ATM Investments fund

[Derek C. Thompson]

I am interested in an investment where I would provide capital to ATM company for a return. I've spoken to briefly with paramount management group and real asset investment.  They mention returns of 25-36 percent.  I'm a novice and was hoping that someone could provide me with some guidance?  Maybe other companies that might make more sense..  

[Yan Yan]

Hi @Derek C. Thompson, i actually invested in the ATM myself and did a tons of research before i invested in it comfortably.

Three key take-aways from my independent research:

1. ATM business mainly makes money from the transaction fee. The target customers are the unbanked and underbanked population, which is 30 million household in US. Since COVID, the demand for cash actually increased, so this is a recession resistant play. Historical data shows that the transaction fees are very stable and predictable. 

2. Given the demographic of unbanked and underbanked population, the demand for cash will not go away in foreseeable future. It will co-exist with other "new" payment methods such as google pay, apple pay and credit card etc, because the target customers are different. The unbanked and underbanked population cannot take advantage of these new technology because they don't have a bank account to begin with.

3. The real competitor of ATM is bank branch, in terms of withdrawing cash. The customers prefer ATM, as you don't have to go to branch at business hours and wait in line, you can simply do it at 24-hour ATM. The bank, on the other hand, welcomes this as well, because it's cost efficient than having a branch. The data shows ATM consistently grew and branches consistently declined in recent years.

4. The new generation ATM can do a lot more than dispersing cash. That's the upside. But i am very happy with the downside protection it provides. It's a nice hedge to my equity portfolio.

I hope this helps. You can message me if you want to discuss more about my own research.