What Is ATM Processing?

Author Justin Gilmore

For an automated teller machine (ATM) to work, it has to be connected to a network through some form of ATM processing. This is a concept many ATM owners go along with but don’t fully understand—especially when the processing takes a fee for each transaction. What is ATM processing, exactly, and how does it work? Let’s demystify the process a bit.

How ATM Transaction Processing Works

When someone uses an ATM machine to withdrawal cash, the machine doesn’t just “give” them the money. Those funds must ultimately be reimbursed by the cardholder’s financial institution, and the transaction must be approved before the ATM will dispense the money. To complete any ATM transaction, two things need to happen:

  1. The transaction must be authorized by the user’s bank (i.e., the bank needs to confirm the money is in the account); and
  2. The actual funds need to be transferred from the user’s bank.

This is where ATM processing comes in. Think of the ATM processor as the central hub or intermediary that connects your ATM machine to the network. The ATM processor facilitates both the authorizing of transactions and transfer of funds over this network. The processor also records the transactions and provides them in a report so there is always a valid record every time money changes hands.

If you run a business that is equipped to accept credit cards, you’re already familiar with this type of processing. Credit card processing works much the same way as ATM processing. Your credit card reader is connected to an ATM network that authorizes transactions and ultimately makes sure you get paid.

Does ATM Processing Cost Money?

In many cases, yes. Just as a credit card processor will charge a small per-transaction fee each time you swipe a customer’s VISA, MasterCard, or American Express credit card, your ATM processor will charge a fee for each transaction conducted at your machine. This surcharge is typically deducted from the service fee charged to the customer for using the machine, and it may be a combination of a flat fee plus a small percentage of the transaction itself. The fees may vary according to the processing company, and some are cheaper than others. In some cases, as with National ATM, the ATM processing fees may be waived.

ATM Services

As a full-service ATM company serving the United States, AtmMachines.com, LLC offers business owners a range of new ATM products, including Hyosung, Genmega, and Triton ATMs, as well as ATM business programs to meet your specific business needs and budget. We want to help our customers keep as much of their revenue as possible, which is why we offer ATM transaction processing services free of charge and with no hidden fees.

To learn more about our ATM processing service, along with ATM sales, free ATM placement, and additional ATM services like deposit processing, vault cash stocking, receipt paper refills and more, give us a call at 1-866-295-2329. We are happy to answer any questions you have.