How are Cashless Atms Different from Regular Atms?
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What Is Scrip? FAQs Atm Products Point of Banking Cash Machines Financing/Leasing Investors Distributors Credit Card Processing Prepaid Products Business Resources Affiliate Program Contact Us AtmScrip.com Home	How are Cashless Atms Different than Regular Atms When it Comes to Processing? There is a major difference between the way banking industry regulations process cashless atm machines, and regular atm machines. Cashless machines are processed differently than regular atm machines. A regular cash dispensing atm machine collects "interchange" for each successful transaction it performs. Interchange is a fee that the cardholder's issuing bank pays to the networks to cover processing costs. The networks keep a portion to cover their cost of providing network access into cardholder's banks. Without this service, there would be no way to get approval codes for transactions because banks don't just let anyone connect to their system. Then, the processor keeps a portion of this money for administration costs, and shares a portion of it with their ISO, or distributor that setup the merchant location for service. This interchange does not come out of the surcharge, therefore the machine owner normally keeps 100% of the surcharge amount he collects on his machine because the processing is paid for by the interchange fee. Cashless atm machines cannot collect interchange according to current regulations. This is why each transaction costs the machine owner a "processing fee" that is withheld from the surcharge on each transaction that is run. When the cashless atm runs a transaction, the processor withholds the processing fee at the "switch", where the transaction is routed to the proper network that will handle each specific transaction. The network being used on each transaction depends on which networks the cardholder's issuing bank belongs to. The processing fees on cashless atm terminals are sometime referred to as "switch fees". NOTE: There are companies out there that are violating banking industry scrip atm regulations by setting up cashless atm terminals as though they were regular atms so they can collect interchange fees. This is how they are able to offer lower buy rates than other companies. When they get caught (and they eventually will), their machines will be shut down and the company will most likely be out of business due to fines from the banking industry that can be up several thousand dollars per machine that is setup in violation of industry regulations (merchants can also get fined). It is not recommended that you do business with these companies if you plan on building long term residual income. This is the "trade-off" of not having a cash dispensing atm machine where you could be keeping 100% of the surcharge. Regular atm machines cost much more to own and operate than cashless atms, plus they are much more likely to break down, they require a dedicated phone line, and thieves are always looking to break in to them and steal the cash. Another interesting note is that many insurance companies these days are going way up on their premiums for merchants who have cash dispensing atm machines...some may even drop the merchant's coverage!  Insurance companies don't want to have to pay for repairing the merchant's building if / when someone wraps a chain around the atm and rips the machine out of the location...very expensive, and this type of crime is on the rise across the United States. Regular atm machines always have to be re-stocked with cash, which is a hassle that most merchants don't want to deal with. Hiring an armored car service to do this gets expensive and cuts into the profit that the machine is making, which makes the cashless atm even more appealing. Cashless atm machines can easily be set up in drive thru applications where a regular cash dispensing machine wouldn't work without going to considerable expense to install an outside machine, or a wall unit. Mis-information about Cashless Atms Many atm companies and credit card companies do their best to put out wrong information about cashless atms to scare people off and make them believe scrip machines are illegal in some states. Some even claim that scrip atms cannot do cash advances on credit cards...their claims are simply not true. There have been several scrip companies that have been shut down due to promising investors large returns, but this has nothing to do with scrip machines being illegal. ( for more information, go to the atm business opportunity information page - Click Here ) It is in the best interest of atm companies and credit card companies to say things such as this because more merchants across the country are going with scrip which is costing these companies business....and so, they say whatever they can to discourage cashless atm use. Our favorite rumor is "Congress just passed a bill making it a Federal crime to operate scrip atms". The fact of the matter is scrip machines are perfectly legal as long as industry security standards are used, which is why DES-3 Encryption and card number truncation is so important. Some companies that offer cheap equipment aren't following these security standards which can cause the networks to shut them down because of security concerns, but even then it's a banking industry issue that the processor and the merchant is liable for...not a law enforcement matter. If you still have questions concerning the difference between cashless atms and regular atms, or even credit card processing, give us a call and we will do our best to help you understand!
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