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Choosing the right Surcharge, or Convenience Fee for your ATM machine
ATM surcharge fees, Debit card fees, and Bank card fees, ATM safety and security
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Choosing the right Convenience Fee for your Location

Retail merchants are finding that the cost of doing business is increasing every year, which is making it more difficult to show a profit and still be competitive in today's marketplace.  This has resulted in more merchants using atms to cut the costs of credit card processing. Some small businesses have even stopped using credit card machines altogether to save money.

The basic concept of having a Point of Banking (POB) terminal, is to pass on processing costs to the consumer anytime a customer is paying with plastic.  Many small and medium sized businesses are starting to realize that they should not have to pay a fee for the customer's convenience of paying for goods and services with their bankcard.  After all, if a merchant is accepting any form payment other than cash...they are providing a convenience that they should be able to charge a fee for to cover the cost of providing that convenience!

Most city, county, state, and Federal government agencies are now charging convenience fees when someone wants to pay with their credit card, bankcard, checkcard, etc so they don't have to pay for the cost of processing.  Even utility companies are now saving processing costs by charging consumers a surcharge for paying their bill with bank cards.  This is a growing trend in the U.S. that is becoming very popular among merchants wanting to save money and increase profits.

The Purpose of Having a Convenience Fee

When a retail business makes the decision to have a cashless atm scrip machine in their location, they should take time to carefully consider how much to charge their customers for each transaction.  The amount they choose is the convenience fee, or surcharge on their terminal.

The first thing a merchant should realize is that the primary purpose of the cashless atm machine is to allow customers to access their bank account while in their location so they can have more money to purchase goods and services.  The atm provides a way for the merchant to accept bankcards without paying the processing fees associated with accepting bank cards.  The machine is not for increasing profits through collecting the surcharge itself.

Point of Banking should not be viewed by the merchant as
a way to make money from the surcharge, but as a way to accept
bankcards without having to pay for processing fees.  This has
always been the primary benefit of having this type of terminal.

Sometimes merchants decide to have a high convenience fee due to wanting to make as much money as possible off of each transaction to pay for the terminal.  Many merchants don't realize that they would be much better off in the long run to have a low surcharge because more customers will use the machine, which will help increase sales.  Making more sales, and not having to pay the processing costs that they would normally be paying if they had a credit card terminal, is what will eventually pay for the equipment and increase profits.

Obviously merchants are in business to make money, but they are in business to make money selling the goods and/or services that their business offers, not by collecting a convenience fee.  Having a high surcharge defeats the purpose of having an atm in the first place, and will even cause many customers to think the merchant is "gouging" them with their excessive surcharge.  High surcharges create a negative public perception of the merchant charging them...which will hurt the merchant's business in most cases.

Many times a sales person who is trying to sell equipment to a merchant will attempt to get them excited about collecting a surcharge on each transaction and tell them that having a scrip machine is just like have a cash dispensing atm which is going to make them alot of money each month.  This is a way of appealing to the merchant's desire to make alot of money in order to make the sale.  Script atms are not dispensing cash and they cost much less than regular atms, so they really should have a lower surcharge for the best possible public perception.

Choosing an Effective Surcharge Amount

This is why we recommend to merchants that they choose a surcharge that does not exceed $1.50, and if they can live with an amount that is lower that would be even better for positive customer relations.  The most effective convenience fee amount we've seen is 99 cents, because very few customers will complain about paying this surcharge amount.  At this amount, many customers will view this as a bargain and will be happy to use the merchant's terminal.

The whole idea behind having an atm is so people will use it to get money to spend in the merchant's location.  Having a lower surcharge than other atms in the area is going to promote use of the machine, which in turn helps the merchant sell more of their products and services.

There are certain types of businesses that a higher surcharge will usually work OK in, such as nightclubs and other types of locations where products and services are sold at a premium.  If a merchant believes their location can support a higher surcharge, they have a right to charge whatever they want since it is their machine and they own the business.  But, if there ends up being little usage, then it's best to lower the surcharge to a more reasonable amount.

If merchants choose to have a reasonably priced convenience fee, they will find that the public will be much more likely to use the machine more which will help merchants increase their sales and help them experience the best overall reception from their customers.

Merchants make more money in the
long run by having a low surcharge.

This makes customers happy which
results in increased business!

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