Where do ATM charges go?

article_45Ever wondered where the money goes when you pay the annoying $2.50 charge to use a local ATM machine?

It’s tempting to think that you’re paying a bank or a financial service provider. That’s partly true. But you’re also lining a normal investor’s pockets as well.

Most private ATMs are actually owned by individual investors – normal people – who put up the cash to install the machine and then receive a cut of the fee charged for every withdrawal.

Typically, the ATM service provider – the company that insures and maintains the machines – will receive around half of the fee ($1.20).

The venue receives $1 per withdrawal, while the investor receives the remaining $0.30.

The machines can cost between $11,000 and $28,500, according to Own Your Own ATM, and they are becoming quite a popular investment.

An average $11,000 machine might be used 26 times a day, the company said, which would generate at least $235 per month for the investor.

If this was fed into the market-leading savings account, the machines would take around four years to pay for themselves, before all subsequent revenue became profit.

The problem is, of course: this burgeoning industry is encouraging people to profit from a basic service – allowing people access to their cash.

And the $2.50 fee is a steep cost for convenience. Consumers who want to be more efficient with their cash should avoid private ATM machines and stick wherever possible to their own bank’s ATM network, which will rarely charge a fee.

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