Guides
ATM host commission: set the site floor before you offer
How to price ATM route services for a host: a fill-in floor worksheet per site, a concession ladder with rate last, and the federal ATM fee notice rule.
What to take away
- Fair here means an offer you can still afford in year three, not an offer that feels generous in the meeting.
- Work out your floor before the conversation. A floor decided in the room is not a floor.
- Concede on things that cost you little and are worth a lot to the host: reporting, response time, notice periods. Concede on rate last.
- The venue is comparing you to their memory of the last operator, not to a market rate. Find out what that memory is.
- Write down what you agreed and why, on the day. A year later you will not remember which concession bought what.
Most operators price by asking what others pay and offering slightly more. That produces a route of deals nobody can explain and some that cannot be honored. This page sets out how to price ATM route services for a host: how to build a floor, what to trade above it, and how to run the conversation. It gives the method and a worksheet for your own figures, not a market rate.
Step one: find your floor for that site
The floor is not a route average. It is what this site can carry.
Find the site floor
- Take expected withdrawal count honestly
- Subtract processing and connectivity costs
- Subtract consumables and averaged repairs
- Subtract visit share and cash parking cost
- Set host share ceiling below remainder
Take the expected withdrawal count, honestly. Subtract what each withdrawal costs you before the host gets anything: processing, connectivity spread over the volume, consumables, repairs averaged, the share of the visit that belongs to this stop, and the cost of the cash parked there. What is left is what a withdrawal can carry.
Then decide how much of that you are willing to give away, and that number is your ceiling for the host share. Below it you are working for the venue.
The floor worksheet, one per site
Fill in each line with your own figures for the site, per month:
- Wexpected withdrawals, from the site's history or your most cautious estimate.
- Rwhat you receive per withdrawal, from the surcharge you set plus anything your processor passes back to you.
- Cwhat each withdrawal costs you, worked as processing per withdrawal + connectivity ÷ W + consumables per withdrawal + average repairs ÷ W + this stop's share of the visit cost ÷ W + the cost of the cash parked there ÷ W.
- R − Cwhat one withdrawal can carry.
- Mthe minimum you must keep per withdrawal, decided before the meeting.
- R − C − Mthe most the host share can be per withdrawal. Multiply by W for the monthly ceiling.
If line 6 is zero or below, the site cannot carry a commission at the expected volume, and the honest offer is service without a share, or no machine. Run the sheet a second time with W at the low end of your estimate; that is the first fairness test below, done in advance.
Do that arithmetic on paper before the meeting, per site, and keep it where you can find it. The wider framework of who sets which price is in the pricing and profit guide.
Step two: find out what they are comparing you to
Venue owners rarely know a market rate. They know what the last operator paid them, or what a friend claims to get. That anecdote is the real competition.
Ask directly and early whether there has been a machine here before, what the arrangement was, and what you thought of it. The answer gives you the number in their head and, more usefully, what annoyed them.
A host whose last machine was empty every weekend cares more about reliability than the split. You can win that site without paying for it.
Step three: build a concession ladder
Decide, before the meeting, the order in which you will give things away. Cheapest to you first.
Concession ladder order
- Reportingshow the count you pay on
- Response timecommit only if route supports it
- Notice periodshorter notice costs nothing
- Term lengthshorter initial term for cautious owners
- Structureflat fee to per-withdrawal share
- Ratelast, in a single step
A typical order, cheapest to you first:
- Reportinga monthly statement of withdrawals at the site.
- Response timea stated window for out-of-service calls.
- Notice perioda longer notice before either side ends the agreement.
- Terma shorter first term, so the host is not locked in to an untested machine.
- Placement and signagewhere the machine stands and how it is signposted.
- Ratethe host's share, conceded last and only within line 6 of the worksheet.
An operator who concedes rate first has nothing left to trade and has taught the host that pushing works.
Step four: run the conversation in the right order
Establish what the venue wants before you say what you offer. Ask about their hours, their card fees on small tickets, how often people ask about cash, and what went wrong last time.
Conversation order
- Ask about hours and card fees
- Ask what went wrong last time
- Present service before number
- State commission as a method
- Do not project their earnings
Then present the service before the number: what you install, how often you visit, what happens when it breaks, who they call. Only then the commission, stated as a method with the rate in it, in the order the approach to hosts in the material on winning locations recommends.
Do not project their earnings. Say plainly that their income depends on withdrawals and neither of you knows the count yet. If you do make a claim about earnings, you have to be able to support it, which is the standard set out in the FTC's advertising guidance for small businesses.
What fair actually means here
Two tests. Would you still sign this if the site turns out to be at the low end of what you expect. And would you be comfortable if the host learned exactly what you keep.
Two fairness tests
- Would you sign at low-end volume?
- Would you be comfortable if host knew your keep?
- Failing first leads to your bad renegotiation
- Failing second leads to their renegotiation
- Price to a level you could defend out loud
A deal that fails the first will be renegotiated by you, badly, in eighteen months. A deal that fails the second will be renegotiated by them, when a competitor tells them what you keep. Both are avoidable by pricing to a level you could defend out loud.
When to walk away
When the required share leaves nothing above your floor, and the venue wants a flat monthly fee at a site whose volume you cannot estimate.
When to walk away
Required share leaves nothing above floor?
Walk away
Continue negotiating
When they will not commit to a position or access, and the conversation is all money and no service. That is the host who will move for a marginally better offer next year.
Walking away from a site is cheap. Removing a machine from one is not, and the terms for removal are the ones you negotiate least carefully.
Reviewing what you agreed
Keep a single line per site for structure, rate, unit, term, and notice, and note any concession and its reason.
Review the set yearly against actual counts. Use the routing view in the material on how routes grow to separate pricing from scheduling problems. Use the service view in the operations and workflow material to see whether a weak site is weak or just neglected.
Keep supporting records properly, since these figures feed your books. The IRS guidance on the records a business should keep covers what has to sit behind them.
One federal rule applies to the fee itself. Under Regulation E's ATM disclosure rule, an operator that imposes a fee must give a notice that a fee will be imposed and disclose its amount, on the screen or on paper, before the consumer is committed to paying; the fee may be charged only if the consumer then elects to continue. Any change to the surcharge you set therefore means changing that notice at the same time.
Whether a proposed change to the fee is permitted at all is a question for your processor and the network rules. Those are two of the five obligation sources mapped in the compliance overview. The banking relationship all of it sits inside is described in the FinCEN statement on independent ATM operators.
Common questions
What percentage should the host get?
Nobody can answer that without your costs and that site's volume. Build the floor, decide what you can concede above it, and let the number come out of that rather than out of an article.
Should every host get the same deal?
No, and pretending otherwise creates trouble when hosts talk to each other. Same structure, same method, different rate where the site is genuinely different, and be able to say why.
A competitor is offering more. What now?
Find out what they are offering to do, not only to pay. Operators who buy sites on rate usually cut service to fund it, and the host discovers that in month four. Say so plainly rather than matching a number you cannot carry.
Can I change the rate later?
Only in line with what you signed. Build a review point into the agreement instead of relying on goodwill, because a mid-term request with no contractual basis usually costs more in trust than it gains in margin.
