In today’s fast-paced world, people are using cash in their daily spending due to the advances in the populace of society, especially in remote areas and small towns. ATMs are an important device for people willing to withdraw money or perform other operations concerning one’s account. Since the banking institutions enlarged their networks, franchises for automated teller machine business ventures as a form of investment have been widely preferred by people due to their fixed yield income. Want to be an ATM Franchise Business? Let’s see to know about the eligibility criteria, procedure, cost, and requirements of the business. This article is going to give you everything that you would want to know and more, contributing to your decision-making.
What is an ATM Franchise?
An ATM franchise is a kind of business where a certain person or company comes into an agreement to offer and manage a number of ATM facilities in various areas with the assistance of a financial company or a third-party operator of ATMs. Such places may include retail outlets, malls, bus stations or any other place where people congregate. A franchisee is fully in charge of the mechanical, physical and customer-related functions of the ATM, while the bank or financial house only supplies the machine, the software and the backup.
Eligibility Criteria for an ATM Franchise
However, any potential applicant looking forward to going into the ATM franchise business must meet some basic requirements. Financial institutions typically look for franchisees who meet the following requirements:
- Minimum Age Requirement
It is typical that most financial institutions or ATM operators want the applicant to be not younger than 21. This serves to reduce the likelihood of having a franchisee who is hap-hazard in management of the business.
- Financial Stability
Franchisees must demonstrate financial stability and the ability to handle initial investments. Since ATMs require both setup and maintenance costs, franchisees need to have adequate funding. Some operators may require the franchisee to show a minimum annual income or a certain level of financial assets.
- Availability of Space
You will have to find sites that planning processes will allow to install and locate the ATM machines. This includes places where people walk many times such as malls, train stations or busy areas. The availability of these spaces will help to drive up the profitability of your franchise.
Procedure to Start an ATM Franchise
Being in an ATM franchise requires the following techniques. Here’s a step-by-step breakdown of the procedure:
- Research and Identify ATM Operators
To begin with, one can study different ATM operators or other financial institutions providing services of ATM franchising. Such banks as SBI, HDFC, ICICI and private ATM service operators including AGS Transact Technologies can be taken. There is therefore the need to have a good understanding of the various terms of the franchise agreement.
- Submit Application
After choosing your ATM operator, the next thing is to apply while applying you have to meet certain requirements. The input of the information, which will be required in this application, includes personal information, financial information, and suggested location for the ATM. Some operators may also wish to see a business plan showing the amount of money that you expect to earn and the cost you expect to incur.
- Verification and Approval
Once the application is submitted, the ATM operator shall then ascertain the applicant’s suitability of operations. These may involve criminal back ground checks, credit checks, and evaluation of their circumstances with regards to their potential location. In the cases when all the requirements are fulfilled they will approve your application.
- Sign the Franchise Agreement
If your application is approved you will be expected to enter into a franchise agreement. This legal agreement contains information about compensation, obligations, and the franchise agreement period. It will also establish the revenue-sharing mechanism, which will make it clear the amount you are expected to receive from ATM business.
- Location setup and ATM Installation
After signing of this agreement a ATM operator will go ahead and install the ATM at the agreed area. This may include, establishing the position of the machine, fixing it to the network and guaranteeing that all the software and the other relevant hard ware are working. Another area of responsibility falls under the lot of franchisees and they have to ensure that the ATM is secure from theft.
- Training and Support
A majority of the ATM operators have training programs for the franchisees. These programs comprise working and performing operations on ATMs, ways of refilling the cash, problem-solving, and treatment of customers. Help may be regularly given to ensure the franchisees successfully operate the ATM business.
Requirements for an ATM Franchise
Location
- Target thoroughfares like shopping centres, railway stations, business premises, and others.
- The environment where the calls will be held must be safe, convenient and allow the calls to be conducted at any one time without interruption of electricity supply and internet connectivity.
Infrastructure
- It is equally important the location offers some electrical outlets to connect various devices, internet option and secure building.
- Light and cleanliness should be appropriate to ensure safe environments and user friendly.
Compliance and Licensing
- Implement and adhere to the law governing the Country especially in relation to Reserve Bank of India (RBI) in operating ATMs.
- Get the relevant licenses which would enable to fulfill RBI norm related to security system, money management and consumer security.
Cost Involved in Starting an ATM Franchise
Business people wishing to venture into the ATM franchise industry need to make some considerable investments. The costs are relative to the ATM operator, geographical location, and the type of franchise whether it is one or many ATMS. Here’s an overview of the main costs involved:
- Franchise Fee
This is the initial costs that you have to make to the ATM operator for being granted the franchise to operate a franchise. This fee normally varies between 1,00,000 to 10,00,000 depending upon the operator and the size of franchise.
- ATM Setup Costs
Costs incurred while putting up an ATM machine are the actual value or rental cost for the machine, installation fees and cost for the software to run the machine. The expense can range between ₹3 lakh to ₹5 lakh for each ATM, According to the senior management officials interviewed by The Times of India. If the machine is leased, the leasing charges may also depend on the ATM operator’s understanding.
- Maintenance and cash Replenishment
Operating expenses, also known as expenses linked with the ongoing operations of an ATM, are cash replenishment, machine maintenance, security services. Such costs might be inclined with the total volume of transactions and the number of the ATM machines. For maintenance and for cash replenishment you may require anything between ₹30,000 and ₹50, 000 lining per month on an average.
- Security and Surveillance
If considering the security of the ATM machine and the cash, you will have to install security features like surveillance cameras, alarm systems, and cash containers. These security measures amount to between ₹ 50000 to ₹1 lakh depending on the location and level of security needed.
- Revenue Sharing and Operating Costs
Each of the ATM franchisees commonly receive some percentage commission from the transaction that is processed through the ATM machine. According to revenue-sharing model, the portion may vary from operator to operator; normally, the franchisees get a percentage based on transaction fees. Other overhead costs such as rent, salary of attendants if any, and other utility bills also have to be considered.
How to Choose the Right ATM Franchise Provider?
Choosing the proper ATM franchise provider is important so that you may get success in your business. Here are a few tips to help you make an informed decision:
- Research the Operator’s Reputation: For instance, it might be necessary to seek for an operator over the internet and make sure that they have been receiving good remarks of the existing franchisees.
- Assess the Support Provided: Make sure the operator provides sufficient training, maintenance, and assistance in case of problem resolving.
- Evaluate the Revenue Model: Select a provider with a sound financial revenue-sharing model that you envision will only produce good financial results.
- Understand the Terms and Conditions: Generally peruse the entire franchise agreement in order to determine terms, fees and conditions that are enforceable.
Conclusion
The ATM franchise business model is a very good way to begin a business in the financial service industry because it appears to have a good profit potential for the potential franchisee. The facts are that, provided you carry out extensive research, secure the best possible site and provide a sound financial base, you can make a successful and profitable ATM franchise. By following the eligibility criteria, following correct procedure, and making proper investments and infrastructure, one can avail the potential of ATMs and serve public with important service.
