Guides
The rules an ATM route business clears before it opens
A compliance checklist for new ATM route owners, written as questions to get answered before opening: model, banking, processor, site, insurance and records.
What to take away
- Owning ATMs and filling them with your own cash does not make you a money transmitter. Accepting customer funds to send to a third party does.
- If you fall inside the definition, you register with FinCEN on Form 107, keep a written AML program and renew every two years.
- State rules vary. Some states license ATM owners, some exempt them, and each sets its own test.
- Card processing needs a sponsor bank or ISO, network terminal registration, and surcharge disclosure on the machine and the screen.
- Insurance must name cash in the machine, cash in transit and cash at your premises.
The federal question comes first
FinCEN's guidance on the money services business definition draws the line for ATM owners. A business that owns ATMs, fills them with its own currency and dispenses that currency is not a money transmitter for that activity alone. No customer funds move to a third party.
The model can change the answer. Take cash from a customer to load a card, pay a bill or send value on, and the analysis may flip.
FinCEN's analysis of the MSB definition for certain ATM owner-operators sets out factors rather than a verdict. Record your reasoning and the date.
If you do fall inside the definition, four duties attach. Register with FinCEN on Form 107 within 180 days of establishing the business. Renew on the two-year cycle.
Keep a written AML program with a compliance officer, training and an independent review. File Currency Transaction Reports above $10,000 in a business day, and Suspicious Activity Reports at the $2,000 threshold for money services businesses.
State licensing and registration
No single state rule exists. Some states treat an ATM owner that is not transmitting funds as outside money transmission. Others want a licence or registration filed before a machine goes in.
- Ask your state regulator, in writing, whether an ATM owner-operator is a money transmitter under that state's statute.
- If the answer is yes, file the licence or registration and pay the fee. Surety bonds are common and the amount varies by state.
- If you are FinCEN-registered, check whether that state also keeps its own MSB register.
- Repeat for every state where you place a machine, not only where the company is formed.
Keep the reply in one file, dated and signed by the person who gave it. Gaming venues, airports and transit properties add their own approvals on top.
The licensing and compliance overview explains how those answers shift when the model changes, which is usually the trigger rather than the calendar.
Banking and settlement
The bank is the practical gate. FinCEN's statement on BSA due diligence for independent ATM owners or operators asks banks to assess these accounts through risk-based due diligence. Expect questions on ownership, machine locations, cash volumes, your AML program and the source of funds.
Banking and settlement readiness
- Bank agreed to hold funding account
- Read FinCEN statement on ATM due diligence
- Bank's ongoing expectations written down
- Business cash separate from personal cash
- Settlement timing confirmed in writing
Ask the bank what it needs before you sign any placement agreement. A vague answer is itself an answer.
Settlement decides your float. You need to know who funds the machines, how withdrawals settle, how surcharge income is credited and how quickly. Many routes load through an armoured carrier vault or the processor's vault service.
What the processor and the card networks require
You cannot connect an ATM to the Plus or Cirrus networks on your own. A sponsor bank, ISO or processor does that and registers the terminal and its location. Contracts usually require:
- Terminal ID and location registration with the network.
- Surcharge disclosure on the machine, on screen before the cardholder commits, and on the receipt, with a no-cost way to cancel.
- PIN security records, including PCI PIN Security and TR-39 (ANSI X9.24) key injection and rotation.
- A funding and settlement schedule, load and vault procedures, and a reconciliation cut-off.
- Minimum volume, monthly fees and a contract term.
Processor and network requirements
- Hardware, software and components in writing
- PIN and account data handling responsibility
- Reporting duties, recipients and timing
- Record retention length and location
- Refurbished hardware changes asked about
Surcharge rules come from the networks and from state law. A handful of states restrict the fee at the terminal. Our review of state surcharge bans and their effect on route economics sets out where that applies.
Insurance the route actually needs
Name the coverage rather than the question. Money and securities coverage should address cash in the machine, cash in transit and cash at your premises. Add commercial general liability.
Commercial auto with hired and non-owned drivers matters because staff drive between sites. Workers compensation applies once you employ anyone, and an equipment floater covers the machines themselves.
The venue's policy covers neither your cash nor your terminal. A placement agreement should say who bears the loss after a break-in, and the policy must match. The coverage gaps that cost ATM routes most are worth reading before you sign either document.
Records and reconciliation
- Load authorisations, seal numbers, counts and reconciliations entered the day they happen.
- Mileage, fuel and maintenance logged as incurred.
- A current list of who can hold keys, open a machine or authorise a load.
- Worker status settled: employee or contractor, with Form 1099-NEC for contractors.
- One register listing each obligation, who imposes it, who owns it here and the next review date.
Records rebuilt after the fact are weak evidence. IRS Publication 583 covers the books a new business should keep and how long to hold them. Machine purchase or lease, depreciation and 1099 reporting are covered in the tax guide for US ATM routes.
