Guides
Which US states ban ATM surcharges and what that costs routes?
ATM route profitability depends on state surcharge law: some states ban or cap ATM fees, changing revenue per machine and pricing strategy US-wide.
What to take away
- Iowa and Connecticut ban ATM surcharges outright. New Mexico caps the fee. California and New York allow it and regulate how it is posted.
- A ban removes the largest revenue line on a machine. What remains is interchange, host fees and branding income.
- A cap keeps the fee but compresses it, so a low-volume site may not cover cash loading and servicing.
- Regulation E disclosure duties apply in every state, including states with no surcharge rule of their own.
- Confirm the statute before signing a placement contract. Caps and notice rules change between sessions.
The states that ban, cap or disclose ATM surcharges
Start with the short list. Iowa and Connecticut prohibit the surcharge on a foreign cardholder. New Mexico caps the amount. California and New York permit the fee and control how it is posted. No other state bans it outright in the codes reviewed here.
Surcharge rules are state law, written into separate code sections with different scopes, and licensing and compliance for an ATM route business covers the registration duties that sit alongside them.
Ban, cap or disclose
| State | Rule | Statute | Effect on a route |
|---|---|---|---|
| Iowa | Ban | Iowa Code 527.5 | No foreign-card surcharge |
| Connecticut | Ban | Conn. Gen. Stat. 36a-158 | Banned, plus notice duties |
| New Mexico | Cap | N.M. Stat. Ann. 58-16-7 | Fixed dollar ceiling |
| California | Disclosure | Cal. Fin. Code 13020, 13025 | Machine and receipt notice |
| New York | Disclosure | N.Y. Gen. Bus. Law 75-c | Notice at the machine |
| Texas | No ban | Finance Code, Ch. 59 | Fee allowed, licensing applies |
State ATM Surcharge Rules
Ban
- Iowa
- Ban
- Connecticut
- Ban
- New Mexico
- —
- California
- —
- New York
- —
- Texas
- —
- Florida
- —
Cap
- Iowa
- —
- Connecticut
- —
- New Mexico
- Cap
- California
- —
- New York
- —
- Texas
- —
- Florida
- —
Disclosure
- Iowa
- —
- Connecticut
- —
- New Mexico
- —
- California
- Disclosure
- New York
- Disclosure
- Texas
- —
- Florida
- —
No ban
- Iowa
- —
- Connecticut
- —
- New Mexico
- —
- California
- —
- New York
- —
- Texas
- No ban
- Florida
- No ban
New Mexico is the middle case, and the number is the reason. The statute caps the fee at a fixed dollar amount per transaction instead of leaving it to the market. Operator guides commonly quote a cap near one dollar. Treat any such figure as needing confirmation in N.M. Stat. Ann. 58-16-7.
Connecticut pairs its ban with disclosure language, so a compliant machine there still needs posting.
What a ban costs each machine per month
Revenue per machine decides whether a route scales. It is total revenue from one machine over a month.
Remove the surcharge and the machine keeps interchange, plus any host fee or branding income. Interchange on a withdrawal is small next to a two or three dollar fee, so the break-even point for an ATM route moves the moment the fee line disappears.
Revenue per Machine: Open vs Ban State
- Open state$950–$1,000
- Ban state$50–$80
Surcharging is a recent layer in the machine's economics. The ATM entry traces how shared networks and independent deployers built the fee model these state rules now constrain.
Example: one machine in Texas, then in Iowa
One machine in Texas, then Iowa
- In Texas, a three dollar surcharge on foreign withdrawals produces a fee line near 900 dollars a month. 300
- Interchange adds a small amount, so total revenue lands near to 1,000 dollars before costs. 950
- In Iowa the fee line is zero. Interchange leaves roughly to 80 dollars, plus any host subsidy. 50
Cash loading, servicing, insurance and the location's cut do not change at the state line. Doubling volume doubles a small interchange number but does not rebuild a surcharge, so restricted-state routes cluster in high-footfall sites where cash logistics are the main cost lever.
Disclosure duties that survive where surcharges are legal
Federal law does not ban ATM surcharges. It regulates how they are disclosed, and Regulation E sets the baseline for every machine in the country.
The rule requires a fee notice on or at the machine, visible before the consumer commits, and the fee on the receipt. The content sits in 12 CFR 1005.7.
The operative text is 12 CFR Part 205. Read it directly, because the placement and timing of a notice are what examiners check.
- Fee posted at the machine, visible before the transaction
- Fee printed on the receipt when one is issued
- State notice added in California and New York
- Signage and complaint log reviewed when a machine changes state
Repricing a route when the surcharge line is gone
If you cannot charge the cardholder, charge the location. A monthly service fee or a per-transaction merchant fee can replace part of the lost surcharge.
Placement turns into a traffic question. A marginal location can survive on surcharges in an open state. In a ban state it cannot.
When the fee is fixed by law, transactions and uptime are the only levers. An empty, offline or paperless machine earns nothing. Read the method behind a fair margin before you set host pricing, because the cost base of a restricted-state machine matches an open-state one.
Where to verify a state rule before you sign
Statutes are amended in legislative sessions, and a figure quoted in an old operator guide can be stale. Check two sources: the state code and the banking regulator that supervises money transmission.
The statute controls the fee. The regulator controls registration, which most states require before a machine goes live.
