Front cover of Transaction World Magazine Issue 1, Volume 6 - 2001

Transaction World Magazine Article, Volume 1 Issue 6 – [2001 Revisited]

Are ATMs the New Plastic

Merchants and Consumers are Choosing Cash Over Credit

From Transaction World Magazine – Volume 1, Issue 6 – Cover Story 2001

The customer has spoken. More than ever, cash is king.

A cautions economy, the high cost of credit and the growth of the ATM industry have spurred a purchasing revolution. As a natural occurrence, customers are moving from credit card purchases to debit cards as their preferred payment method. According to a MasterCard consumer segmentation study, among people that use both credit and debit cards, debit cards are used more than five more often 5.9 times per month vs 5.1 times per month for credit cards.

In a reverse of financial trends a decade ago, many experts believe the credit card industry is showing stagnant growth. By contrast, the booming ATM Marketplace is finding its machines in an unprecedented number of locations. In fact, a recent Nielsen report predicts that by the Year 2005, the number of ATMs will double from 1997 numbers. For bank card ISOs, this presents not only a challenge but also a significant opportunity.

ISOs and Merchants alike are finding that ATMs mean sales. Credit union industry experts estimate that more than 60 billion consumer transactions flowed over ATMs in the year 2000 and the customers are using this platform more than any other Financial Service delivery point. At the same time, trade Publications in the restaurant, quick-serve, hospitality, and convenience store Industries report that ATMs increase foot traffic, boost per visit spending, cut down on check fraud and reduce credit card fees.

Statistics tell the story. In the restaurant industry, for example, Association reports show that colon

  •  ATMs increase traffic up to 30% and increase per visit sales 10% to 20%.
  •  Up to 80% of cash obtained at ATMs in host bars and restaurants is spent on site. 
  • At Quick Serve restaurants, we’ve seen the average check increase up to 58%.

In addition, experts predict that demand for kiosk ATMs will grow exponentially as the population of Internet Savvy, self-service oriented customers grows. An August 2000 overview by Dove Consulting observes that consumers under 55 are particularly likely to use ATMs and are “completely comfortable conducting ATM transactions”

The evolution of a revolution

On the downside of the ATM opportunity, even the industry’s most ardent supporters admit that it has had its share of unscrupulous dealers. Salesman with an eye to make a quick buck often promised outrageous returns while failing to deliver on those promises. Other abuses resulted in customer service nightmares through the place of undependable equipment. While some of those businesses still exist —and need to be warned about — you can find ATM specialist firms that are sophisticated, dependable partners.

The strongest ATM organizations are those with solid institution affiliations. The scrutiny, Financial backing and network capabilities offered by these relationships established an unprecedented level of professionalism. At the same time, ATM companies with strong ISO support have become increasingly attractive to banks, which recognize the need to penetrate markets and establish quality representation in the field. 

Business stability and financial reliability within the ATM industry have accelerated the acceptance of merchant ATMs as has the proven recurring income stream generated by ATMs. However, recognizing the competitiveness within the ATM industry has increasingly demanded a higher level of ISO accountability, profits, service, and support. Electronic Benefits Transfer (EBT), Internet-accessible transaction report, fast lease approvals, and equipment installations, as well as capabilities to accept cards from major networks, are common expectations. 

ISOs have had to rely on solid corporate relationships in order to deliver on these demands and still generate significant returns.

ATMs have also proliferated because manufacturers have built machines to be easy loading, secure, reliable and virtually maintenance-free. In addition, the size of the equipment has decreased and lease/purchase costs have come down; the newest machines have footprints smaller than two square feet and pay for themselves with as few as four swipes per day!

ISO Opportunity

While ATMs have boomed, experts predict there’s still plenty of room for growth. Certainly, independent stores remain a strong ATM market. But you can also expect ATMs to pop up in nontraditional locations. . .tennis courts to courthouses, beauty parlors to bingo parlors. In addition, there’s a growing interest in system branding, where companies such as McDonald’s, major hotel chains, American Express, Safeway and Winn Dixie install ATMs reflecting their unique corporate identities.

At the same time, ATM fees are also becoming widely accepted. Market research tracks that younger users are much more willing to incur charges for the conveniences provided by ATMs. And as technology continues to expand ATM capabilities and deliver new services to consumers, one can easily predict that additional features will translate into additional usage… and additional residual income to boot! For the ISO, ATMs dispense opportunity. Because if cash is king, ATMs are the keys to the treasury.

Choosing the Right Partner [Still holds true today – in 2020]

Choosing the right ATM company is crucial to the success of an ISO. Here’s a quick checklist to ensure your partner is a strong organization.

Financial Strength

Is your ATM company affiliated with a major financial institution? Has that institution supported technology development and system upgrades?

[2020 update – Yes, ATMDepot aligned itself with several major institutions that have all supported technology and continue to look to the future. Noah Wieder wrote this article almost 20 years ago and the future is today!]

Track Record

Who are the ATM company’s customers? Can you talk to affiliated ISOs and merchants for references? [2020 update – ATMDepot runs one of the most active ATM Entrepreneur groups on Facebook. You can join and talk to many of our customers and affiliated IADs as well as read reviews online. Want to talk to one of our customers, no problem, just ask and we’ll be happy to give you as many references as you want].


Are approvals handled in a timely manner, creating a quick turnaround between the time a lease is signed, a machine is installed and when you get paid? [2020 update – very few ATMs are leased since pricing has come down to less than 1/2 of what they were almost 20 years ago. Machines are typically shipped within 5 – 7 business days of order].

Program Scalability

Can your ATM company provide service to any size merchant, from single locations to hundreds of sites? [2020 update – of course ATMDepot can. We manage thousands of ATMs. From single store owner locations to multi-family routes run by some of the best IADs in the country!]


Is there a dedicated sales support team for distributors? Are problems handled promptly? Are machines kept operative? [2020 update – Absolutely. We wouldn’t still be here if we didn’t. ATMDepot has been helping ATM business owners since 2003 and Noah Wieder is the Owner!]


Will you have ongoing Internet access to daily activity reports? Are detailed statements provided? Are residuals tracked and paid in a time1y manner? [2020 update – of course, Noah Wieder wrote this article almost 20 years ago and still maintains all of the important partner qualities that he looks for and provides to all ATMDepot customers – IADs and Merchants alike.]

ATM Factoids [unable to verify these same stats in 2020, however, the first one is close, unsure about the next two]

  • The typical ATM customer spends 20%—-25% more than a non-ATM customer. 
  • 40% of regular ATM users use the ATM an average of ten times per month. 
  • 60% of Americans 25-34 years old and 51% of Americans 25-49 years old use ATMs eight times a month and withdraw an average of $55 each time.

How Much Does it Cost?

The average cost of various payment methods (based on time to make a payment, backroom time to prepare deposits, bank charges and other charges such as collection fees) are as follows [from 2001]

Cash  $0.07
Electronic Benefits Transfer  $0.15
Food Stamps  $0.16
Debit Cards  $0.29
Electronically Authorized Checks  $0.37
Checks  $0.43
Credit Cards  $0.80


Transaction World Magazine Volume 1, Issue 6, 2001 page 7

Transaction World Magazine Volume 1, Issue 6, 2001 page 8

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