Handling Regulatory Issues - How and when they pay off.

In the past year ATM deployers have dealt with the ADA  deadline with PCI and EMV not far behind, not to mention the Windows 7 integration and deposit automation. It sounds like a headache I know, but it's really not all that complicated.  These all contribute to necessary hardware and software updates that need to be acknowledged.  But why are all of these upgrades even necessary? Two reasons:

Technology Shifts and Regulatory Mandates.

The upgrades due to technology shifts are not necessarily "legally" mandatory, but if you want to remain competitive then upgrades like Windows 7 and deposit automation are crucial.

Regulatory mandates such as ADA, PCI and EMV are necessary for financial institutions and deployers to keep up with regulatory compliance.  The fees with non-compliance fines and liability related lawsuits are much greater than the cost of the upgrades, so in the end the payoff is upgrading.

EMV is a bit of an exception because it isn't necessarily going to be a governmet regulation. You may have heard the term "Liability Shift" thrown around quite a bit. This liability shift is what is driving the EMV transition.  There is no specific penalty for not upgrading to a smart-card reader. However, with the liability shift, the responsibility of fraudulant activity trickls all the way down to the ATM owner.

A quick example: in Canada, an ATM destributor opted to not upgrade four of his machines by the January 1, 2013 deadline. Word got around that these four machines were not ready to accept EMV, so they were targetted. The thieves obtained a number of comprimised cards with unknown balances and withdrew over $90,000.  Needless to say these charges were being disputed by the actual account holders and because the liability shift deadline had passed, the only party that was required to pay back that $90,000 was the small time ATM destributor. And all for now spending the extra cash to upgrade his four machines.

With that being said the final decision when upgrading should make sense in that as an investment, they should generate a return.  Ofcourse common sense will tell us that not upgrading even just four machines isn't worth $90,000. 

Mathias Thiele, VP of Global Development at ACG Inc., uses the example of the automation of check handling: “Automating check processing results in greater operational efficiency and lower operational costs for end users, therefore satisfying the ROI (return on interest) requirement”.

Larger institutions have already adopted automatic check processessing where as the small companies are still in the process, though due to the cost of the upgrade it is actually more burdensome on the small company's budget than on larger institutions.  However, it is still essential for the smaller communities to invest into the upgrades to simply stay relevant in the industry.

These advances and requirements will come and go. The best thing to do is upgrade as soon as possible, otherwise take a step back and consider your companies budget.  Will remaining behind one step really affect you? Will it really hurt you if you don’t get that iPhone 5s and stick with the iPhone5? Advance your machines when it’s mandated and fiscally sensible and always remember to solicit advice and service at


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