Banking on ATMs to drive foot traffic

The bank had started locking its doors after dark, but one Toronto dad needed some cash to give to the kids. Looking across at Leslieville Pumps, a unique combination of general store and barbeque joint, he spotted a sign indicating there was an ATM inside.

Sure, the transaction fee was a nuisance, and he’d probably also get dinged a couple of bucks by his bank, but sometimes there’s a price to be paid for convenience. On his way out of the store, which is based in Toronto’s Leslieville neighbourhood, he saw a sign promoting that night’s multi-million-dollar lotto jackpot, and impulsively bought a ticket. 

A version of this story plays out just about every day in c-stores from coast to coast, and it’s a big reason why, despite the long-rumoured death of cash, so many operators—both national chains and mom and pop stores alike—continue to include an ATM among their in-store offerings.

“Cash is the simplest and fastest way to pay for something. Period,” says Bill Eaton, president of RapidCash ATM, an Edmonton company that has ATMs deployed across the country and describes its employees as “ATM geeks.” 

According to the 2022 C-store IQ National Shopper Study, 26% of c-store shoppers used an in-store ATM in the previous month, more than any of the other specific services offered by stores—a group that includes car washes, postal services, and self-check-out. (The 2023 C-store IQ study will be revealed at The Convenience U CARWACS Show March 7.)

Debit and credit are increasingly common means of payment, however cash still plays a key role when it comes to c-stores. While down from pre-pandemic levels, the National Shopper Study found that nearly one-quarter of C-store shoppers (22%) used cash to pay for their most recent purchase.

And in a 2021 study aimed at disproving what it called the “sensationalism and scaremongering” about a supposed decline in cash purchases, U.K.-based ATM company PayPoint found that more than two-thirds of purchases made at convenience stores within its network were made with cash, while one in five Britons used an ATM two or three times a week.

And ATMs’ value to store operators can be significant. David Tente, executive director, USA, Canada & Americas for the ATM Industry Association in Sioux Falls, South Dakota, points to a European study conducted by HIM Research & Consulting which found that while the typical c-store shopper spent an average of £5.64 per visit, an ATM user spent 65% more (an average of £8.99). In addition, 10% of respondents indicated that they would shop elsewhere if an ATM was removed from their local c-store.

In a more recent study, the California retailer Wood Oil Company said that it saw about $100,000 per month in ATM withdrawals across its four stores, with approximately 25% of that spent in the stores—equating to as much as $25,000 a month or $300,000 a year in sales attributable to the presence of an in-store ATM.

“It is hard to imagine a convenience store without an ATM,” says Tente. “Consumers depend on them as a safe way to get cash late at night; on the weekend when the bank is closed; or the quickest way to get those last-minute essentials after you leave home without your cash or [credit] cards.”

Eaton, meanwhile, says he’s been hearing that cash is dead almost as long as he’s been in the ATM business. “You know, people thought that with the advent of credit cards, no one would need cash anymore,” he says. “Yet here we are, and cash is still a viable and strong payment method. It’s a secure, inclusive, and discreet way for people to pay. People want choice, and cash is a choice just like a debit or credit card is, and it needs to remain viable for a healthy payment ecosystem.”

Chains of varying sizes have agreements in place with financial institutions or ATM companies: 7-Eleven has featured Scotiabank ATMs in its stores since 2012, and Parkland recently announced that it is introducing CIBC ATMs in all of its locations as part of the Journie loyalty partnership first announced in 2019.

Last year RapidCash signed a deal with Kelowna, B.C.-based gas and convenience retailer Canco Petroleum to provide its services to the company’s more than 100 stores across the country. The deal includes the deployment of an all-in-one kiosk offering traditional ATM services complemented by AI-based on-screen advertising, micro-loans and cryptocurrency transactions.

“In a time when shopping local is paramount; Canco Petroleum and One Stop Convenience are fully committed to providing products and services that allow for a ‘one stop’ shopping experience,” says director of marketing, Rob Laing. “This means not only meeting our customer’s current expectations but more importantly, meeting the expectations of tomorrow. Over the past year we have successfully tested bitcoin enabled ATMs in many of our locations. Based on overwhelmingly positive customer feedback and daily usage results, we have found an immediate need for bitcoin services nationally. We currently offer ATM services in all of our sites, moving forward we are looking to offer bitcoin enabled units across our network.

Eaton said that more and more merchants are looking at adding ATMs as they increasingly bristle at the processing fees charged by credit and debit companies. “[Operators] are looking at ways to reduce their payment costs, and they’re something on their P&L that they can adjust quite quickly,” he says.

“So, what they’re doing is they’re getting out of their debit/credit terminals, buying an ATM and having a zero or low surcharge. Now they go to not having a cost to process payments, and that instantly impacts the bottom line.”