How to Start an ATM Business in Pakistan | A Detailed Guide

For business owners hoping to generate passive income from transaction fees, the Pakistani ATM industry offers a fantastic opportunity. With increasing demand for cash withdrawals in both urban and rural areas, independent ATM operators can generate steady revenue. 

However, establishing an ATM firm necessitates a deep comprehension of operational management, financial investment, and regulatory compliance.

In this guide, we will walk you through the step-by-step process of how to start an ATM Business in Pakistan, ensuring that you meet all regulatory requirements set by the State Bank of Pakistan (SBP) and other governing bodies. 

In order to make sure your company is prepared for success from the start, we will also concentrate on the legal and compliance services offered by Waystax.

How to Start an ATM Business in Pakistan: 14 Steps

Step 1: Decide on a Name for Your ATM Company

Selecting a name that accurately represents your brand and is simple for clients to remember is the first step in launching any kind of business. 

When selecting a name for your ATM business, consider the following:

• Relevance: The name should reflect the nature of your business (e.g., “CashFlow ATMs” or “QuickCash Solutions”).
• Uniqueness: Verify that no other Pakistani company is already using the name. The Securities and Exchange Commission of Pakistan (SECP) is a good place to check this.
• Domain Availability: If you plan to have an online presence, check if the domain name is available for your website.
• Legal Compliance: The name should comply with SECP naming guidelines and not include any prohibited words.

After deciding on a name, you can register it with the SECP.

Step 2: Develop Your ATM Business Plan

The success of your ATM business depends on having a well-organised business plan. It will act as a guide and, if necessary, assist you in obtaining funds. 

It should include:

1. Executive Summary: An outline of your company that includes your goals, vision, and mission.
2. Market Analysis: Examine competitive analysis, client demographics, and the demand for ATMs in your target areas.
3. Operational Plan: Information on how you want to manage your firm, such as where to put ATMs, how to handle cash, and how to keep them maintained.
4. Financial Plan: Estimates of initial expenditures, earnings, and profitability. Provide information on the break-even analysis and funding requirements.
5. Marketing Strategy: How you intend to draw in and keep clients, including joint ventures with nearby companies.
6. Risk Analysis: Determine possible risks (such as security or regulatory changes) and ways to mitigate them by conducting a risk analysis.

Step 3: Choose the Best Location

The success of your ATM business largely depends on the location of your machines. High-traffic areas with limited access to banks are ideal. 

Consider the following:

• Foot Traffic: Locations like shopping malls, petrol stations, universities, and busy marketplaces are ideal.
• Security: Ensure the location is safe and has adequate security measures in place.
• Accessibility: The ATM should be easily accessible to customers 24/7.
• Partnerships: Partner with local businesses to install ATMs on their premises. This can reduce rental costs and increase usage

Step 4: Select the Appropriate Legal Framework for Your ATM Company

Choosing the right legal structure is crucial for tax purposes, liability, and compliance. 

In Pakistan, the most common business structures are:

1. Sole Proprietorship: It is simple to establish and run, but the individual bears personal responsibility for obligations.
2. Partnerships: Ideal for companies with several proprietors. Profits, losses, and liabilities are all shared by partners.
3. Limited Liability Company (LLC): Allows for various management structures while providing owners with liability protection.
4. C Corporation: Although it offers the most protection, it is a distinct legal entity that is liable to double taxation.
5. S Corporation: Similar to a C Corporation but with pass-through taxation.

An LLC is frequently the best option for an ATM business because it offers tax flexibility and liability protection.

Step 5: Register Your ATM Company with the FBR and SECP

You must register your company with the Federal Board of Revenue (FBR) and the Securities and Exchange Commission of Pakistan (SECP) in order to conduct lawful business in Pakistan. 

Here’s how:

SECP Registration:

• Submit the required documents, including your business plan, NICOP, and proof of address.
• Pay the fees of registration.
• Get your Incorporation Certificate.

FBR Registration:

Apply for Sales Tax Registration if your turnover exceeds the threshold.

National Tax Number (NTN).

Step 6: Safe Initial Investment for Your ATM Company

A substantial initial expenditure is needed to launch an ATM business, which includes the price of ATMs, installation, and cash reserves. 

Below are some funding options:

• Personal Savings: Finance the company using your own money.
• Bank Loans: Request business loans from banks. Collateral and a strong business plan are required.
• Investors: Look for funding from venture capitalists or private investors.
• Government Grants: Examine the government’s small business grants.

Step 7: Get a Business Credit Card and Open a Business Bank Account

Open a business bank account as soon as your company is registered so that you can keep your money apart from your personal assets. 

To pay bills and raise your company’s credit score, you might also think about obtaining a business credit card.

Step 8: Buy Your ATM Machine

Choose a reliable ATM machine that meets your business needs. Consider factors like:

• Cost: Prices range from PKR 300,000 to PKR 600,000 per machine.
• Features: Look for features like cash recycling, biometric authentication, and remote monitoring.
• Vendor Reputation: Purchase from reputable vendors who offer warranties and maintenance services.

Step 9: Get a Contract with Business Owners

If you’re placing ATMs on third-party premises, draft a contract with the business owner. The contract should cover:

• Revenue Sharing: Agree on a percentage of transaction fees to be shared with the business owner.
• Responsibilities: Outline who is responsible for maintenance, security, and cash replenishment.
• Duration: Indicate the contract’s duration and terms for renewal.

Step 10: Purchase and Set Up the Software for Your ATM

In order to conduct transactions and connect to banking networks, your ATM will need software. 

Work with a software provider to install and configure the necessary systems. Ensure the software complies with State Bank of Pakistan (SBP) regulations.

Step 11: Obtain Business Insurance

Protect your business from potential risks like theft, vandalism, and technical failures by purchasing business insurance. 

Among the policies to think about are:

• Insurance for General Liability
• Insurance for Real Estate
• Insurance for Cash in Transit

Step 12: Open for Business

Once everything is set up, you’re ready to launch your ATM business. Ensure your machines are fully operational and promote your services to attract customers.

Step 13: Discover How to Refill Your ATM

Regularly refill your ATMs with cash to ensure uninterrupted service. Develop a schedule and process for cash replenishment, keeping security in mind.

Step 14: Create Marketing Materials for Your ATM Business

Promote your ATM business through:

• Signage: Place clear signs near your ATMs.
• Partnerships: Work together with nearby companies to increase traffic to your machines.
• Digital Marketing: To reach more people, use internet advertisements and social media.

White Label ATM Guidelines by the State Bank of Pakistan (SBP)

The State Bank of Pakistan (SBP) has established clear guidelines for White Label ATMs (WLAs), which are ATMs owned and operated by non-bank entities. 

These SBP atm guidelines ensure operational efficiency, security, and consumer protection. 

Here is a short summary of the main ideas:

1. Requirements for WLA Operators

• Must be a registered company in Pakistan.
• SBP’s minimum capital requirements.
• Should have the technical expertise to manage ATM operations.

2. Licensing and Approval Process

• Send in an application to the SBP together with the necessary paperwork, such as financial predictions and a business plan.
• Obtain SBP approval before starting operations.

3. Operational Guidelines

• Ensure the availability  24/7 of ATMs.
• Maintain robust security measures to prevent fraud and cyberattacks.
• Conduct regular maintenance to minimize downtime.

4. Revenue Model

• Charge transaction fees as per SBP guidelines.
• Share revenue with partnering banks through agreed terms.

5. Infrastructure Requirements

• Implement reliable IT systems and secure network connectivity.
• Maintain backup systems for uninterrupted operations.

6. Regulatory Requirements

• Comply with Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations.
• Submit regular reports to the SBP on transactions and compliance status.

7. Consumer Protection

• Display transparent fee structures for customers.
• Provide customer support to resolve issues promptly.
• Educate customers on safe ATM usage and fraud prevention.

8. Penalties for Non-Compliance

• Fines for violations of operational or regulatory requirements.
• License revocation in cases of serious non-compliance.
• Potential legal action for breaches of AML or CTF regulations.

Suggestions for ATM Business Growth in Pakistan

To grow your ATM business in Pakistan, focus on these key strategies:

1. Expand Your Network:
   • Install ATMs in high-traffic areas like malls, universities, and transport hubs.
   • Partner with local businesses to host ATMs on their premises.
2. Enhance Customer Experience:
   • Offer biometric ATMs for added security and convenience.
   • Provide 24/7 customer support for issue resolution.
3. Leverage Technology:
   • Use remote monitoring to reduce downtime.
   • Integrate cash recycling features to minimize refill frequency.
4. Diversify Services:
   • Add bill payment and mobile top-up options.
   • Partner with banks for cardless transactions.
5. Marketing and Partnerships:
   • Promote your ATMs through digital marketing and local advertising.
   • To increase reach, work with banks and fintech businesses.
6. Pay Attention to Security:
   • Put in place cutting-edge security measures to win over customers.
   • Update systems frequently to guard against fraud and cyberattacks.
7. Monitor Performance:
   • Analyze transaction data to identify underperforming ATMs.
   • Depending on usage trends, move or upgrade ATMs.

By adopting these strategies, you can scale your ATM business and maximize profitability in Pakistan.

ATM Captured Card Policy SBP

The State Bank of Pakistan (SBP) has established definite guidelines for processing ATM-captured cards for prompt solutions:

• Instant Notification: ATMs should notify customers in case a card is captured.
• Daily Inspection: Banks should daily check ATMs and record captured cards.
• Return Procedure: Within five working days, cards must be returned to the issuing bank.
• Suspicious Cards: Suspicious cards should be reported to SBP and retained for six months.
• Customer Support: Banks must facilitate users to file complaints and educate them on recovery.
• Monitoring and Reporting: Banks are required to report and record retained cards to be inspected by SBP.

These steps facilitate efficiency, security, and customer convenience for ATM transactions.

Scope of White Label ATM Business in Pakistan

White Label ATMs (WLAs) offer a great opportunity to expand banking services in both urban and rural areas. These ATMs are operated by non-bank entities and provide key financial services like cash withdrawals, deposits, and fund transfers.

Key Benefits

• Financial Inclusion: Helps reach remote areas where bank ATMs are limited.
• Cost Efficiency: Banks save costs while expanding their network.
• Revenue Generation: Operators earn through transaction fees.

Market Potential

• Growing Demand: More ATMs are needed to meet financial accessibility needs.
• Deployment Locations: WLAs can be placed anywhere, including shopping malls, petrol stations, and rural areas.

Key Players & Future Prospects

• Webdnaworks (Pvt) Ltd (WPL): The first licensed WLA operator in Pakistan, aiming to install 600 ATMs nationwide.
• Collaboration with Banks: Banks can expand their reach without owning ATMs, creating new partnerships.

Ways Tax Can Help You

WaysTax simplifies business setup and compliance for ATM operators in Pakistan. 

Our services include:

1. Company Registration:
   • Register as Pvt Ltd, SMC, or LLP and handle all SECP paperwork.
2. Tax Services:
   • Assist with NTN registration, sales tax filing, and income tax returns for FBR compliance.
3. Ongoing Support:
   • Provide regular compliance checks and updates on regulatory changes.

Ways Tax takes care of the legal and tax issues so you can concentrate on expanding your ATM business.

Final Thoughts

Now that you have learned how to start an ATM business in Pakistan, it is a promising venture with the right planning and execution. 

You can make sure your company is financially stable, consistent with the law, and positioned for expansion by using our comprehensive guidance and Waystax’s experience. 

Start now to capitalise on Pakistan’s expanding need for easy-to-use banking services.