WE’VE all cursed, and paid it before.
The $2.50 charge to use those convenient ATMs found in pubs, clubs and convenience stores is up there with charging for sauce when you buy a pie.
So who actually gets the money?
Own your own ATM CEO Matt Towner runs a company that helps people invest in ATMs. He said the stand-alone machines you find dotted around cities are owned by individuals as investments much like property or share portfolios.
The $2.50 you pay to use them is split three ways. To be clear, we’re talking about private ATMs here, not the bank-owned ones.
• $1.20 goes to the ATM service provider, a company who takes care of everything from insurance to software upgrades.
• $1 goes to the venue which will always be a busy location.
• $0.30 cents goes to the ATM owner who has paid for the machine upfront.
So are they a good investment?
Mr Towner said the ATMs range from $11,000 to $28,500 depending on the type of machine and size.
To invest, individuals pay the upfront cost and then the machine is maintained by a service provider responsible for choosing the location, stocking them with cash, keeping the software up-to-date and the machine serviced.
While returns depend on how frequently the machine is used, Mr Towner said an $11,000 machine would earn a minimum of $235 per month - meaning it would be used more than 26 times per day.
This will earn more than $2800 per year for the investor, which when combined with keeping the profits in a high-interest saving account, would take around four years to pay off.
“It’s because of convenience these days. People don’t want to be driving or walking around the block. They want money when and where they can,” Mr Towner said, adding that location will be determined by the ATM service provider who will do their own due diligence as to where they should be installed.
Despite the investment potential, Choice spokesman Tom Godfrey said consumers should be wary of using these ATMs as the charges can quickly rack up.
“Private ATM fees are out of all proportion to the costs of giving consumers fair access to their own money. For example, the growth of ‘own your own ATM schemes’, promising substantial returns to investors, shows that this has become a lucrative industry, when in fact it is a basic banking service, and one that should reflect the underlying costs.”
He said the UK experience shows it’s possible to run a network where cash withdrawals are free of charge and consumers should watch their behaviour to ensure they’re not being unnecessarily charged.
“To avoid being slugged with a $2.50 ATM fee its worth avoiding private ATMs. Most banks do not charge their own customers these unnecessary fees when using their own ATM network,” he said.
Do you pay the ATM fee or use your own bank ATM? Continue the conversation on Twitter @newscomauHQ
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