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The Power of ATM Investing: Why Should You Invest in ATMs?

Automated teller machines, best known as ATMs, are tucked in the corners of convenience stores and other locations around the United States and the world. While they may look unassuming, ATMs collectively represent a huge investment opportunity that many investors have failed to take advantage of.

Why are ATMs such an attractive investment opportunity? And what exactly would ATM investing look like? Here’s a rundown of ATM investing opportunities, including details on how to access ATM funds for your investment portfolio.

Illustration of 2 ATMs with dollar signs laid over

Who Uses ATMs?

ATMs serve a large and growing market. There are about 40 ATMs for every 100,000 people around the world, and each ATM is used about 300 times per month. Who exactly is using these machines? ATM users are typically:

  • Individuals with poor credit or no credit who do not have credit cards.

  • Individuals who are using prepaid cards on a regular basis.

  • Individuals using electronic benefits transfer (EBT) for accessing SNAP benefits (among other reasons).

  • Individuals who need to transfer funds or conduct other transactions (as opposed to online banking).

The ATM services market in North America reached a value of $6.8 billion in 2020, and it’s expected to grow at a CAGR of 6.5% rate through 2028 — mostly driven by users who fit the profiles listed above.

How Do ATMs Make Money?

As anyone who uses an ATM discovers, there are fees attached to almost any function performed on a machine. These fees run between $2 and $3 on average, and core transaction volume of machines across a fund or portfolio drives cash flow for investors.

Because this cash flow is powered by underbanked individuals who use ATMs as their primary option for services, transaction volume on any given ATM is considered stable even at times of economic downturn or other unexpected events (like shutdowns related to COVID-19).

Who Owns ATMs?

ATMs are owned primarily by two different types of groups.

  1. Small Businesses: These mom-and-pop style operators are aware of the opportunity presented by placing ATMs in new locations. However, performance is less predictable due to a lack of historical transaction data and less optimized placement. Also, these smaller operators struggle to scale their businesses, even though their ATMs often drive high profit margins.

  2. Institutional Operators: that have established multi-property location contractors with major retailers. The size of their funds and portfolios helps drive massive amounts of historical transaction data that can be used to reduce risk. These large operators are often controlled by private equity firms, hedge funds and large institutions.

How to Invest in ATMs

The fastest path to investing in vetted ATM opportunities is through a fund. Individual investors can participate in a fund that is made up of thousands of ATM machines, that are spread out geographically, which offers instant diversification based on the quantity and different locations.

When you participate in an ATM fund, you invest capital only. There are no operational duties or obligations, which makes it a fully passive investment. Most ATM funds plan to hold their investment for a specific period of time (like 7 years, for example), and they pay out monthly or quarterly distributions.

Invest in an ATM Fund Today

Madison Investing offers a variety of vetted, alternative asset investment opportunities which provide cash flow, including ATM funds. If you're and accredited investor looking to diversify your portfolio request an invitation to join our investment club.

The Benefits of ATM Investing

Most investors explore ATMs because they can potentially outpace returns available through securities or other investments. So, why are ATM funds a good investment?

  • A large and growing base of users

  • Relative stability of monthly transaction volume

  • The opportunity for consistent cash flow (though nothing is guaranteed)

  • The potential for returns that outpace other investment vehicles

  • Depreciation-related tax benefits due to the shorter (compared to real estate) 10-year-or-less lifespan of ATMs

  • Recession resiliency when compared to other investment opportunities (an ATM is a non-correlated asset, which means that its value does not change along with movement in traditional markets)

  • Diversification of investors’ portfolios

Traditionally, ATMs have generated reliable cash flow and attractive returns, which is why they are growing in popularity as an investment option.

Equally as important as the information above, real estate investing is capable of producing attractive returns, but it does require a high degree of risk, including illiquidity of the investment and loss of principal. Always consult your financial advisor to determine whether investing in private funds is the right investment option for you.

The Drawbacks to ATM Investing

There’s risk with any investment, and ATMs are no different. Potential drawbacks to this type of investment might include:

  • Zero equity: As noted above, ATMs last for 10 years or less. That’s great for depreciation, but there’s no equity to be gained like there would be in a real estate fund.

  • Inexperienced operations: For ATM investments to be successful, you need to find the right operators with track records of success in this space.

  • Nothing guaranteed: ATMs are an illiquid investment, which means they can be difficult to sell. As noted above, recognize both the risk and the opportunity before jumping into ATM investing.

Achieve financial freedom by starting your passive investing journey today.

Madison Investing has a proven track record of helping investors turn investments across multiple different asset classes into consistent cash flow with strong returns. If you're an accredited investor looking to diversify your portfolio, request an invitation to join our investment club today.


What is ATM investing and why is it considered a lucrative opportunity?

ATM investing refers to the practice of investing in automated teller machines (ATMs) which provide services to a large and growing market. ATMs are an attractive investment because they generate consistent cash flow through transaction fees, and this cash flow remains stable even during economic downturns. ATMs are largely used by individuals without credit cards, those using prepaid cards, and others who rely on physical transactions.

Are ATMs a good investment?

Yes, ATMs can be a good investment for a variety of reasons. They serve a large and growing user base, provide consistent cash flow, offer potential for returns that can outpace other investment vehicles, and are considered recession-resilient. Additionally, their shorter lifespan compared to real estate means they have depreciation-related tax benefits. However, like any investment, they come with their own set of risks and it's always advisable to consult with a financial advisor before making an investment.

How do ATMs make money?

ATMs generate income through transaction fees which are usually between $2 and $3 per transaction. The volume of transactions across a portfolio of ATMs drives cash flow for investors. The cash flow is considered stable as it's powered by underbanked individuals who use ATMs as their primary financial service.

Who primarily owns ATMs?

ATMs are owned primarily by small businesses and institutional operators. Small businesses see opportunities in new locations but may lack historical transaction data and struggle to scale. Institutional operators, often controlled by private equity firms, hedge funds, and large institutions, have established contracts with major retailers and can leverage historical transaction data to reduce risk.

How can one invest in ATM machines?

The fastest path to investing in ATMs is through a fund. By participating in an ATM fund, you invest capital in a portfolio made up of thousands of geographically dispersed ATMs. This offers instant diversification based on the quantity and different locations of the ATMs. The investment is fully passive with no operational duties or obligations.

What are the benefits of investing in ATMs?

Investing in ATMs offers several benefits including a large and growing user base, relative stability of transaction volume, potential for consistent cash flow, and possible returns that outpace other investments. Additionally, ATMs offer depreciation-related tax benefits and diversification of an investor's portfolio.

What are the risks associated with ATM investing?

As with any investment, ATM investments come with certain risks including zero equity due to the short lifespan of ATMs, challenges with inexperienced operators, and liquidity risk as they can be difficult to sell. It is essential to acknowledge both the risks and opportunities before investing in ATMs.

Can I invest in ATMs even if I have no experience in operating them?

Yes, you can invest in ATM machines without having any operational experience. Most ATM funds are passive investments where you contribute capital but are not expected to handle operational duties or obligations.

Is investing in ATMs a stable and consistent source of income?

Generally, ATMs have been known to provide a stable and consistent source of income due to the regular transaction volume. However, as with any investment, there's always an element of risk, and returns are never guaranteed.

How do I start if I want to invest in ATM machines?

Starting to invest in ATM machines involves researching ATM funds and choosing one that fits your financial goals. Madison Investing, for example, offers vetted ATM funds that allow you to diversify your portfolio. As always, consulting with a finance or legal professional before making such an investment is strongly recommended.



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