ATM Machine Services

Something that we haven’t really spoken too much before is the topic of ATM Machines.  In the traditional sense, ATM machines are bank own and operated devices that customers can use to withdraw cash from.  However, the current market is flooded with what we refer to as white label ATM machines.  These machines are not owned by the banks but rather owned by companies that install software that’s been certified and can connect to the Financial Institutions.  It provides the same cash withdrawing capabilities as a Bank ATM but cannot be used to deposit money or complete any other financial transactions.

So what are the benefits of having a white label ATM machine in your store?  First of all, it’s a convenience for your customer.  If your customers prefer to pay with cash, they have accessibility to their money without having to leave your store.  It could drive new business into your store.  Customers who may not have come into your store typically may come in to have to take out cash and while there, could do some shopping.  It can also be a revenue generator.  The fees that are typically charged at these white label ATMS are typically higher than those of an FI ATM.  This is because part of that transaction fee actually goes to the merchant.

And the downfalls?  Well, these are what need to be considered carefully.  First, most white label  companies will require you to purchase the machine as opposed to offer a monthly rental fee.  So you will need to have the initial investment to put down.  You can expect the machine to cost anywhere between $2000 to $4000.  What this also means that you will be responsible for ensuring that there is a service agreement attached to the contract you sign.  You need to ensure that if something goes wrong with your machine, that someone will be able to fix it or replace it in a reasonable amount of time.  All this aside, perhaps one of the most critical things to consider is that a lot of these white label machines have not been chip enabled.  Meaning they are not using the chip to read the data off the cards and instead still resorting back to read the swipe.  This makes these white label machines extremely attractive to fraudsters.  Fraudsters will go to these machines with counterfeit cards made from stolen data and attempt to take out as much money as possible from each card.  Because the magswipe’s data is not as secure, it’s easy for them to complete the fraud.  Since all Financial Institutions have migrated their ATM’s to chip, the fraudsters are focusing their attentions on white label ATM’s in high traffic areas with low surveillance.  As with most fraud instances… while you as a merchant may not be ultimately responsible for funds stolen from someone’s bank account… all it would take is word to get out that the fraud was committed through your machine.  That’s enough to keep some customers from coming back.

So if you are considering installing a white label ATM, consider your options carefully.  Choose a company who has migrated to chip or plans to in the near future. It will save a lot of time and headache in the long run.

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Matthew Hunt has been helping small businesses get set-up with Canadian Merchant Account Services since 2007 and helped 1000's do so. Join Matthew on Google+.

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