3 Min Read
One of the most expensive mistakes an ATM operator can make is installing a machine in the wrong location. Every ATM placement requires time, money, equipment, cash, and ongoing service. If the location never generates enough transactions to justify those costs, you've tied up capital in an asset that produces very little return. While no one can predict the future with complete certainty, there are several indicators that can help you identify a low-performing location before you ever install an ATM.
The first thing to evaluate is customer traffic. A business may appear busy at first glance, but not all foot traffic is equal. Ask yourself how many customers actually walk through the door each day and, more importantly, how many of them are likely to make purchases that could require cash. A store that sees only a few dozen customers daily will naturally have a lower ceiling than one serving hundreds of customers. Transaction volume almost always follows customer volume.
Next, consider whether the business creates a genuine need for cash. This is one of the biggest differences between average locations and exceptional ones. Businesses like dispensaries, cash-only restaurants, gaming establishments, strip clubs, flea markets, and busy gas stations naturally generate demand for cash. On the other hand, businesses where nearly every customer pays with a credit card or mobile wallet may have little reason to use an ATM. The best locations don't just have customers—they have customers who actually need cash.
Take a close look at the payment methods the business accepts. If the owner proudly tells you that almost every customer taps a credit card, uses Apple Pay, or pays online, that's valuable information. It doesn't necessarily eliminate the opportunity, but it should lower your expectations. Conversely, if the business is cash only or regularly encourages cash payments, you've identified a much stronger candidate for an ATM.
The average transaction size can also reveal a lot. Businesses with higher average tickets often have customers carrying or spending more money, while very small purchases may not create much ATM demand. A customer buying a $2 bottle of water is less likely to withdraw cash than someone making a larger purchase or spending an evening at an entertainment venue. Consider not just how many customers visit, but how they spend their money.
Another important factor is the surrounding environment. Even if the business itself isn't particularly cash-intensive, the surrounding area can increase ATM usage. Is the location near bars, nightlife, apartment complexes, public transportation, casinos, stadiums, or entertainment districts? Are there several businesses nearby that either don't accept cards or encourage cash? Sometimes the neighborhood creates demand that the individual business cannot.
Competition should also be evaluated. If another ATM is already located inside the business or immediately next door, you'll need a compelling reason why customers would use your machine instead. Likewise, if a bank branch with multiple fee-free ATMs sits directly across the street, your transaction potential may be significantly lower. Understanding the competitive landscape helps set realistic expectations.
Don't overlook the owner's attitude. An engaged owner who believes an ATM will benefit customers is far more likely to help your machine succeed. They may place signage, direct customers to the ATM, or encourage cash purchases. On the other hand, if the owner views the ATM as an afterthought or isn't willing to support its presence, usage may suffer regardless of how good the location appears on paper.
Whenever possible, ask questions instead of making assumptions. Find out whether customers ever ask where the nearest ATM is. Ask if people leave because they don't have cash. Learn whether the business has ever had an ATM before and, if so, why it was removed. These conversations often reveal information that you can't observe during a short visit.
Finally, remember that excitement should never replace due diligence. Every operator has walked into a business and immediately thought, "This would be a great ATM location." Sometimes they're right, and sometimes they're not. The most successful ATM operators rely on data, observation, and experience rather than gut feeling alone. They know that saying "no" to a weak location is just as important as saying "yes" to a strong one.
Building a profitable ATM portfolio isn't about placing the most machines—it's about placing the right machines. Every installation should be viewed as a long-term investment. By carefully evaluating customer traffic, cash demand, payment habits, competition, surrounding businesses, and owner engagement before you install, you'll avoid many of the low-performing locations that drain time and resources. A little extra research today can save months or even years of disappointment down the road.