Operating an ATM in Texas comes with regulatory requirements at both the state and federal level. Here’s a practical overview of what ATM owners and host locations need to know to stay compliant.
Texas-Specific Regulations
Texas does not require a separate state license to operate an ATM, which makes it one of the easier states for ATM ownership. However, you must still comply with federal regulations and industry standards.
The Texas Department of Banking oversees money transmission activities, but standard ATM operations (cash dispensing via a licensed processor) are generally exempt from money transmitter licensing requirements.
Surcharge Disclosure Requirements
Federal law (Regulation E) requires that ATM operators clearly disclose surcharge fees before the customer completes a transaction. This means:
- The ATM screen must display the surcharge amount and give the customer the option to cancel before being charged
- A physical notice must be posted on or near the ATM stating that a fee may be charged
- The surcharge amount must appear on the customer’s receipt
Most modern ATM software handles the on-screen disclosure automatically. The physical notice is your responsibility as the ATM operator — a simple sticker or placard on the machine is sufficient.
ADA Compliance
ATMs must comply with the Americans with Disabilities Act (ADA). Key requirements include:
- Height: Controls and screens must be reachable from a wheelchair (generally no higher than 48 inches from the floor for a forward reach)
- Audio guidance: ATMs must provide audio output for visually impaired users (a headphone jack with spoken instructions)
- Braille: Function keys should have Braille labels
All current-generation ATMs from major manufacturers (Genmega, Hyosung, Hantle) ship ADA-compliant. If you’re operating an older machine, verify it meets current standards.
PCI DSS Compliance
The Payment Card Industry Data Security Standard (PCI DSS) applies to all devices that process card transactions, including ATMs. Key requirements:
- EMV compliance: Your ATM must accept chip cards (EMV). Magnetic-stripe-only machines are a significant fraud risk and may result in liability shifts
- Encryption: All card data must be encrypted in transit and at rest
- Software updates: Keep your ATM’s operating system and application software current
- Physical security: The ATM must be tamper-resistant, and you should regularly inspect for skimming devices
Your ATM processor handles most of the PCI compliance on the network side, but the physical security and software updates are the operator’s responsibility.
Anti-Skimming
ATM skimming — where criminals attach devices to steal card data — is a real threat. As an ATM owner or host location, you should:
- Inspect the card reader and keypad regularly for loose or unusual attachments
- Install anti-skimming devices (available from your ATM manufacturer)
- Position the ATM in a well-lit, camera-monitored area
- Report any suspicious activity to your processor and local law enforcement immediately
Reporting and Record Keeping
Maintain records of all cash loads, maintenance visits, and transaction settlements. These records are essential for tax purposes (ATM surcharge revenue is taxable income) and for resolving any transaction disputes.
TexCash Solutions Keeps You Compliant
Navigating ATM regulations doesn’t have to be complicated. When you work with TexCash Solutions — whether through free placement or a machine purchase — we ensure your ATM is fully compliant with all applicable regulations from day one. Contact us if you have questions about ATM compliance in Texas.