What are Cashless ATMs?
Cashless ATMs allow consumers to purchase using a debit card in the same manner that they would use cash. ATMs (Automated Teller Machine) are commonly associated with cash dispensing machines, but the term refers to any electronic banking outlet that completes a transaction without the aid of a teller. The cashless ATM is a payment terminal that prints a receipt when the sale is made. It was created as an alternative payment method for merchants who could not get a merchant account and for high-risk methods.
Who Uses Cashless ATMs?
Any business can use a cashless atm, but it is common to see a cashless ATM for dispensaries such as those from Paybotic. The use of cashless ATMs has grown with the trend of decriminalizing and legalizing recreational marijuana usage. These cashless machines found success amongst dispensary merchants because dispensaries are often unable to obtain traditional merchant accounts. In addition, cashless ATMs can make dispensaries a safer and more profitable business by removing the need for a large amount of cash from the business.
There is a stigma attached to cashless ATMs because of their prevalence at marijuana sales, but the payment method is gaining widespread popularity. It has been adopted by many “blacklist” businesses, but traditional businesses have also adopted this method of payment. Some industries that have embraced cashless ATMs are adult product shops, bars, and pawnshops. More “daylight” industries that use cashless ATMs include amusement parks, auto repair shops, and beauty salons.
How it Works
When a consumer makes a purchase at your store, they will insert or swipe their card in the payment terminal. You have to pre-approve the possible amounts a customer can pay; this will typically be in $5 or $10 increments. They will enter their pin, and a receipt will be printed. The payment is complete, and your consumer will receive a copy. The payment will appear in your account within 2-3 days. The process is very simple and similar to a traditional ATM without the difficulties of dealing with cash.
Cashless ATMs have many benefits for both merchants and customers. It is a great option for business owners that struggle with getting a traditional business bank account. This can be caused by poor credit history, criminal history, and PCI (News - Alert) non-compliance. Cashless ATMs accept both pin-based debit and ATM cards. Traditionally, cashless ATMs have lower processing fees than traditional credit card fees. Merchants can also use a smaller, sleeker payment terminal instead of an ATM machine. Chargebacks and fraud are common with any business, but cashless ATMs have more preventative measures than traditional ATM machines.
Cashless ATMs are built with security in mind. Your business will be safer since there will be less cash in your business. Cashless ATMs offer live reporting, deposit funds within two days, and the transactions are processed as the payments are made. The payment terminal can be programmed for multiple amounts and eliminate the need for large cash deposits.
Cashless ATMs have lower rates, both for consumers and merchants. If the merchant opts to pay a monthly fee to use a cashless ATM, the customer will not have to pay a processing fee (common with traditional ATMs if the ATM is not specific to your bank). Fraud is minimized as the transactions are done by a fixed amount determined by the vendor. If the vendor chooses a program that charges consumers a bank ATM fee, it can be lower than traditional ATM fees.
How to Get a Cashless ATM
You have decided a cashless ATM is a perfect machine for your business. The first step is finding a cashless atm vendor and then completing their merchant application form. The vendor will review your form, and if you are approved, they will send you a payment terminal. Other requirements the form will require are your ACH authorization form, proof of the bank account and its provider, and a signed W-9. These are just the basics; certain vendors may ask for more from you. Traditionally providers will get back to you within three business days if all parts of your applications have been submitted.
Certain vendors can approve you in as little as 24 business hours. If all your application is completed and the requirements have been met, the merchant will contact you and let you know you have been approved. This typically happens through email, so be sure to check your inbox. Following your approval, the vendor will ship out your payment terminal. You will have to connect it to a power source and the internet before using it.