ATM Machines??

[ems]

I received the following email from Warwick at Cameron Bird group and wondering if anyone else has thought about these as an alternative investment option?

They sound too good to be true so I'm guessing most probably are.

http://my-cash-machine.com/af/warwick/

Any thoughts on this would be great.

Cheers
Ems

 

[PrimeCommercial]

Anything that sounds too good to be true......


To have a machine placed in a shopping centre costs between $12,000-$30,000per year depending on the centre your in. That's just to rent the space to put the machine, then the costs of the machine itself, and who's going to service/maintain and fill it back up with dosh every week.

Prime position at Pacific Fair is easily over $30k pa rent and that's still sitting next to 3 other machines.

The figures given on that web site sound like a big stretch.
1000 transactions per month probably aint all that much sitting in the middle of a busy pub where there's one or two machines but a machine sitting in a row of 5 others in a dodgey shopping centre or in the middle of no where you'd be struggling to break even.

 

[joanmc]

Hi Ems
this was actually our industry before we retired in december. We were the maintenance techs for SE QLD for a major player in this industry. I would look really closely at the servicing agreement as if the atm isn't working you aren't making money. How quick is the response to a call out? Are they stocking parts? Personally I would want to know who the techs are as this is a very new industry in Australia and there are not a lot of experienced techs around. I would also be asking what brand of machine is it? Most atms are made overseas and that's where the parts come from (hence the stock question)

Who gets to chose where your atm goes? This has a huge impact on your return. do you get paid on every transaction from the first one? or does it kick in after x number of transactions (which is the norm for the industry).

Look , I guess the upshot is that it could be good, please do your DD. For myself after being in the industry I would be really sus. If I can help anymore please let me know. My hubby was known as the atm whisperer. He could diagnose a fault over the phone just listening to the suckers.LOL Funny to watch

 

[BayView]

I think the real money is in being the ones selling the machines and providing the 100% finance - them.

These guys are selling the sizzle; not the steak.

I wonder if they get ongoing % of transactions as well?

And, they can provide all the finance. That's the action I'd be wanting.

My guess is they have a company/ies that have the rights to sell these machines in Aus, and are offering a free seminar to help you become an owner of (minimum) 5 or more.

And finally...there are a "Senator" and an "Honorary" involved.

 

[Pushka]

I think once Banks changed the way they charged for people using 3rd party ATM's (ps the M stands for machines) then that stopped a lot of people using other Banks or non bank machines. Well, it stopped me, now I get cash out when I go to the surpermarkets. Previously, my NAB card allowed me free transactions from any ATM around the world. So I used any ATM. Now I only use NAB ones and cash thru' eftpos.

 

[joanmc]

Pushka that just makes you rare and smart

The truth is that this industry is a growing one because people are prepared to pay for convenience. Why would you buy a bottle of milk at a 7-11 for $5 when you can get it in woolies for $3...because it's convenient! In Australia they have now introduced surcharging on ATMs so not only will you be charged the $2 fee but they can slap another one on top of it. They did this in the US ages ago and whilst demand dropped for a few months it came back and increased. People will pay for convenience. Look at Mcdonalds are their burgers worth what they charge? 2 bucks for a tiny serve of chips, you could buy a kilo of chips and fry them yourself. Even in woolies and coles look how much space is taken up by convenience products, frozen meals etc. and look at what you get for the price they charge.

 

[steveadl]

One question I would pose is where are the locations they're putting them in now? Australia has how many 10's of thousands of ATM's already? Granted new spots come up, but of those that are great the majors would already be putting their own machines in? Will you just be picking the dregs of locations? Just a thought.

 

[LynnH]

Right, Steve. Our local shopping centre has gone from 3 ATMs to 8 in the space of just over 5 months. The 4 of the new ones belong to Banks.

Sounds like a reall money-spinner - for those who are promoting them!

Cheers
LynnH

 

[TarBall]

Since the introduction, earlier this year, of ATM direct charging of fees for use, usage trends for ATM transactions have changed. I believe this is because if the machine is not owned by your service providor, you should now get a splash screen with details of the amount you will be charged if you wish for your request to be done. You must accept these charges to continue processing. Users now have this cost in their face and are likely to be thinking twice and/or realising there are ways to achieve the same outcome without incurring the additional fee.

IMHO, anyone who is using any figures from prior to this change as a part of their DD does not understand the business and the effect the recent changes may have on the proposed source of revenue.

Cheers,
TB
- no more just a lurker. ;-)

 

[Spectre]

The charge that direct charging brought was no more than what the banks were charging. Its just the owner of the ATM collects the fee upfront rather than the bank collecting the fee upfront. Its really quite fascinating as the RBA pushed it through.

The largest Non bank atm owner in Australia (Customers Ltd) has gone from .90c a share to @2.25 a share in a few months. Its revenue has quadrupled where that income has no longer gone to the bank (it is listed as well under CUS.AX and I believe atm fees will be increasing later this year to around $3 a transaction too - which makes being a shareholder even more enticing).

I've been in and out of that particular stock and watched the industry for years. IMO if the ATM supplier cannot fund the ATMs they are trying to sell, they're a fly by night company and you'll be left holding the bag by owning the ATM and its maintenance costs etc when they pull the pin.

Better to buy the stock - more liquidity, better dividends (when they get introduced), and you dont have to keep upgrading the atm.

Theres a second stock as well - ICP which is a smaller version of an ATM supplier and into asia / china. Not as attractive as CUS - IMO.

DYOR re the stocks too.

 

[Pushka]

The charge that direct charging brought was no more than what the banks were charging. Its just the owner of the ATM collects the fee upfront rather than the bank collecting the fee upfront. Its really quite fascinating as the RBA pushed it through..

Thats true, except that in the original scheme, my Bank never charged me that fee whenever I used someone else's ATM. Now it is the Bank or credit Union of the ATM you use belongs to, so I do get charged now.

 

[TarBall]

Thats true, except that in the original scheme, my Bank never charged me that fee whenever I used someone else's ATM. Now it is the Bank or credit Union of the ATM you use belongs to, so I do get charged now.

There was a fee, but your financial institution may have chosen not to pass the fee on to their customers and either cover the costs of providing the service through other means or just record it as a cost of them doing business.

Cheers,
TB

 

[Pushka]

There was a fee, but your financial institution may have chosen not to pass the fee on to their customers

Yep, thats what I said (bold)

Thats true, except that in the original scheme, my Bank never charged me that fee whenever I used someone else's ATM. Now it is the Bank or credit Union of the ATM you use belongs to, so I do get charged now.

It was the Visa Gold eftpos card they promoted heavily last year - I took it up in September last year for this exact reason - only to find six months later everything changed. Previosuly I was using a savings account debit card, not a visa debit card.

The cynic in me says they knew their lovely promotion would not last long, but didnt tell anyone. By signing people up to the Visa card, if you select Credit (even though it comes out of your savings account and not credit account, which isnt linked) then the Banks can charge the merchants a Visa Credit fee of 3%. And the Bank keeps telling me to select credit; they say it gives me more protection. Well, that is a load of codswallop it is because when you select 'savings' they cant charge the merchant a fee. Yet the money for both types of transactions comes from the same account! I always select savings.....

 

[Rob Williams]

I work in for a company that supports banking infrastructure for a couple of the majors inc. their ATM machines.
When I get on the forum I tend not to say anything negative. If I have nothing positive to say, I say nothing.
I've been waiting for this thread to kick off. I knew it would as soon as I saw that the marketing gurus had targeted high net worth individuals and those with an investor mindset by advertising in API.
I'm open to any investment vehicle that puts money in my pocket.
I'm NOT investing in ATM.
I have intimate knowledge, over many years, of the industry.
Did I mention I'm NOT investing in them?
I won't say any more. Think I've said enough already.
Those who do their own due diligence and invest in them should assess the deal carefuly and focus on what's NOT said in the glossy brochure.

Rob
ps I'm not investing in ATM's, but I'd consider investing in a company that promoted the scheme and generated the revenue from the machines, while offloading the actual machine itself to small investors.

 

[Bradsdad]

Minimum GUARANTEED 20% ROI p.a. and often much higher
150% tax benefit* - over 70% in year one alone
100% finance* option (available from multiple major finance institutions)
Low entry costs from AUS $6,600 (a 10% deposit)
Your initial entry deposit (AUS $6,600) paid back if you successfully take advantage of the 100% finance option ......................

Right now there are people just like you who are earning a sizable income by operating their own ATM business without slaving away at a 70 hour a week home business. This is a complete turn-key solution for you with site locations, insurance, maintenance, security and supply already taken care of – ATM owners simply sit back and relax in their lounge...................



If it was so damn easy why are they letting people in on this chance of a lifetime?

 

[Rob Williams]

150% tax benefit* - over 70% in year one alone

Not everyone gets the investment allowance benefits, either. That's available for small business, which not everyone qualifies as. That, alone, makes a big difference to the numbers. Of course, a great investment just IS, it doesn't rely on tax breaks to make it so. But we all know that

 

[Bradsdad]

and at around $13k per machine I highly doubt the machine is yours

 

[joanmc]

Actually 13k is about what they cost. I have a suspicion about what they are actually hoping to achieve and if it's correct then the better investment will be the actual company flogging this idea. as Rob said before. If he is in the industry then he will know what I am talking about, enough said.

 

[quoll]

From what I've seen the number work out so you pretty much pay the thing off when it goes "End Of Life", you would need to be in a very good position to make and real cash out of this.

The other question is OPPORTUNITY cost. What else could you do with your cash?

That's my view.

Cheers
Graeme

 

[yeohkt]

interesting thread, I actually got an email from a investing group on this kind of ATM deal as well.