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Brick and mortar business owners have two very strong incentives to purchase and install ATM machines in their storefronts, as well as a few lesser reasons that depend on how a number of situations play out over the next few years. The main advantages that stores in Canada with an ATM enjoy are increased foot traffic and increased revenue. The increased income results from the fee the storeowner can charge on each ATM withdrawal and the increased purchase size that results from customers being able to exercise payment options other than retail credit easily.
The first benefit is not to be taken lightly. Some ATM providers claim an ATM sign outside a business leads to roughly 25 percent more foot traffic for a given period. Coupled with even a 5 percent increase in the average value of the purchase, and assuming the same conversion rate on foot traffic, the result is a 31 percent increase in sales revenue for a given period. So the first benefit of ATM machines can have a very significant impact on profits.
Several factors go into increased revenue, beyond the effects of the foot traffic. First, store owners can set the surcharge rate for the ATM in their store, so each withdrawal generates some income, which is usually more than enough to offset the costs of buying or leasing and maintaining the machine. Second, consumers are likely to appreciate the convenience of the ATM, which encourages return business and higher purchase sizes. And finally, there is no payment processing fee when customers use cash, so the actual purchase costs the merchant less than if the customer had paid with credit or debit.
There are a number of online calculators to help merchants estimate the financial benefits of an ATM based on their average customers per day and other features of the store, and the hard numbers tell the same story. For most merchants, the books just look much better with an ATM onsite.
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