Boost Your Income: Rent Space for ATM Installation

Posted On July 30, 2024

As India embraces the digital revolution, the demand for Automated Teller Machines (ATMs) has grown exponentially. With people increasingly needing banking services beyond working hours, installing ATMs has become crucial, especially in remote areas.

Property owners can leverage this opportunity to generate rental income by renting out commercial space for ATM installation. Installing an ATM provides a steady stream of revenue and contributes to financial inclusion in the community.

This blog will take you through the process of renting out commercial space for ATM installation in India, covering everything from leasing models, costs, and benefits to application procedures.

Understanding ATM Installation Process:

Installing an ATM on your commercial property in India involves the following steps:

• Apply for an application with a bank or Non-Banking Financial Company (NBFC), providing detailed information about your property, including its area, location, and nearby landmarks.
• The institution will review your proposal and assess factors such as demand and footfall in the area before processing the application.
• Once your proposal is approved, you will enter into a lease agreement with the institution, which outlines the terms and conditions of the arrangement.

Factors to Consider Before Installing ATM

Leasing your property for ATM installation can be a lucrative opportunity, especially if you have a prime location with high foot traffic. However, it’s essential to consider some crucial factors before making this decision.

• Firstly, you need to ensure that your property is suitable for an ATM installation and meets all the requirements. You must have adequate space and access to electricity, internet connectivity, and other essential utilities.
• Secondly, you need to research the market and understand the demand for ATMs in your area. Analyzing the competition and the number of existing ATMs nearby can give you a better idea of the potential earnings.
• Moreover, it’s crucial to evaluate the rental rates based on factors such as location, demand, and competition. While rental rates can range from Rs 50 to Rs 200 per square foot per month, they may vary significantly based on specific market conditions and transaction volumes.

It’s also important to consider the maintenance and repair costs associated with the ATM. You may be required to bear some of these expenses, so it’s essential to factor them into your calculations.

Leasing Models for ATM Installation:

White-Label ATMs – ATMs that are not owned by traditional banks but by non-banking entities (NBFCs) are known as White-Label ATMs.

They are primarily set up in areas with limited banking infrastructure, with a focus on semi-urban and rural regions.

These ATMs generate revenue through user fees charged for transactions. NBFCs partner with sponsor banks and network providers to ensure smooth operation and efficiency.

Brown-Label ATMS: ATMs with brown labels are typically owned by banks but operated by third-party service providers.

These providers are responsible for maintenance, cash replenishment, and network connectivity, while the bank retains ownership.

Based on predefined agreements, revenue is usually shared between the bank and the third-party operator.

Franchise ATMs: Franchise ATMs are a partnership between the ATM owner (franchisor) and the property owner (franchisee).

The franchisor is responsible for providing the ATM hardware, operational guidelines, and branding, while the franchisee is responsible for providing the location and managing daily operations.

Depending on the agreement, the franchisee can earn revenue through transaction fees or a fixed rental income.

Banked Owned ATMs: ATMs that are owned and operated by traditional banking institutions are known as Bank-Owned ATMs.

These ATMs are fully managed by the banks, from maintenance and cash management to network connectivity.

The primary source of revenue for Bank-Owned ATMs is user fees. These ATMs also offer additional benefits to banking institutions such as increased customer retention and satisfaction.

Cost Considerations:

• ATM leasing involves financial considerations such as security deposits and maintenance costs.
• Property owners typically pay a security deposit ranging from Rs 2 lakh to Rs 3 lakh, which is refundable upon lease termination.
• In an ATM franchise system, property owners bear site maintenance costs of Rs 25,000 to Rs 30,000 but are exempt from monthly rentals.
• It is important to understand these financial aspects to make informed leasing decisions.

Benefits of Installing ATM

Additional Income Source: The installation of ATMs provides property owners with an additional source of income, either through rental payments or transaction fees. This can contribute significantly to enhanced cash flow and overall profitability.

Increased Foot Traffic: The presence of ATMs can attract customers to commercial spaces, leading to increased foot traffic. This, in turn, can result in more patronage for surrounding businesses, potentially boosting revenue for the entire area.

Enhanced Property Value: Properties with ATMs installed may experience an increase in overall value due to added convenience and amenities for tenants and customers. This can make the property more attractive to potential buyers or tenants, ultimately leading to higher rents or property values.

Improved Tenant Satisfaction: For properties with existing tenants, the presence of ATMs can enhance tenant satisfaction by providing convenient access to banking services. This can result in higher retention rates and better tenant relations, ultimately leading to higher profitability for the property owner.

Community Convenience: ATMs contribute to the convenience of local communities, offering residents and visitors easy access to cash withdrawal and banking services. This can help to create a more vibrant and thriving community, ultimately benefiting everyone involved.

To Sum Up

Installing ATMs on commercial properties in India can be a profitable endeavour for property owners. By catering to the growing demand for banking services, they can earn rental income while also contributing to financial inclusion.

Nonetheless, it’s crucial to consider various factors such as location and leasing models to ensure a successful venture.

With proper planning and execution, property owners can reap the financial rewards of ATM installation.

At Save Max, we prioritize accuracy and reliability in every piece of information we share, making us a trusted source for all your real estate needs. As a leading brokerage company in India, we offer a diverse portfolio of projects and properties across major cities, including Delhi, Gurgaon, Noida, Bangalore, Pune, Kolkata, and Chandigarh.