would get $0.20 per transaction or $235 per month per machine, whichever is higher.

 If you get a machine in a higher volume location sometimes they do 2000 or 3000 transactions in a month,” he said.

Piccone said the cost of obtaining five machines through his company was $77,000, with the deployment companies guaranteeing the 20% returns for the first five years.

“It is a five year agreement – with an option for a further five year term. The reason why it is broken into five years rather than a continuous agreement is that the sites themselves are only signed for five years at a time,” he explained.

“Once you have purchased the machine there is no further cost – all maintenance and ongoing efforts are covered by the deployer. The only downside is if one of the deployers goes bankrupt, which is very unlikely.”

Piccone said the interest level had been “massive” but actual conversions were more difficult.

“[People] are all so scam-wary – the thing I hear so often is ‘this looks too good to be true’,” he acknowledged.

“The main question people have is ‘why wouldn’t the deployers fund it themselves?’ but if you didn’t have to go into debt, why would you? You are a much stronger company if you have less debt. This is an opportunity where the deployers were given an extra windfall and for $0.20 per transaction they can get the debt off their books.”

Piccone said there were several other issues to consider before purchasing the machine.

“The 20% [return] throws people, because if you stick $10,000 in a bank and are paid interest of 20% per year, at the end you are still left with the original $10,000 but in this case the ATM depreciates in value,” he warned.

“At the end of the [contract period] you get the opportunity to replace the machine and start again [by purchasing more machines] or you can walk away from it.”

Buyers should also be aware that they were buying into a business – not an investment.

“Buyers are essentially entering the ATM ownership business,” he said.

However this could also prove beneficial for buyers who may be eligible for government small business tax concessions announced in the recent stimulus package for purchasing assets, he concluded.

How to do it

Several companies offer ATMs for sale:

Own Your Own ATM –
www.ownyourownatm.com.au

My ATM – www.myatm.com.au

For more information about the changes in bank interchange fee see the Reserve Bank of Australia’s website – www.rba.gov.au/PaymentsSystem/Reforms/ATMFeeReforms/