Back to basics: The cardinal rules of cash

This ATM Feature was originally published in the December 2016/January 2017 issue of C&I Retailing magazine

The online revolution may have brought with it a number of high-tech payment options, but the cash society is here to stay.

In their endless quest to increase sales and boost profits, convenience stores need to make sure they cover the basics… and that means ensuring customers have easy access to the funds they need to make the purchases they want.


Despite living in a world where credit cards, EFTPOS, and payWave are the payment method of choice for some, many store operators are still convinced that cash is king and customers with real money in their pocket will spend more.

It’s the reason why those who have predicted the imminent arrival of a cashless society appear more than a little hasty, and the reason why convenience stores are still installing ATMs as they seek to ensure their tills keep ringing.

Leading ATM provider DC Payments is in no doubt that an in-store ATM will continue to be a foolproof way to lift convenience profits.

“It brings customers in and adds to spend in that store,” said David Vandergriff, national manager – sales and customer relations at DC Payments. “Research shows consumers expect an ATM in a convenience store and will return when they know the service is available.”

While data from Commsec earlier this year showed ATM withdrawals had fallen, Commsec’s Craig James said there was still very much a demand for cash, with some parts of Australian society preferring the tangibility of cash rather than using credit cards or debit cards.

It’s the reason why those who have predicted the imminent arrival of a cashless society appear more than a little hasty…

While Australia was one of the earliest adopters of payWave technologies in the world, and Generation Y and Z are definitely keen on using new online technology, notes and coins will be around for a while yet.

atm-machineStar Payment Systems CEO Todd Zani said the new generation of consumers, with a range of new payment methods, were learning to deal with their own versions of ‘bill shock’.

“We joke that the average consumer back in the 90s got bill shock when they returned from an overseas holiday and then got their mobile phone bill,” he said.

“The bill shock of the current generation is when they realise what they spent on their payWave device after a ‘big night out’… they soon revert back to taking cash so that they know they have enough cash left to catch a cab home.”

Another reason for the continuing strong demand for ATMs in convenience stores is that so many banks are closing their branches and increasing the cash-seeking customers’ dependence on independent ATMs. Also, an ATM will provide a business owner with a direct revenue stream unlike an EFTPOS device, which has a cost associated with every transaction.

The Australian ATM market has seen something of a shake-up in recent weeks and months, with a series of takeovers changing the ownership landscape. The ultimate reason why ATMs continue to be such big business and why C-Stores continue to seek to install them is that they are proven sales drivers, and are seen by many operators as putting them in a win-win position.

Leading ATM providers generally supply an ATM whilst covering all the running expenses, including maintenance, at no cost to the store. The store and the supplier will then share, at varying proportions depending on volume, the revenue generated by the transaction surcharge. The income that can be generated will vary based on the number of transactions processed by the ATM.

As well as adding an extra revenue stream from transaction rebates, there is plenty of evidence to suggest that stores attract more regular customers who appreciate the convenience of an in-store ATM. As with everything, people who are able to reliably find what they want at a certain venue will most probably return at some stage. Once consumers know a store has an ATM, they are likely to revisit leading to repeat sales for the convenience store operator. There is little doubt that many consumers now expect that a convenience store will be able to offer them access to an ATM.

There are a number of companies that supply ATMs to convenience stores, often on what appears to be similar terms. However, proper research is very important. Convenience store operators should read the fine print of any contract to ensure they are aware of all of the legal responsibilities. They should always look around very carefully to find the best deal in the market, preferably from a specialist provider with good experience.

Obviously, new machines will be faster and more reliable and thus perform more transactions so these are always preferable to older ATMs. While the new $5 notes (which came into circulation on September 1) aren’t used in ATMs, it pays to ensure that any machine installed will be able to cope with the higher denomination notes that are yet to be introduced in coming years.


Tyson Lester, general manager, sales and marketing at Next Payments said that with countless hardware/software upgrades required for automated machines, stores should ensure upgrades are included in any contract.

He said stores which aim to buy their own ATMs should also be aware of things like mandatory EMV (chipcard) compliance upgrades, which have to be completed by the end of this year.  Failure to comply with these security standards means the ATM owner will become liable for fraudulent activities.

Despite the need for vigilance and care, there is little doubt that in-store ATMs can provide a huge boost to sales and profit, and are a much-valued asset to many stores.

Whatever their size or location, nearly all stores can benefit from hosting an ATM. There are ATMs available to suit smaller sites that might only do a handful of withdrawals a day, all the way up to sites that can generate hundreds of transactions per day. ATM suppliers will generally conduct a pre-installation review to make a suggestion about the most suitable machine and the most suitable location to maximise visibility and use. This will be largely dependent on the look and feel of the store, and consumer traffic flow as a result of the layout of the store, and on the proximity of other ATMs.


DC Payments offers a full range of ATM solutions including Lobby and Through the Wall Machines, and provides 24/7 support. It said its research showed upwards of 26 per cent of ATM users will make an in-store purchase after a withdrawal.

“We recommend that an ATM is always placed in a secure location and we also recommend that it is installed towards the rear of any premise,” Vandergriff said.

“This leads a consumer further into a store maximising any potential for an increase in sales volumes.”

The company suggests that the use of good signage is also important to attract customers to the ATM.

Star Payment Systems, which actually owns the manufacturer of its ATMs, said there have been numerous case studies showing increased spend as a result of having an ATM in store, with the best example being an increase in annualised turnover of 28 per cent in one location after an ATM was put in.

The company offers both ATMs and EFTPOS facilities and said both have a role to play in satisfying the needs of convenience customers.

“I believe stores should offer both but they should refrain from offering cash out,” Zani said. “EFTPOS is far more costly as a business to have in that there are obviously fees required to be paid to Visa and MasterCard and other providers, whereas by having an ATM in the premises, the business owner actually gets paid for people to make withdrawals and not charged a fee or fees.”

If a customer has already accessed an ATM and is therefore able to pay with cash, this can also mean efficiencies at the point of sale, saving staff time and potentially reducing queues at the counter. Having an ATM in-store can also make it less of an issue for operators to keep large amounts of cash for EFTPOS cash-out.

The majority of convenience stores choose to self-cash their ATMs. This has a number of advantages. By using their own excess cash float to fill ATMs, the ATM is effectively doing the operator’s banking and at the very least is reducing the required number of trips to the bank.

An ATM will provide a business owner with a direct revenue stream unlike an EFTPOS device, which has a cost associated with every transaction.

These days, an ATM is a lot more than just a machine that dispenses cash to customers and allows them to check their account balance, and its versatility is continuing to evolve. Some recycler ATMs also allow customers to deposit cash, and these notes can then be used by the next customer. Stores are also able to promote specials and advertise featured products using the ATM’s on-screen advertising capability. The receipts dispensed by the ATMs can be used to offer special deals to customers and drive sales. Leading suppliers run free, large-scale ATM promotions that are aimed at building customer loyalty and repeat usage of the ATM.

Companies like Star Payments believe that an ATM will eventually become something of a kiosk where customers not only withdraw cash, but use the device to perform a number of other functions including bill top-up, phone credit re-charging and more.

“We distribute our ATMs and technologies through 14 other countries and this trend is already happening,” Zani said. “In fact, Australia is a long way behind in that regard.”

“A convenience store without an ATM is like jockey without a horse,” Vandergriff said. “Not going anywhere!”

So, despite the rise of various cashless payment methods, it seems the new generation of ATMS will continue to service the needs of today’s convenience customers, long into the future.

* Convenience and Impulse Retailing would like to thank DC Payments, Star Payment Systems, and Next Payments for supplying information for this article.


  • Credit cards, EFTPOS, and payWave are the payment method choice of some, but many store operators are still convinced that customers with cash in their pockets will spend more.
  • By using their own excess cash float to fill ATMs, the ATM is effectively doing the operator’s banking
  • As well as adding an extra revenue stream from transaction rebates, evidence suggests in-store ATMs attract more repeat customers
  • ATMs could eventually become kiosks where customers not only withdraw cash, but use the device to perform other functions including bill top up, phone re-charge and more.

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