The Secret Business Behind ATMs

On a busy corner next to the checkout line, a plain gray ATM hums along as shoppers tap cards and grab cash. Most people assume the machine makes money only when it hits them with a withdrawal fee. In reality, that little box sits at the center of a surprisingly sophisticated ecosystem—part payments infrastructure, part retail media screen, part brand billboard, and part cash-logistics hub—where profits don’t stop at surcharges. This article pulls back the panel to map the revenue stack, the contracts, and the shifting economics that make modern ATMs pay.

The ATM Economy Is Bigger (And More Complex) Than It Looks

Globally, the installed base has been shrinking—but it’s still massive. Industry tracker Datos Insights (the former RBR) estimates the worldwide ATM count fell about 2% in 2024 to roughly 2.9 million machines, continuing a multi-year slide as digital payments gain share.

Yet “cash is dead” is an overstatement. The Bank for International Settlements (BIS) reports that while cashless payments kept rising in 2023 across major jurisdictions, demand for withdrawals stabilized—evidence that cash remains part of everyday behavior even in digital-heavy markets.

The picture varies by country. In the U.K., cash withdrawals rose again in 2024, with one large building society recording a 4.6% year-on-year increase in ATM usage—budgeting amid higher living costs nudged some consumers back to notes. Meanwhile, Sweden’s central bank shows a steady multi-year decline in both the number and value of withdrawals as the country pushes toward low-cash norms.

Emerging markets can look different again. India’s cash pull-outs have been rising, with a major cash-logistics firm reporting growth in amounts dispensed per ATM through FY2025, part of a broader story in which cash and digital expand in parallel.

Who Actually Owns The Machines?

Two groups dominate: banks and independent ATM deployers (IADs) that place machines in retail locations and run them as a business. The IAD model has consolidated around a few heavyweights. NCR acquired Cardtronics—the world’s largest independent operator—in 2021 in a $2.5 billion deal, then spun off its ATM business as NCR Atleos in October 2023. The split formalized a strategic shift: software-heavy digital commerce remained under NCR Voyix, while a dedicated entity scaled ATM networks and “ATM as a Service.”

A signature IAD product is Allpoint, the retail-based, surcharge-free network integrated into thousands of bank and fintech accounts. Allpoint—now operated by NCR Atleos—markets access to 55,000+ ATMs in U.S. retailers like Walgreens, CVS, Target, and Kroger, letting participating banks promise “surcharge-free” access to their customers without owning the machines themselves.

The model keeps spreading. In 2024, American Express selected Allpoint to expand surcharge-free access for its checking customers—illustrating how network access and branding can be bought as a service, not built branch by branch.

The Revenue Stack—Beyond The Surcharge

1) Interchange: The Quiet Workhorse

Even when consumers don’t pay a visible fee, ATM owners can still earn via interchange—a regulated, network-set transfer paid by the card-issuing bank to the ATM acquirer for cash withdrawals. U.S. network schedules (e.g., Visa’s Interlink) explicitly describe these “interchange reimbursement fees” as transfers between financial institutions, not consumer charges—revenue that flows to the ATM owner each time a cardholder’s bank settles a withdrawal. In the U.K., the LINK scheme sets a standard interchange for most withdrawals, with changes to that rate historically affecting the viability of free-to-use machines.

2) Surcharge-Free Networks & Branding Fees

If a debit card says “no surcharge,” somebody else is paying. Banks and fintechs license access to surcharge-free networks like Allpoint—often for a per-card or per-account fee—so their customers can use retail ATMs at zero out-of-pocket cost. Banks also brand third-party ATMs with their logo, paying recurring fees for the right to present them as part of their footprint (and typically to waive surcharges for their own customers). Both streams—network access and branding—accrue to the operator. Cardtronics’ filings and case studies detail how branded machines earn higher usage, combining monthly branding fees with interchange revenues (and non-customer surcharges where applicable).

3) Retail Placement Agreements (Revenue Sharing)

The reason you find ATMs next to the register is contractual. Operators sign placement agreements with retailers—convenience stores, grocers, pharmacies—often sharing a slice of transaction economics (e.g., a cut of the surcharge, or a fixed monthly commission) in exchange for prime floor space and power. U.K. competition filings around Cardtronics’ acquisitions describe how these contracts differ across multi-site chains vs. independents and how revenue sharing and surcharge settings are negotiated—underscoring that “location rent” is integral to ATM unit economics.

4) Advertising & Offers On The Screen (And On The Topper)

A modern retail ATM is also a media surface: branded welcome screens, targeted on-screen offers, coupons on the receipt, and topper displays. A decade ago, Cardtronics bought i-design (a U.K. ATM software and media firm) to deepen these ad/offer capabilities; industry coverage at the time emphasized “experience-based marketing” and campaign analytics delivered through ATMs. It’s not Super Bowl money, but ad/offer revenues improve the unit’s yield—especially in high-traffic stores where impression value compounds with transaction volume.

5) Foreign Exchange & Dynamic Currency Conversion (DCC)

International withdrawals can generate FX economics when the ATM offers to convert into the cardholder’s home currency (DCC). While consumers are often better off declining DCC, some ATMs display the converted amount, bake in a markup, and share the spread with the operator. Payments-network documents explicitly illustrate DCC cost structures—for example, a sample calculation with an 8% markup over a reference rate—highlighting why these prompts are controversial and tightly governed by disclosure rules. Consumer finance outlets routinely caution travelers about the 3–8% hit embedded in DCC.

6) Data & Analytics (To Sell Better, Place Smarter)

Operators increasingly treat ATMs as data-producing assets. The same marketing platforms that power on-screen campaigns also deliver analytics—audience sizing, offer engagement, time-of-day patterns—that help banks and merchants measure impact and optimize placements. While “selling data” is not the core business, analytics-enabled campaigns and smarter site selection (which drives higher transactions per machine) are meaningful profit levers, as reflected in media-software acquisitions and the rise of performance-tracked ATM marketing.

7) ATM-as-a-Service (AaaS): Outsourcing The Whole Stack

Running ATMs is capital-intensive and operationally messy: replenishment, armored transport, vault cash funding, hardware maintenance, network certification, fraud prevention. Many banks now outsource large parts of this to IADs as ATM-as-a-Service, paying service fees while keeping customer experience standards. NCR’s 2023 spin created NCR Atleos to focus squarely on this model; analyst and media coverage describe AaaS as a cash-generative scale business serving banks and fintechs that want ATM reach without the ownership burden.

Inside The P&L: How Independent ATM Operators Make Money

Revenue:
• Surcharges (the visible fee) when allowed by the location and network rules.
• Interchange (issuer-to-acquirer transfer) on every withdrawal, including surcharge-free ones.
• Branding & network fees from banks in surcharge-free/branding deals (e.g., Allpoint).
• Media & marketing (on-screen ads, toppers, targeted offers).
• FX/DCC spreads on international withdrawals (where permitted).

Costs:
• Location economics—commissions or rent, negotiated with retailers under placement contracts.
• Vault cash & cash logistics—cash must be funded and physically moved. Operators often pay a vault-cash rental (or share yield with a provider) and hire armored carriers; white papers by manufacturers outline how deposit automation and cash recycling reduce these costs.
• Processing & telecom—switching, settlement, connectivity.
• Maintenance—first-line (paper jams, receipt rolls), second-line (hardware modules), software upgrades, compliance (EMV, anti-skimming).
• Fraud & security—insurance, hardening, anti-jackpotting controls.

Cardtronics’ SEC filings explicitly reference vault cash providers and related expenses, underscoring that “cash in the box” is not free inventory; it is financed and managed, often by partners that earn their own yield. Meanwhile, OEM papers (e.g., Diebold Nixdorf) detail the cash-recycling/deposit tech that turns a machine from a one-way dispenser into a bi-directional cash hub, reducing replenishment runs and slashing cost-per-transaction.

For many IADs, two levers matter most at the unit level: transactions per month (improved through better placement, branding, and surcharge-free access that drives footfall) and cost to serve (lowered with merchant-fill programs, recycling, and route optimization). The Allpoint model—one in twelve U.S. ATMs are in the network—shows how aggregating retail access can lift throughput while banks foot part of the bill in exchange for customer convenience.

New Models Expanding (Or Re-Shaping) Profitability

Crypto ATMs: High Fees, Higher Scrutiny

Bitcoin kiosks and crypto ATMs create a tantalizing yield: instant cash-to-crypto sales often carry double-digit fees. But regulators have moved decisively to police the space. In the U.K., the FCA has cracked down on unregistered crypto ATMs, while in Germany, coordinated stings seized machines lacking proper permits. In the U.S., the IRS Criminal Investigation unit created a national coordinator role for crypto kiosks in 2024–2025, citing risks from unlicensed MSBs to money laundering. These efforts don’t eliminate the business, but they raise compliance costs and push operators toward bank-grade KYC, AML, and reporting—costs that squeeze margins unless scale is achieved.

Biometric ATMs: Friction Down, Trust Up

ATMs are also becoming biometric. Banks from South Asia to East Asia have rolled out finger-vein and face-auth ATMs to enable cardless withdrawals and stronger authentication. Pakistan’s HBL piloted finger-vein ATMs; State Bank of India has tested facial recognition; Hitachi has long promoted vein-ID modules for ATMs in Japan. For operators, biometrics can lower certain fraud vectors (e.g., card skimming), protecting economics by reducing loss rates and maintenance costs tied to anti-skimming hardware.

Deposit Automation, Recycling, And Merchant Fill

For retailers, the ATM isn’t only about withdrawals; deposit-enabled machines and “cash recycling” let stores offload till cash into the ATM (or similar smart safes), cutting armored-car pickups and keeping cash in circulation locally. OEM and solutions papers argue this shrinks route costs and raises uptime, improving profitability on both the operator and merchant sides.

Headwinds: Less Cash, More Security Spend, And Interchange Pressure

Cash share is down in many advanced economies. The U.S. Federal Reserve’s Diary of Consumer Payment Choice shows cash’s share of consumer payments declining over recent years, with digital options expanding—though the Fed also suggests usage may have found a “floor.” Globally, BIS statistics confirm the sustained rise of cashless transactions even as withdrawals hold steady in many places. Fewer monthly withdrawals per consumer translates into fewer ATM swipes, so operators need higher throughput locations or more non-surcharge revenue to maintain margins.

Security risk is up—and visible. Europe has seen an alarming rise in explosive attacks on cash machines; Germany recorded hundreds of incidents in 2021–2022 with losses in the tens of millions of euros. U.S. banks were warned about renewed jackpotting (malware/black-box cash-out) trends in 2024, echoing Secret Service alerts since 2018. Hardening, surveillance, ink-dye systems, software whitelisting, and rapid patching—none of it is cheap. Every extra lock and logistics step adds cost per transaction.

Finally, interchange economics are political. In the U.K., resets to LINK interchange rates correlated with the slow attrition of free-to-use units; industry groups like ATMIA have urged policymakers to re-examine domestic ATM interchange models so access to cash remains sustainable, not just in city centers but in remote areas where traffic is thin. When the interchange floor drops, marginal sites get pulled first.

How The Money Flows—A Narrative Walkthrough

Imagine a convenience-store ATM in a high-footfall corridor. The operator negotiated a placement deal with the retailer—perhaps a per-transaction commission rather than flat rent. The machine is branded by a regional bank that pays a monthly fee; the bank’s customers see a familiar logo and a surcharge-free screen, but the operator still receives interchange from the bank on those transactions. Non-customers pay a surcharge. The operator’s media software rotates a retailer coupon on the welcome screen and an advertiser message on the topper, monetizing impressions that scale with traffic.

Behind the scenes, an armored carrier runs the cash route twice a week, but recent upgrades added recycling so the machine can accept deposits and reuse notes—cutting the number of cash runs. A vault-cash partner finances the inventory in the cassettes for a fee. Telecom, switching, and settlement come through the processor; anti-skimming and application allowlisting reduce fraud. Net, the site earns on five levers: surcharge where allowed; interchange on all withdrawals; branding/network fees; ads/offers; and FX on international transactions (where DCC is permitted and disclosed). Costs fall if recycling or merchant fill reduce CIT runs; costs rise if attacks spike in the region and security must be upgraded. The margin lives in the difference.

What The Data Says About Market Size And Trends

Because ATM economics cut across hardware, services, software, and logistics, “market size” depends on which slice you measure (machines vs. managed services vs. media). What is clear:

• Installed base: ~2.9 million ATMs globally in 2024, down from the 2010s peak, with continued gradual decline expected as branch closures and mobile payments reduce demand in mature markets. (

• Usage: BIS data shows cashless volumes rising but withdrawals stabilizing, implying fewer trips with higher average amounts in many markets. Country-level series (e.g., Sweden vs. U.K.) illustrate divergence.

• Network scale: Allpoint alone accounts for one in twelve U.S. ATMs, offering a sense of how large surcharge-free aggregations have become.

• Corporate structure: The NCR–Cardtronics tie-up and the NCR Atleos spin-out crystallized “ATM as a Service” as a distinct scale business serving banks, fintechs, and retailers.

Why Retailers And Banks Keep Saying “Yes”

For retailers, an ATM raises basket size and footfall while generating commission—and, increasingly, reduces cash-handling pain if deposits or recycling are enabled. (Less cash in the till means fewer reconciliations and armored pickups.) For banks and fintechs, licensing a surcharge-free network provides nationwide reach without owning boxes or branches; branding amplifies visibility where customers already shop. Case studies show that branding and surcharge-free access lift usage, which in turn improves unit economics for operators.

Risks That Operators (Quietly) Price In

• Traffic risk: If neighborhood demographics change or a competing machine opens closer to the entrance, monthly transactions drop—and with them both surcharge and interchange.

• Policy & fee shocks: A tweak to domestic interchange can wipe out the profit at low-traffic sites. (This is why industry groups lobby hard on rate setting.)

• Security tails: Physical attacks (ram raids, explosives) and jackpotting are low-frequency, high-severity events; the capitalized cost of prevention and insurance is effectively baked into every withdrawal.

• Ad market softness: ATM media is a long-tail channel; campaign budgets rise and fall with retail marketing cycles.

• Regulatory drift in crypto: Kiosk operators face licensing and AML burdens that can change quickly by jurisdiction; enforcement waves can sideline units overnight.

The Next Chapter

A few themes are likely to define where profits come from over the next five years:

1. Fewer boxes, more services per box: As installed bases slim down in mature markets, the remaining machines will do more—deposits, recycling, cardless, biometrics, bill pay, and even micro-branch functions—monetized by service fees, higher throughput, or both.

2. Network economics over branch economics: Aggregators will deepen their role as white-label infrastructure for banks/fintechs. The business shifts from selling transactions to selling reliable access—with branding, analytics, compliance, and security bundled in. The NCR Atleos/Voyix separation was written exactly for this.

3. Retail media at the edge: As retailers scale their in-store ad networks, ATM screen time and receipt surfaces become another node in omnichannel campaigns—particularly for financial-services offers, prepaid, and local promos that convert right at the till. The i-design acquisition narrative—marketing plus measurement—foreshadowed this.

4. Cash access as public policy: OECD and BIS work, along with national regulators, increasingly frame cash access as a consumer-protection issue. Expect more explicit policy support (and funding mechanisms) that keep low-traffic ATMs viable in underserved areas—often via interchange, grants, or shared hubs—bolstering the revenue floor for marginal sites.

Bottom Line: A Machine With Many Meters

That “$3.50 fee” on the screen is only the loudest meter running. Under the hood, ATMs monetize interchange, network access and branding, advertising, FX, and analytics—all while optimizing cash-logistics and site contracts to shave pennies off every transaction. As the installed base thins in rich economies, profitability will rely less on adding boxes and more on doing more with each box—and on selling access, trust, and convenience as a service to banks and retailers.

When you walk by that gray rectangle at the end of the aisle, remember: it’s not just a cash dispenser; it’s a small, humming business—wired into the financial system, the retail media universe, and the economics of cash that refuses to disappear.