Gokis Kiosk Self-Service

Video ATMs come to UAE

Emirates-NBD is rolling out video chat at 10 to 15 teller machines in the UAE to give users a direct video feed to multi-channel contact centres to boost customer service, confirmed Ali Sajwani, the bank's chief information officer.

gulfnews : Video ATMs come to UAE

Dubai: Video calling is coming to an ATM near you. Emirates-NBD is rolling out video chat at 10 to 15 teller machines in the UAE to give users a direct video feed to multi-channel contact centres to boost customer service, confirmed Ali Sajwani, the bank's chief information officer.

The new initiative will be launched through partners Avaya Networks at an undetermined number of the bank's 750 ATMs in Dubai, Al Ain and Abu Dhabi.
"We're very proud to be one of the first banks to offer these services," Sajwani said yesterday at Telecoms World Middle East 2011 in Dubai.

Sajwani didn't give a specific target date for the launch of the new video-enabled ATMs but said implementation would be paced across the country to avoid long queues at video ATMs that are expected to be in high demand.

Nidal Abou Ltaif, Avaya area vice-president of Emerging Markets, said the video ATMs would help meet "demands of a new generation." Avaya is "delighted to serve a leading institute like Emirates NBD," he said.

gulfnews : Video ATMs come to UAE

Mega-Retailer Announces Mega-ATMs

ATMs are coming to Walmart. And, just like everything the mega-retailer does, they will be supersized. The company announced last week that it will begin placing a “Money Center in a box” inside some of its stores,

Mega-Retailer Announces Mega-ATMs | Credit.com News Advice

ATMs are coming to Walmart. And, just like everything the mega-retailer does, they will be supersized. The company announced last week that it will begin placing a “Money Center in a box” inside some of its stores, according to reporting by American Banker.

For years Walmart has run Money Centers, staffed by human beings, which offer bank-like services including check cashing, bill payment and wire transfers. The idea is to expand the centers into new stores, but without the labor costs or dedicated floor space required by a traditional kiosk.

The company did not announce where the new ATMs will be located or how many it will install. The announcement was made by Jane Thompson, Walmart’s soon-to-be-former chief of financial services, during the 6th Annual Underbanked Financial Services Forum.

“It’s going to be kind of like ‘Where’s Waldo.’ You’ll have to find them,” Johnson said.

More than 1,000 of Walmart’s 3,815 stores in the U.S. currently have Money Centers. They are some of the most profitable areas inside Walmart stores, said Johnson.

The company also is one of the largest sellers of prepaid cards, issued by Green Dot Corp. The new ATMs will let people refill their cards without waiting in line at the checkout counter.

Poll: ATM owners and operators see major challenges facing their industry

Declining ATM withdrawals, network costs and legislation related to Disabilities Act has ATM ISOs "concerned".

Poll: ATM owners and operators see major challenges facing their industry | ATM Marketplace

ATM owners and operators, concerned about the changes buffeting their industry, will begin arriving Tuesday for the annual ATM Industry Association (ATMIA) Conference in Miami, where many of those concerns will be aired and addressed.

Despite the challenges, the overwhelming majority of owners and operators say they plan to grow their businesses through additional investments and by working with government agencies to protect the interests of independent sales organizations.

The owners and operators are most concerned with network changes and increased costs, pending legislation and declining transactions, according to a survey by Kahuna ATM Solutions, the nation’s only business development catalyst dedicated to the success and profit maximization of independent sales organizations and operators. Kahuna polled online 200 ISOs and received 69 responses.

The survey, which was conducted in November, found that 54 percent of ISOs and operators believe pending legislation and network changes are the greatest areas of concern with respect to the health of the ATM industry and the future profitability of their companies.

Twenty-eight percent of the 54 percent cited network changes and increased costs as their single biggest concern. Twenty-six percent of the 54 percent cited pending legislation as the major issue out of the two.

“This year will be very telling for our industry as the pendulum could be redirected in so many ways by governing bodies,” said Bryan Bauer, president of Kahuna, which is based in Bloomington, Ill.

The survey also found that 15 percent of respondents said declining ATM withdrawals are their big concern. Thirteen percent indicated ATM saturation in the U.S. is what scares them the most and poses the greatest threat to their business.

North America boasts the highest density of ATMs per capita, according to Global Industry Analysts, Inc., a San Jose, Calif.-based market research company. In 2009, there were 492,000 ATMs in North America.

“The survey results affirm what our team has heard time after time during conversations with our clients and other ISO and operators in the industry,” Bauer said. Kahuna’s affiliate network of independent distributors and operators manage and process transactions for 13,000 ATMs nationwide.

Mike Lee, CEO of ATMIA, said the poll identifies issues of concern for ATM owners and operators.

“Surveys like this help us to hear the heartbeat of our members,” Lee said. “It is clear that U.S. independent deployers are concerned about changing legislation and interchange erosion. “

He added: “ATMIA will invest heavily in 2011 in lobbying, government relations and legal work to our utmost to maintain and build a sustainable and thriving ATM market in the U.S.”

The National Association of ATM ISOs and Operators (NAAIO), a trade association that represents ATM ISOs and operators, also has a vested interest in minimizing the changes affecting their industry. The National Association of ATM ISOs and Operators is concerned about federal rulemaking under the Dodd-Frank Wall Street Reform and Consumer Protection Act and The Americans With Disabilities Act.

“We want to ensure that new guidelines for the visually impaired, adopted last and under consideration this year, do not require ISOs to spend millions of dollars upgrading or replacing older ATMs that have years of useful life,” said Jim Cabe, president of NAAIO.

President Barack Obama signed the Dodd-Frank Act into law July 2, 2010. The legislation contains the Durbin Amendment, which addresses restrictions on debit card interchange, a concern of the ATM industry.

Although the industry faces a series of challenges, the majority of independent sales organizations are focused on the future growth of their businesses, the survey found.

Some 73.5 percent of poll respondents said they planned to grow their businesses in the next year compared with 5.6 percent who did not plan to make any changes. Only 1.8 percent said they were looking to retire or sell their companies in the next 12 months.

“The numbers regarding the future growth of the ISO business was a little surprising,” said Pamela Philipps, Kahuna’s vice president of affiliate development. “We are engaged in more and more conversations where ISOs are looking for help to transition away from their businesses or sell their businesses. However, in general, most of our clients are optimistic about the growth of their businesses."

Companies are interested in growing their businesses by offering remote deposit capture, cash advances, prepaid gift and loyalty cards, bill payment and check cashing.

“If you are an ISO and you are surviving on just your ATM revenue, you are not looking to the future,” said Trey Prats, president of ATM Worldwide, which is based in Kenner, La. “We have seen profits shrinking over the years; we’ve seen compliance get more difficult. All that being said, if you are not looking for ancillary products, then you have blinders on.”

Bauer cautions, however, that ancillary products and services should not supplant the ATMs primary function, which is to dispense cash. Bauer also suggested that ATM operators join forces with a larger company, like Kahuna, to “save money and make more money.”

Alicia Blanda, who conducted the survey for Kahuna, also suggested that ATM ISOs and owners should spend money marketing their companies. “Marketing is important for any business and is something that ATM ISOs shouldn’t put off doing,” said Blanda, president of Lagniappe Marketing and Public Relations.

ATMIA’s annual conference will be held from Feb. 22 through Feb. 24.

Poll: ATM owners and operators see major challenges facing their industry | ATM Marketplace

Crooks Rock Audio-based ATM Skimmers

Criminals increasingly are cannibalizing parts from handheld audio players and cheap spy cams to make extremely stealthy and effective ATM skimmers, devices designed to be attached to cash machines and siphon card + PIN data, a new report warns.

Crooks Rock Audio-based ATM Skimmers — Krebs on Security

See source article for nice pictures of the actual devices...

The European ATM Security Team (EAST) found that 11 of the 16 European nations covered in the report experienced increases in skimming attacks last year. EAST noted that in at least one country, anti-skimming devices have been stolen and converted into skimmers, complete with micro cameras used to steal PINs.

EAST said it also discovered that a new type of analog skimming device — using audio technology — has been reported by five countries, two of them “major ATM deployers” (defined as having more than 40,000 ATMs).

In the somewhat low-res pictures supplied by EAST here, the audio skimming device is mounted on a piece of plastic that fits over the ATM’s card reader throat. A separate micro camera embedded in the plastic steals the victim’s PIN.

The use of audio technology to record data stored on the magnetic stripe on the backs of all credit and debit cards has been well understood for many years. The basic method for conducting these attacks was mentioned in a 1992 edition of the hacker e-zine Phrack (the edition that explains audio-based skimmers is Phrack 37). Since then, other electronics enthusiasts have blogged about their experiments with sound skimmers; for example, this guy discusses how he made a card reader device out of an old cassette recorder.

Recently, I had a chance to chat via instant message with a hacker in Eastern Europe who sells both audio-based ATM skimmers and the technology needed to decode audio skims or “dumps.” Below are some of the pictures of his wares that he sent me:

Crooks Rock Audio-based ATM Skimmers — Krebs on Security

Blackhat News - Triton and Tranax Sing the Blues

Imagine ATMs spewing out all of their cash and letting you view admin passwords and account PINs. The news every year from Blackhat usually includes one of these demos (and it does again).

Finextra: Researcher shows off ATM 'jackpot' hacks

Barnaby Jack, a researcher at security firm IOActive, was forced to pull his demonstration at the event last year after the cash machine manufacturer called for more time to find patches.

This year he went ahead with the exhibition, hacking ATMs from Triton and Tranax - both of which run on Microsoft's Windows C.

To 'jackpot' the Triton machine he used a key available for sale online to open it up and install a USB containing malware which forced it to spew out all its notes.

The Tranax ATM was hacked through a vulnerability in its remote monitoring system which enabled him to exploit software that uses the Internet or phone lines to take control of it. He then uploaded code forcing the machine to spit out all of its cash and letting him view administrative passwords and account PINs.

"I've always liked the scene in Terminator 2 where John Connor walks up to an ATM, interfaces his Atari to the card reader and retrieves cash from the machine. I think I've got that kid beat," says Jack.

Triton and Tranax have both issued fixes for the vulnerabilities.

a title="Finextra: Researcher shows off ATM 'jackpot' hacks" href="http://www.finextra.com/news/fullstory.aspx?newsitemid=21653">Full Article

ATM vendors threaten researcher, stop his presentation on ATM flaws

ATM Vendors stop presentation on ATM flaws at Hack in the Box conference in Amsterdam last week. Not the first time this has happened and all the slides are online anyway. Talks about RBN and new professional generation of hackers for financial info.

In an unexpected turn of events, a presentation about "The Underground Economy" by Italian white hat hacker and security expert Raoul Chiesa at the Hack In The Box conference held last week in Amsterdam, was replaced at the last minute with a presentation on "Side Channel Analysis on Embedded Systems" by Job de Haas.

According to Softpedia, the reason behind this cancellation was the fact that the originally scheduled presentation covers details of various techniques and exploits of vulnerabilities that cyber criminals use to break into ATM machines.

As you can surmise, ATM vendors weren't too happy about that fact and employed legal means to prevent Chiesa from addressing the conference crowd.

Even though this is not the first time that ATM vendors prevented a security researcher to publicly disclose findings about flaws in their devices at a conference, this instance is really surprising, since Chiesa held this same presentation at a couple of security conferences already, and the slides he employed are also available online.

What the vendors hoped to accomplish with this threatening approach is anyone's guess. The organizer of the conference also pointed out that the vendors had plenty of time to patch the vulnerabilities, since they have been notified of them a long time ago.

This unexpected development makes me wonder if Barnaby Jack's previously thwarted demonstration will actually take place at this year's Black Hat USA taking place later this month. Will the ATM vendors try to block that one at the last minute - again?

ATM vendors threaten researcher, stop his presentation on ATM flaws

ATMs Becoming Talking ABM (PAT)

ATM terminals which let customers have real-time chats with tellers and facilitate some additional functions such as issuing checks and coins.

The bank machine you can talk to - The Globe and Mail

Tara Perkins and Grant Robertson
From Thursday's Globe and Mail
Published on Wednesday, Jun. 02, 2010 6:38PM EDT
Last updated on Thursday, Jun. 03, 2010 4:33PM EDT
When was the last time your bank machine smiled at you?

Beginning next week, customers of FirstOntario Credit Union will be able to walk up to an ABM and speak face to face with a person who can not only dispense money, but can also talk to them about a loan or even listen to their complaints.

The difference between these tellers and those in a branch is that, in theory, these tellers could be sitting almost anywhere.

This new kind of ABM, dubbed the personal assistant teller, or PAT, will make it possible for tellers to conduct real-time chats from remote locations, and fulfill functions that a regular ABM can’t. PAT, for instance, can issue cheques and coins.

In some ways, it’s a step back in time for the banking industry, which has increasingly gone to automated banking as a way to cut costs and boost efficiency. The evolution of sophisticated machines and the rise of Internet banking have created reliable ways to manage personal finance, though they have sometimes eliminated the personal touch.

When an employee of FirstOntario heard about the new video ABMs at a conference in the United States, the Hamilton-based credit union immediately began investigating, and it now hopes the technology will eventually revolutionize its business.

ATM News - Wincor Shows Gift Card Dispense

Last week at the Debit & Prepaid Forum in Vegas, Wincor Nixdorf showed off it's latest ATMs with new gift card dispense. They work with Better ATM Services and they utilize a standard cash dispenser to serve as hopper and dispenser. It says they print gift cards but that's overstatement.

ATM, DEBIT & PREPAID FORUM: Gift-card dispensing at ATM gets thumbs up from Wincor Nixdorf

By Tracy Kitten editor
• 30 Oct 2009

Advanced functions at ATMs have been touted for a number of years; few have taken off. But prepaid-card dispensing may be the exception, as a number of big-name ATM manufacturers are feverishly working to integrate the technology into their ATM platforms.

During last week’s ATM, Debit & Prepaid Forum in Las Vegas, a number of ATM manufacturers, including Wincor Nixdorf AG and Nautilus Hyosung America Inc., demonstrated card-dispensing functionality for the ATM. The underlying technology: Deposit automation, which facilitates the immediate acceptance of cash, check or debit for payment of credit to the card.

Through a partnership with Better ATM Services, Wincor Nixdorf is launching its prepaid-card dispensing option. Triton Systems of Delaware and Diebold Inc. also have partnered with Better ATM. Better ATM’s solution uses an ATM’s cash dispenser or cash tray to print prepaid cards, so no upgrades to the ATM are required.

“We think this app for prepaid-card dispensing will go over well, especially in the branch, since issuing prepaid cards is cumbersome for branch staff,” said Wincor Nixdorf’s Saul Caprio during a demonstration at the Forum. “This application runs on our normal ProCash software, so it’s very easy to implement.”

Nice video demonstration

Advanced ATMs coming to Portugal

Not your fathers ATM story -- It is a multi-function kiosk where they can book train and cinema tickets, make social security and tax contributions, pay utility bills and parking fines, top up their mobile phones and play the lottery.

source link

The multi-tasking ‘hole in the wall’
By Jessica Twentyman
Published: October 13 2009 16:37 | Last updated: October 13 2009 16:37
The cash machine that stands outside the recently opened Rui & Dinora supermarket in the tiny Portuguese market town of Vila Nova de Poiares provides the local community with a lot more than easy access to their euros.

It is a multi-function kiosk where they can book train and cinema tickets, make social security and tax contributions, pay utility bills and parking fines, top up their mobile phones and play the lottery.

That is because the ATM [automatic teller machine] in question is part of Multibanco, a nationwide interbank network that offers more than 60 services, via 1,700 cash machines across Portugal.

Last year, Apacs, the UK payments association, described the Portuguese as ”the leaders in cash machine functionality”, pointing out that, in transaction volumes, use of these add-on services in the country had outstripped cash withdrawals for several years. In 2008, payments made via Multibanco’s ATMs topped €25m, according to SIBS, the organisation that runs the network.

The situation is very different in other countries, especially where online banking is a more established and popular channel for accessing financial services.

ATMs in the US and UK, for example, typically offer five or six standard transactions: withdrawal, deposit, account transfer, balance inquiry, statement printing and, in some (limited) cases, mobile phone top-ups.

rest of article

ATM ISOs look to kiosks for deployment, transactional growth

ATM ISOs and DVD Vending Kiosks. Global Axcess interviews with ATM Marketplace/Tracy Kitten and explains the benefits to ISOs. Notes that kiosk market has more nuances than most ATM deployers appreciate.

Tracy Kitten
• 30 Sep 2009

DVD kiosks may not be the magic pill that saves ISOs from declining per-ATM transaction volumes and an industry bend toward surcharge-free ATM offers. But they do provide an alternative. At least that’s the way George McQuain, the chief executive of Florida-based Global Axcess Corp., sees it.

GAXC earlier this year announced plans to launch the InstaFlix DVD-rental kiosk line — a line that aims to go head-to-head with the redbox and Blockbuster Express brands, operated by Coinstar Inc. and NCR Corp., respectively.

Twenty InstaFlix kiosks have been deployed since July under GAXC subsidiary Nationwide Ntertainment Services Inc. Four more installations are expected to wrap within the next two weeks.

ATMs and DVDs seem like an odd self-service marriage. Most ATM deployers looking to kiosks are more interested in advanced financial services kiosks, a business that falls in line with what they already know.

But McQuain argues that getting into the self-service kiosk business has more nuances than most ATM deployers appreciate. Besides, self-service DVD rentals have been tried and proven. They work. Self-service financial services, such as check cashing and bill-payment, however, are still hit or miss in the market.

“The business model for DVD rental is very similar to today’s ATM-placement model, McQuain said. “You’ve got the cost of the machine and the cost of getting that machine installed. You’ve got the cost of the inventory, which corresponds to cost of cash. And then you have maintenance and the cost to conduct the transaction.”

The DVD-rental model may resemble the ATM model, but it’s not a mirrored layout. For McQuain, DVDs are just a way to get a foot in the kiosk door.

“We really see ourselves becoming a self-service company, not just an ATM or DVD-rental deployer,” McQuain said.

GAXC is working with a consultant to determine what additional or new types of self-service applications make sense, but McQuain was reluctant to divulge much more.

But breaking into any new line of business, he says, requires a different mindset. For instance, just because an ATM pulls in 600 transactions per month at a neighborhood Circle K does not mean a DVD-rental kiosk or an advanced-function check-cashing and bill-payment kiosk will find the same success.

“A good ATM location might not necessarily be a good DVD-kiosk location,” McQuain said.
Market variations can make or break a kiosk deployment, since the transactions being offered are more focused and cater to a specific user. Deploying ATMs, on the other hand, is relatively easy, since everyone uses cash, McQuain said.

But market trends and consumer preferences also come into play with entertainment products, which means some legwork on the front end, McQuain says.

“In the DVD kiosk, each of the terminals we’re using has a capacity for 600 distinct films; so we have to look at the market and figure out what people in that market will rent,” he said. “What is the correct mix between new releases and older movies?”

The inventory request becomes more daunting than simply loading ATM cassettes with tens and twenties. And the profit margins won't be the same, at least not in DVD deployments.

“You’re not going to profit on a DVD transaction like you do on a cash transaction,” McQuain said. “With DVD rental, you pay the interchange, rather than getting a percentage of it. So, in order to make money, you do need a much higher transaction level than non-bank ATM deployers are used to seeing on ATMs.”

Getting the hardware poses another challenge, since most DVD-kiosk manufacturers are based outside the United States. GAXC, for instance, is working with Italy-based Video Systems Group SRL.

So not only do the machines cost more, but it also can take a long time to get them. A DVD or multifunctional kiosk could cost between $20,000 and $30,000, while an entry-level cash dispenser’s price point ranges from $1,500 to $3,000.

Rest of story

ATM Machines - Fake ATMs and Malware Infested

The Defcon in Vegas had fakes ATMs and non-dispensing ATMs spice up the event this year. Hard to believe but a fully fake ATM being placed in hotel (next to security office). Or machines that take your card and then just make sounds but never dispense money.

Fake ATMs

Back in April we told you about a global ATM skimming ring that was traced back to Romania. This week another ATM scam popped up in Las Vegas – at the DEFCON security conference, no less.

The no-armed bandit showed up in one of the cleverest, or most unlikely, spots in the Riviera Hotel Casino, depending on how you look at it. Why the dichotomy? It was positioned in a rare location not watched by a security camera. The flipside? It was right outside the casino’s security office.

Aries Security CEO Brian Markus spotted the machine and pointed it out to hotel security, according to Wired.

Markus said it was clear to him the ATM was fake when he looked at the smoked glass on the front of the machine and noticed something funny about it. When he beamed a flashlight through the glass, instead of seeing a camera behind it, he saw the PC that was set up to siphon card data.

Las Vegas may not be the area with the highest concentration of ATMs – that designation goes to Harvard Square in Cambridge, Mass., which has over 50 in just a two-block vicinity – but the machines are certainly ubiquitous in a town known for a need for quick cash.

The illicit Riviera ATM wasn’t the only one found in Vegas this week. PC World reports that the Secret Service is investigating reports of hacked ATMs across the city. At the Rio All-Suites Hotel and Casino DEFCON presenter Chris Paget reported trying unsuccessfully to withdraw cash from one, but still having his account debited.

He wasn’t the only one. Paget spoke with an Israeli man who had tried to withdraw $1,000, as well as a woman who tried to take out $400. At least a half dozen people experienced the same problem at various machines in the hotel, Paget said.

Channel Web reports that, “In an ironic twist, a scheduled presentation titled “Jackpotting Automated Teller Machines” at the conference by Juniper Networks researcher Barnaby Jack was scrapped because of an unnamed ATM vendor, who cited security reasons, according to SC Magazine.”

––

ATMs with Malware

Security Analyst: Las Vegas ATMs May Have Malware
Jeremy Kirk, IDG News Service
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FIND A REVIEW

Monday, August 03, 2009 4:30 AM PDT
The U.S. Secret Service said on Monday it is investigating a group of ATM machines in Las Vegas that are debiting people's accounts but not dispensing cash.

The case came to light after Defcon hacker conference presenter Chris Paget tried to withdraw $200 on Sunday from his account at the Rio All-Suite Hotel and Casino. He wanted buy a metallic copy of the Bill of Rights, a joke gift designed to set off airport metal detectors from the magicians Penn and Teller.

The ATM "whirred and chugged," Paget said, "but no money came out." His account, however, was debited.

He wasn't the only one. Paget spoke with an Israeli man who had tried to withdraw $1,000, as well as a woman who tried to take out $400. At least a half dozen people experienced the same problem at various machines in the hotel, Paget said.

Paget, who has expertise in credit-card security and runs a hardware security consulting company, notified the hotel staff, who didn't take action to shut down the machines.

"The best they would do was put a sign on the ATM saying 'Out of order,'" Paget said. "We were standing by the ATMs warning people."

Paget considered unplugging the machines, but the hotel's security told him he would potentially be prosecuted for vandalism.

Paget's experience points to the increasing frequency with which criminals are targeting ATMs. One scam is to attach a device to the ATM known as a skimmer that can record details stored on a card's magnetic stripe. A person's PIN (Personal Identification Number) can be captured with an overlay on the keypad or a video camera. Then, the card can be cloned.

Security experts have also seen samples of malicious software designed for ATMs that can record card details. Earlier this year, analysts at Trustwave's SpiderLabs research group said the malware came from a financial institution that had been affected in Eastern Europe.

In Paget's case, a Rio hotel representative said on Monday that she was unaware of the problem and advised calling the hotel's accounting office later. A Secret Service officer in the Las Vegas area confirmed the agency was looking into the issue along with the Las Vegas Metropolitan Police Department. Paget said he left a voicemail with the Federal Bureau of Investigation.

Paget also contacted Global Cash Access, a company that specializes in managing cash machines for the casino industry. The company told Paget they had no record of the withdrawal, although it showed up when he checked his online banking statement.

Paget said it is possible that the machines have been infected with malware. The program could be directing the machines not to dispense cash, which then is picked up by an insider in on the scam, he said. But it's too early to tell.

If the problem is not simply malfunctioning machines, it would be at least the second incident of something funny going on with ATMs around Defcon.

Earlier in the week, conference attendees at the Riviera Hotel noticed what was on inspection a bogus ATM machine positioned in the lobby. They shined a light into its screen, which revealed a PC behind it. Law enforcement later confiscated it.

Ironically, one of the talks planned for this year's Black Hat and Defcon conferences dealing with ATMs was cancelled. A researcher with Juniper Networks, Barnaby Jack, was supposed to detail a vulnerability affecting a popular line of new ATMs. But Juniper barred Barnaby from giving his presentation after the unnamed ATM vendor threatened legal action.

NCR reports revenue decline, 91% net loss for the year

Tracy Kitten article on latest NCR results provides a great overview of NCR (and financial services in general) in the current environment. Worth noting Bank of America is trimming 10% of it banks noting that mobile and online transactions have eaten into those transaction centers (and where people like NCR, Diebold and Wincor/IBM make a few dollars).

Tracy Kitten, contributing editor

• 24 Jul 2009

The economic crunch is taking its toll on ATM manufacturers. Earlier this week, Germany-based Wincor Nixdorf announced significant income dips for the second quarter of the year, and now Duluth, Ga.-based NCR Corp. reports similar results.

At the close of Q2, which ended June 30, NCR’s revenue for the quarter was down 16 percent from the same period last year and down 6 percent for the year. But net income took an even greater hit, falling from $44 million, 26 cents per share, in Q2 2008 to $23 million, 14 cents per share, for Q2 2009. For the year, net income is down 91 percent, from $92 million, 53 cents per share, to 8 million, 5 cents per share.

Bill Nuti, NCR’s chairman and chief executive, says the company continues, despite its revenue and net income dips, to see positive results in certain areas:

While NCR continues to operate in a challenging environment for the core end markets we serve, our solutions are generating results in the areas where our customers are investing. In the meantime, we are executing on our vision to lead the self-service revolution in customer transactions, as evidenced by our entry into the entertainment kiosk market, and we are winning business in other new industry verticals as well.

We have also taken steps to enhance our global competitive position through major investments in our infrastructure in both the U.S. and South America. These initiatives will strengthen our manufacturing and sourcing capabilities and further improve our innovation, productivity and ability to meet customer needs.

NCR says the downturn in the global economy and its impact on capital spending in the financial services, retail and hospitality industries is to blame for the year-over-year revenue decreases. The company’s revenues in the Americas was down 13 percent for the year because of decreased product sales, NCR says.

Read rest of article

Security - Hacking into ATM via Windows CE

Writeup on ATM hack via Windows CE. Worth noting that 56% of ATMs run on Windows (rest on OS/2). Vendors noted with responses include Diebold and NCR (both claim to not be exploited). We also note that many of the new gas pumps are running Windows CE for that matter.

From Slashdot

"A researcher working for networking company Juniper has been forced to cancel a Black Hat presentation that would have revealed a way to hack into ATM machines. The presentation focused on exploiting vulnerabilities in devices running the Windows CE operating system, including some ATMs. The decision to cancel was made to give the vendor concerned time to patch the problem, although the company was notified 8 months ago. The article mentions a growing trend in ATM hacking: In November 2008 thieves stole nearly $9 million from more than 130 cash machines in 49 cities worldwide. And earlier this year, the second biggest maker of ATMs, Diebold, warned customers in an advisory that certain cash machines in Eastern Europe had been loaded with malicious software capable of stealing financial information and the secret PINs from customers performing ATM transactions."

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Flaw Opens ATMs to Hackers
A conference presentation would have exposed flaws in some cash machines.
By Robert Lemos
Barnaby Jack, a security researcher at the computer networking giant Juniper, had planned to hack into an automatic teller machine (ATM) live onstage at the Black Hat Security Conference in Las Vegas later this month. But his presentation, designed to demonstrate the insecurity of various ATMs, attracted the attention of the financial industry as well as security professionals, and under pressure from ATM manufacturers, Juniper canceled the presentation last week, citing concerns that the vulnerabilities involved had still not been fixed.

"The vulnerability Barnaby was to discuss has far reaching consequences, not only to the affected ATM vendor, but to other ATM vendors and--ultimately--the public," wrote Brendan Lewis, director of corporate social media relations for Juniper in a statement posted to the company's official blog last week. "To publicly disclose the research findings before the affected vendor could properly mitigate the exposure would have potentially placed their customers at risk. That is something we don't want to see happen."

The presentation would have focused on exploiting vulnerabilities in devices running the Windows CE operating system, including some ATMs, according to a source familiar with the details. While the presentation was canceled to allow manufacturers more time to fix the vulnerabilities, Juniper had originally notified the company almost eight months ago, says the source, who asked not to be named.

Other security experts are not surprised that the vulnerabilities are there to find. Significant flaws in cash machines and ATM networks are plentiful, says Nicholas Percoco, senior vice president of TrustWave, an information security and compliance firm that has assessed the security of point-of-sale terminals, kiosks, and ATM networks. "It is very, very rare that a device comes to our labs--in fact, I don't think that it has happened--that we don't find a vulnerability," Percoco says.

ATMs have also been the focus of a number of high-profile security incidents in the past 12 months. In November 2008, thieves stole nearly $9 million from more than 130 cash machines in a matter of hours using fake payroll cards. The scheme, which took place in 49 cities worldwide, relied on hackers breaching the network of financial firm RBS WorldPay and reloading cards so that they could withdraw an average of $90,000 per account.

In January of this year, the second biggest maker of ATMs, Diebold, warned customers in an advisory that certain cash machines in Eastern Europe had been loaded with malicious software capable of stealing financial information and the secret PINs from customers performing ATM transactions. The stealthy software, which infected at least 20 ATMs, allowed criminals to print out card details on ATM receipts and eject the cash cartridge from the ATM kiosks, according to an analysis of the software performed by TrustWave.

"Once the attackers get in through the back-end systems, they essentially camp out," says Percoco. "It is cash, so it is real money; it's not like they are charging to a credit card and have to sell the goods."

Among recommendations to its customers, Diebold asked that banks and ATM owners periodically change the kiosks' administrator passwords and ensure that the firewalls are active. Diebold believes that attackers had to have physical access to the systems to load the malicious software in the first place. "To the company's knowledge, this is the first incident dealing with a physical attack and installation of illegal software within the ATM unit," Diebold said in a statement issued at the time.

NCR, the leading supplier of ATMs worldwide, has taken a multilayered approach to securing its cash machines. The company uses a technology, known as Solidcore, that prevents unauthorized code from running on its Windows-based systems, and it recommends that customers lock down the Windows XP operating system by using the built-in firewall and virtual private networking. Other security features include physical measures to make it apparent if a fraudster attaches a device to steal card information to the ATM, a mechanism to prevent such devices from easily reading bank cards, and ink that stains stolen cash.

Representatives for both NCR and Diebold denied that any of their machines were to be the focus of Juniper's demonstration, however.

Link

Wincor Nixdorf names new CEO, takes over #2 spot in ATMs

In financial news Wincor Nixdorf names new CEO for U.S. division. In related news RBR research over in UK raised Wincor into the #2 spot for worldwide ATM deployments.If we had to guess -- in the U.S. it is still a battle between NCR (36%) and Diebold (35%) with Wincor around 20. The lack of service network in the U.S. is likely Wincor's biggest disadvantage (and which they are probably focusing on improving...). In the U.S. it is safe to say Wincor is here to stay.

Wincor Nixdorf names Patrick Wright CEO of U.S. division - Austin Business Journal:

Wincor Nixdorf names Patrick Wright CEO of U.S. division
Austin Business Journal

Retail banking veteran Patrick Wright has been named CEO of Wincor Nixdorf Inc.'s U.S. division.

Wright, formerly a senior executive with JP Morgan Chase & Co., will oversee the German company’s U.S. operations from its domestic headquarters in Austin.

Retail and banking information technology company Wincor Nixdorf s now the second largest provider of ATMs in the world. The company currently has contracts or is in trials with nine of the top 25 U.S. banks.

“Among Wincor Nixdorf’s primary objectives is our continued acquisition of market share in the vital U.S. market,” says Javier López-Bartolomé, senior vice president of the Americas for Wincor Nixdorf. “Given Patrick’s direct industry expertise and proven business acumen, we are confident that his appointment to this key leadership position will accelerate our success.”

Wright is a native of Midland, Texas.

Wincor Nixdorf operates in more than 90 countries and has manufacturing operations in China, Germany and Singapore.

Followup to US Bank purchase

Nice followup article on US Bank purchase of Palm Desert by Tracey Kitten at ATMmarketplace.com. Includes quotes from Hamed at TIO basically saying this is another very positive step for the ATM industry and how vault cash is no longer a growth.

source link

U.S. Bank buys PDNB ATM, kiosk services and cash biz

By Tracy Kitten editor
• 20 Aug 2008

U.S. Bank ($247 billion in assets), the lead bank of U.S. Bancorp and owner of Elan Financial Services, announced plans this week to acquire most of Palm Desert National Bank's Electronic Banking Division.

The deal includes the sale of California-based PDNB's ATM and kiosk-management services, as well as its cash-management and vault-cash operations, which manages nearly $1 billion in vault cash for more than 22,000 ATMs and kiosks in the United States.

PDNB's merchant processing, prepaid/stored-value cards and ACH services are not part of the deal. And financial terms of the sale, which is expected to close by late third-quarter or early fourth-quarter 2008, were not disclosed.

About 60 PDNB employees are expected to become part of Elan Financial Services, including key executives such as Sandra Hartfield, the president and chief executive of PDNB's Electronic Banking Division. Elan also plans to maintain PDNB's operations centers in Palm Desert, Calif., and Lafayette, La., where PDNB offers complete terminal-management and vault-cash solutions to financial institutions and independent sales organizations.

A changing industry

The sale marks a turning point for both companies — for U.S. Bank, a sign of continued growth; for PDNB, the ending of an era.

For the last three years, U.S. Bank's Elan, founded in 1997, has been on a buying spree to bulk its ATM-services portfolio. In May 2005, U.S. Bank acquired Genpass Technologies, operator of the MoneyPass, MoneyMaker and Money Belt ATM networks. The purchase made Elan the second-largest third-party ATM processor in the United States — second only to Colorado-based First Data Corp., which operates the STAR Network.

Elan operates more than 37,000 ATMs nationwide.

This deal with PDNB, says Gary Staub, Elan's executive vice president for strategic initiatives, offers similar rewards.

"We believe this deal makes us the largest provider of ATM and kiosk vault cash in the United States," Staub said. "We definitely have a solid presence in the ISO business now. The goal is to grow our payments business, and this deal expands our product offering."

For PDNB's Electronic Banking Division, founded in 1994, the sale marks a turning point, one that will take it from being a leader in vault-cash services for independent ATM operators to a provider of targeted services, such as prepaid and stored-value cards — which, among other things, target cash-preferred/underserved consumers.

PDNB is best known for its reverse-cash methodology — part of its TRAKKERSM software program, which automates backroom management, from cash forecasting and ordering to reconciliation and settlement. The system helped to revolutionize cash services for the ATM and kiosk industry.

The reverse-cash service developed by PDNB enabled deployers to provide more advanced financial self-service solutions, such as bill payment, which targets underserved consumers who prefer to use cash to pay bills.

"Palm Desert National Bank has been a pioneer in the ATM industry and we are proud of the part we have played in the ATM industry's growth," Hartfield said. "We have always been committed to providing exceptional products and service."

The sale to U.S. Bank, Hartfield says, will allow Elan to offer more comprehensive services to the industry.

PDNB's cash services helped fuel growth in the late 1990s for newcomers like Burnaby, British Columbia-based TIO Networks Corp., a billpay service provider that has worked closely with PDNB's Electronic Banking Division since its inception.

But Hamed Shahbazi, chairman and chief executive of TIO Networks, says the sale to U.S. Bank is a good and merely supports PDNB's desire to focus on "growth" businesses, like prepaid/stored-value services.

"I think a lot of this comes down to where the ATM industry stands currently, and vault cash not being a growth business," Shahbazi said. "I think it's an excellent event for the industry. Bringing together the two key innovators for vault cash, and eventually the whole back-office of the ATM, at a time when I think the industry needs leadership and innovation more than ever, brings together a lot of leadership to one company. All in all, two thumbs up. We love it."

Sam Ditzion, chief executive of Boston-based Tremont Capital Group, a strategic-planning, merger and acquisition ATM consultancy, says the deal is further example of the industry's consolidation.

"This transaction represents yet another example of the significant and continuing consolidation in each and every sector within the ATM industry," Ditzion said. "Stay tuned, as there will be much more to come."

Ditzion agreed that the deal may reflect PDNB's interest in other business opportunities.

"This is a very significant acquisition, as it clearly solidifies Elan's position as the overwhelmingly dominate player in the nation's non-bank ATM-vault-cash space," he said. "This deal might also be an indication that Palm Desert has reduced its appetite for risk and could reflect a decision to focus more on its core and higher growth businesses.”

U.S. Bank buys Palm Desert ATM business

Minneapolis-based U.S. Bank, a U.S. Bancorp (NYSE:USB) subsidiary, said it will buy the ATM and kiosk terminal management services, cash management and vault cash operations from Palm Desert, Calif.-based Palm Desert National Bank’s electronic banking solutions division.

Financial terms were not disclosed.

The operations manage about $1 billion in vault cash in over n 22,000 ATMs and advanced function kiosks nationwide.

U.S. Bank intends for the business to become a part of its Elan Financial Services business, that provides electronic funds transfer and payments services to banks, credit unions and sales organizations across the nation. Under terms of the deal, around 60 Palm Desert National Bank employees will join the staff at U.S. Bank.

U.S. Bank buys Palm Desert ATM business - Minneapolis / St. Paul Business Journal:

Security - Citbank ATM breach reveals PIN problems

SAN JOSE, Calif. - Hackers broke into Citibank's network of ATMs inside 7-Eleven stores and stole customers' PIN codes, according to recent court filings that revealed a disturbing security hole in the most sensitive part of a banking record. The other part of interest is what about the 2000 supposed Vcom units installed at 7-Eleven? [picture of unit]

Citibank ATM breach reveals PIN security problems - Yahoo! News

he scam netted the alleged identity thieves millions of dollars. But more importantly for consumers, it indicates criminals were able to access PINs — the numeric passwords that theoretically are among the most closely guarded elements of banking transactions — by attacking the back-end computers responsible for approving the cash withdrawals.

The case against three people in U.S. District Court for the Southern District of New York highlights a significant problem.

Hackers are targeting the ATM system's infrastructure, which is increasingly built on Microsoft Corp.'s Windows operating system and allows machines to be remotely diagnosed and repaired over the Internet. And despite industry standards that call for protecting PINs with strong encryption — which means encoding them to cloak them to outsiders — some ATM operators apparently aren't properly doing that. The PINs seem to be leaking while in transit between the automated teller machines and the computers that process the transactions.

"PINs were supposed be sacrosanct — what this shows is that PINs aren't always encrypted like they're supposed to be," said Avivah Litan, a security analyst with the Gartner research firm. "The banks need much better fraud detection systems and much better authentication."

It's unclear how many Citibank customers were affected by the breach, which extended at least from October 2007 to March of this year and was first reported by technology news Web site Wired.com. The bank has nearly 5,700 Citibank-branded ATMs inside 7-Eleven Inc. stores throughout the U.S., but it doesn't own or operate any of them.

That responsibility falls on two companies: Houston-based Cardtronics Inc., which owns all the machines but only operates some, and Brookfield, Wis.-based Fiserv Inc., which operates the others.

A critical issue in the investigation is how the hackers infiltrated the system, a question that still hasn't been answered publicly.

All that's known is they broke into the ATM network through a server at a third-party processor, which means they probably didn't have to touch the ATMs at all to pull off the heist.

They could have gained administrative access to the machines — which means they had carte blanche to grab information — through a flaw in the network or by figuring out those computers' passwords. Or it's possible they installed a piece of malicious software on a banking server to capture unencrypted PINs as they passed through.

What that means for consumers is that their PINs were stolen from machines that showed no signs of tampering they could detect. In previous PIN thefts, thieves generally took steps that might draw notice — sending "phishing" e-mails, for example, or installing false-front keypads or even tiny cameras on ATMs.

Getting the PINs is a key step for identity thieves. It lets criminals encode stolen account information onto blank ATM cards and withdraw piles of cash from compromised accounts.

Don Jackson, director of threat intelligence for SecureWorks Inc., said he has seen an "alarming" spike in the number of attacks on back-end computers for ATM networks over the past year.

"This was fairly large, but I don't think it's anything out of the ordinary — these kinds of scams go on every day," Jackson said. "What makes this case unique is the sheer luck of happening upon these guys and catching them red-handed. But there are a whole lot of other ATM and PIN compromises going on that aren't reported."

The alleged plot is outlined in court papers supporting the prosecution of three people — Yuriy Rakushchynets, Ivan Biltse and Angelina Kitaeva. They were indicted in March on two counts each of conspiracy and fraud. Prosecutors say their activities generated at least $2 million in illegal profits.

Defense lawyers for all three people did not return calls for comment, and it was not clear where they had been living. The main defendant, Rakushchynets, was described as having Michigan and Florida's driver licenses in a February FBI affidavit for an arrest warrant.

Citibank, part of Citigroup Inc., has declined to comment on the technique or how many customers' accounts were compromised. It said it notified affected customers and issued them new debit cards.

"We want our customers to know that, consistent with legal requirements, we do not hold them responsible for fraudulent activity in their accounts," the bank said in a statement.

Cardtronics said it is cooperating with authorities but otherwise declined to comment. Fiserv spokeswoman Melanie Tolley said the intrusion didn't happen on Fiserv's servers.

"Fiserv," she said, "is confident in the integrity and security of our system."

related article on Cardtronics takeover of Vcoms

ATM Market Flat for 2008

New report from FTN for North American ATM market issued today. Duopoly of NCR and Diebold still in place though Wincor is beginning to edge in. New spending is expected to be flat. Interesting is that "operational CRM which refers to ATMs, call centers, and tellers/etc is becoming focus as opposed to "analytical CRM" which are tools that drive customer-centric business decisions. Worth noting to that Service Costs for a full-function ATM average between 8K and 12K a year. Key points follow.

http://www.ftnmidwest.com/

Key Points:

• Our most recent annual ATM deployment survey indicates overall spending for ATM hardware and software in 2008 will be flat to slightly up compared to 2007.

• At this time a catalyst does not exist for financial institutions to increase spending for ATMs.

• The results of our survey indicate national financial institutions will increase spending, but community banks will curtail their budgets for ATMs.

• The primary reasons for spending in 2008 are replacement and deployment of new ATMs.

• The U.S. ATM market remains a duopoly; however, Wincor Nixdorf is receiving greater mention.

• Financial institutions will pilot image-enabled ATMs; however, we believe significant deployment will not occur until 2009 and 2010.

• ATM transactions on average are continuing to decline 3-5% and almost all respondents believe this trend will continue.

• Financial institutions are increasing their leverage because of consolidation.

• There is little difference in hardware between the two primary vendors. The difference is software and service.

Other excerpts:

Check Imaging
Check imaging technology continues to be a topic of discussion. Over the past several years financial institutions have indicated a desire to deploy image-enabled ATMs; however, for numerous reasons extensive deployment has not occurred. It appears that financial institutions remain concerned about the cost of the technology, monies were utilized for other projects, and some question the business case for the technology. Although deployment has been delayed we do believe financial institutions will eventually embrace the technology. We believe significant deployment will occur in 2009 and 2010.

leaders in the industry and NCR goes offshore
DBD and NCR remain the clear market share leaders worldwide, and we believe Wincor gained market share last year. DBD remains the market share leader in the United States, especially in the community financial institution market. In 2007 NCR spun out is Teradata division, thus placing greater focus on its ATM and retail businesses. NCR also decided to outsource its ATM manufacturing in North America, which should result in a lower cost structure for the company.

ATM Transaction Growth Is Slowing
Industry statistics indicated that ATM transactions per month/per machine were down roughly 4% in 2006, this is generally in line with our expectations but was down from 2005. There was a mixed response from the participants in our survey for ATM transaction growth. Some financial institutions are witnessing transaction growth primarily for “on us” transactions. We believe the increase in surcharges has resulted in customers focusing on using their bank’s ATM to mitigate surcharges. This is a slight change from our survey last year when many of the survey respondents indicated they witnessed a decline in ATM transactions. We believe transactions per ATM will once again decline 3-4% in 2007 because the increase in credit and debit card usage and customers’ using ATM’s less frequently

http://www.ftnmidwest.com/

Contact:
John Healy,
Research Associate
Phone (216) 592-1944

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ATMs to dispense pre-paid cards

Better ATM Services out of Arizona signs up Diebold to include new prepaid card dispense to their cash dispensers. ATM manufacturers have been searching for that elusive additional revenue channel for their machines for the last 5 years and think they may have found the one.

Source: Finextra: Diebold ATMs to dispense pre-paid cards

16 October 2007 - 09:18
Diebold ATMs to dispense pre-paid cards
Diebold is to offer its customers technology from Arizona-based Better ATM Services which enables pre-paid gift cards to be dispensed via ATM cash trays.

Diebold is the first manufacturer to be certified to use the patented technology after carrying out testing that demonstrates its machines can dispense pre-paid cards using existing equipment with no add-on devices.

The pre-paid cards are contained on one of three panels on a "card sheet" which has approximately the same dimensions of larger foreign currencies like the Danish Kroner. Better ATM says because ATM cassettes accommodate currency of various sizes, they can also accommodate the card sheet dimensions.

The technology runs on all of Diebold's ix, iSeries and Opteva ATMs. The ATM manufacturer will now offer the technology to new and existing customers.

Charles Ducey, global development and services SVP, Diebold, says: "Better ATM Services' technology breathes new life into legacy ATMs and ushers in a new era of ATM dispensing technology."

Currently, customers can only buy pre-paid gift cards in-store over-the-counter or online. Better ATM says it technology enables a more secure, efficient and profitable way to distribute pre-paid gift cards.

The Arizona-based vendor says it is in discussions with other cash machine manufacturers about incorporating the technology.

Prepaid Card Dispensing ATMs Debut

Interesting solution where ATM utilizes cash dispenser in order to dispense prepaid cards. If so, it's a ready made "additional function" that ATMs could use maybe use to benefit.

Source link

ATMs with prepaid card dispense debut in Phoenix

SCOTTSDALE, Ariz. — Better ATM Services is debuting its patented prepaid-card-dispensing technology at five locations in Greater Phoenix, ushering in a new use for ATMs, the company says. The five locations include Mi Amigo restaurants in Phoenix and Mesa, Ariz., Maycayo's in Scottsdale, and Tavern on Mill in Tempe. The ATM hardware comes from Diebold Inc. Elan Financial Services is running the ATMs.

According to a news release, the technology allows ATMs to be upgraded to dispense prepaid cards through cash trays, rather than requiring the deployer to add a card-dispensing sidecar.

Todd L. Nuttall, Better ATM Services' chief executive, the technology offers retail merchants and financial institutions an opportunity to expand the utility of the ATM without costly upgrades.

"Our technology means ATMs can dispense gift cards, event tickets, transit passes or any other type of prepaid card without investing in additional, costly equipment like sidecars,” Nuttall said. “With the holiday season approaching, we have already received vigorous industry interest.”

The Tower Group estimates that approximately $80 billion was spent on prepaid/gift cards in 2006. Based on Mercator Advisory Group research, that total included the sale of approximately 600 million in-store cards.


Read rest of story

KIOSKS - ATM Kiosks and Music and Photo

Felix Group is now deploying hybrid ATMs in leisure locations across the UK. The units combine cash withdrawal with instant photos, flowers, mobile top ups, ringtones and a digital jukebox.

In June 1967 actor Reg Varney, of On The Buses TV fame, withdrew the first ever cash out of an 'automated teller machine' using a PIN number at a branch of Barclays in Enfield, North London. 40 years on and there's 60,000 ATMs across the UK, used regularly by over 30 million. But apart from the actual number of ATMs on the high street, from the customers point of view not much else has changed about them - until now.

Felix Group plc, a company based in Cheshire, is now deploying a new type of ATM kiosk within high street, licensed and leisure locations across the UK. Called MAX BOX, it is a multi-function two-screen terminal that combines a traditional ATM function with a raft of additional retail services - transforming the humble 'hole in wall' into a standalone 'digital shop'.

With the MAX BOX you can do more than just withdraw cash. You can instantly print digital photos, order flowers for next day delivery, play interactive Sudoku, top up you mobile and download ringtones, games and other mobile content.

The MAX BOX also has a digital jukebox facility that carries a staggering three million digital tracks - including every UK top 40 hit since charts began. In addition the kiosk streams third party advertising, runs sales promotions and can turn any host venue into a free Wi-Fi hotspot.

And through high speed and high capacity broadband the MAX BOX can be quickly updated with new content, products and prices - with additional digital applications easily added to the kiosk at a future date as they are developed. To meet the needs of host venues, Felix also offer three models of the MAX BOX, two of which do not feature the ATM function.

After thorough trials throughout 2006, Felix is now moving forward with its deployment drive and is actively placing kiosks in retail, leisure, licensed and corporate sector venues across the UK. Odeon Cinemas are current trialing non-ATM MAX BOX kiosks, with plans to deploy them in a majority of its multiplexes later this year.

Felix has also partnered with the UK's premier independent ATM deployer Bank Machine. Bank Machine plan to aid the rollout of MAX BOX kiosks into current non-ATM sites, together with a proportion of Bank Machine's existing clients being invited to upgrade. Bank Machine currently operates over 1,400 ATMs in locations including forecourts, convenience stores, shopping centres and cinemas throughout the UK.

Andy Egan, Chief Executive of Felix said: "The launch of the MAX BOX sees vending and ATMs finally growing up, with machines in pubs, airport lounges, shops, staff canteens and other public spaces no longer there just to dispense crisps, coke or cash. Just as 1967 ushered in a new era of consumer convenience by allowing customers to withdraw "emergency" cash from outside a bank for the first time, so we're helping to bring about a new digital retail revolution with the arrival of the MAX BOX."

HEXUS.net - Press Release :: 40th Anniversary Of First Ever Cashpoint Marked By Arrival Of The MAX BOX : Page - 1/1

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KIOSKS -- Multi-function ATMs

No sooner than we peek over into ATM news that these folks in UK announce new multi-function ATM that not only provides cash but offers secondary services such mobile top ups and digital photo. They mention a digital music library with content for download (ringtones, games, wallpaper).

Bank Machine to roll out digital ATM kiosks in UK
Independent ATM operator Bank Machine is to begin distributing a cash machine in the UK that allows consumers to download games and music, print photos and top up mobile phones.

Bank Machine has signed a deal to distribute The Max Box - a free standing, broadband-enabled kiosk developed by British firm Felix Group - in the UK.

As well as providing regular ATMs cash services the units offer mobile top ups and digital photo processing services. The kiosk also features a digital music library and a mobile content download facility which can be used to buy ringtones, games, wallpaper.

The units are expected to be deployed at offsite locations including garage forecourts, shopping centres and retail stores, according to a BBC report. Customers using the Max Box will be expected to pay a fee for non-cash services, although the amount to be charged is not yet known.

source

ATM Trade Associations

Apparently a new trade association for the ATM industry has just been formed. It's the National Association of Automated Teller Machine (ATM) Independent Sales Organizations (ISO's) and Operators (NAAIO). They control about 50% of the ATM market (as opposed to the NCRs of the world). An association for the people who truly operate the ATMs (as opposed to sell ATMs we suppose). The existing trade association is the ATMIA and they do seem to be more interested in mainstream providers like NCR, global growth markets (Africa, China for example) and it's hard on pragmatic level to fault them for that. Still the US Operator market has always been one of those mythical under-utilized and under-equipped markets given the locations that they own/operate. Weblink for new ATM association is http://www.naaio.org

Financial Service -- Hybrid ATM Kiosk machines

TIO with over 1,000 machines in Circle K and Exxon Mobil and running 850,000 transactions a month on its network is going to "branch out" into new hybrid ATM Kiosks. To date, diluting the ATM transaction with other services has proven problematic at best. Once heralded as the next mousetrap, it has gone by the wayside reduced to a yearly press release maybe on the now-old VCom and others. TIO has proven itself very resourceful and smart. It'll be interesting to see how they couple the two.

News

TIO Plans To Start Hybrid ATM-Kiosk Deployments by Start of ‘07

(November 22, 2006) The concept of an ATM that also serves as a kiosk for bill payment and other financial services may be getting closer to reality. TIO Networks Inc., a Burnaby, B.C.-based operator of bill-payment kiosks that serve primarily the underbanked, will begin deploying hybrid ATM-kiosk machines by the start of 2007, says John Lewis, business development executive for the company.

Lewis refuses to say where the new machines will be installed, citing “sensitivity” about their locations. Nor will he be specific about how many of the devices, which are being developed by ATM maker Tranax Technologies Inc., are in the plans. “We expect to see some pretty strong deployments early next year,” he says. TIO had expected to begin operating some 40 hybrid devices this spring in conjunction with ATM deployer Cardtronics Inc. (Digital Transactions News, March 2). The company has had to delay the project as it works through negotiations and waits for current ATM installation contracts at target locations to expire, Lewis says. “Everybody’s making money with their ATMs, so there’s some jockeying going on,” he notes. The company has also switched manufacturers since March, when it was working with Tidel Technologies Inc.

TIO currently drives about 1,000 kiosks hooked up in convenience stores that allow consumers to pay bills by inserting cash into a bill acceptor. TIO’s links to the accounting systems at utilities, telecommunications companies, and other billers—including Cingular Wireless and Qwest Communications—allow users to receive real-time electronic account updates. Merchants housing the machines include Circle K Stores Inc. and ExxonMobil Corp., which deployed 100 kiosks this fall in as many of its On the Run and Tigermarket stores in Texas. TIO also drives around 200 clerk-assisted bill-payment terminals.

Banks historically have shied away from dual-function ATM kiosks, fearing that customers wanting to withdraw from or deposit to accounts would grow frustrated while waiting for other people to complete bill payments or phone-card top-ups. At the same time, the two functions serve two often separate demographic groups. TIO’s kiosks are aimed largely at Hispanics, and draw mostly customers without bank accounts who do business in cash. By contrast, ATM users are generally accountholders at banks. But TIO, which earlier this year changed its name from Info Touch Technologies Corp., hopes the dual functionality could help it introduce its kiosks to users who might not have encountered them otherwise, allowing it to drive up usage faster. TIO charges a flat fee for bill payments, which it shares out to retailer and biller partners.

Currently, TIO is processing 850,000 transactions a month on its network. That volume is growing at a 10% rate quarter-to-quarter, Lewis says. How much of a difference the new hybrid machines might make, he says, is impossible to forecast. “It would be just some wild, crazy guess,” he says.

Phishers exploiting lax ATM security - Gartner

Card-issuing bank is not validating security codes - which are stored on Track 2 of the magnetic stripe and include PIN offsets and Card Verification Value (CVV) codes - while authorising transactions.

Source: Fineextra

Phishers exploiting lax ATM security - Gartner

Published:
02/08/2005 14:43:00 Online identity thieves are exploiting security flaws in ATMs to steal funds from US bank accounts, according to research by Gartner.

Gartner estimates that ATM card fraud cost US banks $2.75 billion in losses and affected an estimated three million consumers in the year ending May 2005.

The latest research suggests that criminals are increasingly obtaining account details and passwords by online phishing and keystroke logging attacks, and then using this information to clone cards and withdraw money from accounts at ATMs.

Avivah Litan, VP and research director at Gartner, says criminals succeed when the card-issuing bank is not validating security codes - which are stored on Track 2 of the magnetic stripe and include PIN offsets and Card Verification Value (CVV) codes - while authorising transactions.

"As many as half of US-based financial institutions are not validating Track 2 security data while authorising ATM and PIN debit transactions. Most of these institutions are unaware that they, or the outsourced ATM transactions processor they rely on, should be doing so," she says.

Litan says criminals are now seeking out customers of banks that are not validating mag-stripe security data during cash withdrawal transactions: "The hackers call these banks 'cashable'. The prime candidates are banks with high cash withdrawal limits."

Gartner says banks have the ability to stop these attacks, but many have not taken the steps needed to prevent them. Banks can modify ATM host systems to check for security data on a card's magnetic strip. This data is unknown to bank customers and therefore cannot be phished. Thieves generally cannot duplicate this security data unless they have insider knowledge of the bank's algorithms and security codes.

"The best defence is a transaction anomaly detection system that compares incoming transactions with profiles of what is expected from the user," says Litan. "Anomalies are flagged for further investigation and/or subsequent interactive authentication of the user, perhaps through a phone call to the user."

Financial Services to Grocers and C-Stores

Convenience and grocery stores are in trouble. Long-standing revenue streams like cigarettes are disappearing in a puff of smoke. Intense pricing pressure from Wal-Mart has flattened margins for the foreseeable future.

An aging store asset portfolio drains available working capital. And the channels have blurred � with Starbucks coffee at Safeway and gasoline at Wal-Mart.

story link

Convenience and grocery executives are desperately looking for new growth drivers. And smartly, they�re looking beyond physical products � you can only stock the shelves with so much stuff � and they�re finding success with services.

The success convenience and grocery chains are having with prepaid wireless has led them to look for other services beyond prepaid and to evaluate the consumers who are purchasing prepaid phones and refill. These chains are finding a plethora of deliverable services which, like prepaid wireless, are targeted toward the unbanked market � people who through choice or necessity manage their finances outside of the traditional banking system. Some call this activity �fringe banking.�

The unbanked population, estimated at over 40 million strong, or over 30 percent of the U.S. population, is made up primarily of teens and young adults, minorities and the working poor. They�re already shopping in convenience and grocery locations, yet these locations have not offered the services they need in order to manage and access their money, forcing them to make special trips to outlets outside of their daily routine.

Services expand
Convenience and grocery stores will now become �banks� for the unbanked. They�ll seek to offer point-of-sale or kiosk-driven services, which will allow unbanked customers to manage their money, pay their bills, purchase and consume products and services, and make their lives a bit simpler.

Prepaid wireless is one service already offered at many of these stores. This market has exploded from $4.5 billion in 2000 to over $23 billion in 2004 � driven by youth, minorities and unbanked customers. Another service, prepaid debit cards, is currently a $600 million market. The Pelorus Group expects it to grow to over $5 billion by 2007. Next Estate Communications reports that 65 percent of prepaid debit users are under the age of 35 years.

Payroll check cashing can also be offered. The Financial Service Centers of America (FiSCA) reports that this $60 billion industry processes over 180 million checks a year, growing 10 percent annually. Walk-up bill payment would be another convenience for the unbanked. Checkfree, the online bill-payment service, reports that 20 percent of American households regularly pay their bills in person.

Offering money transfer service can be lucrative for convenience and grocery stores. Celent expects the global money transfer market to surpass $170 billion in 2006. InterAmerican Bank reports that over 60 percent of foreign-born U.S. Latino adults send money back home regularly.

Retailers look for partners
Overburdened convenience and grocery merchants will look to one-stop full-service distributors to carry the load � bringing in the offers, enabling the transactions and developing the signage and display. For these distributors, banking services would allow them to establish deep relationships with the merchant from a product portfolio and technology perspective and would enable them to cash in for years to come.

Distributors of prepaid telecom have been playing a key role in the U.S. prepaid supply chain � securing the locations, deploying the delivery technology, communicating the offer and enabling the transaction. But margins are getting squeezed; many of the best locations have been secured, competition is fierce and consolidation is rife. The addition of new revenue-driving products and services to the portfolio is crucial.

Offerings that appeal to the same consumer base as prepaid telecom, utilizing the same point-of-sale or kiosk-based delivery technology, make fringe banking, or banks for the unbanked, a natural for distributors to take on and for retailers to migrate toward.

To be successful in this space, distributors will need to:
� develop the relationships with the necessary product and service providers to form the comprehensive bank for the unbanked offering
� educate their retail partners as to the opportunity and the requirements
� create the point-of-sale and/or kiosk delivery network necessary to successfully deliver the offering
� design clear, concise and relevant marketing communications inside and outside the store to drive adoption and demand
� develop a deep and continual understanding of the unbanked consumer, including who they are, what they need, how they want it delivered and how to reach them

Achieving critical mass
This year promises to be the year fringe banking breaks out. Circle K and 7-Eleven are rolling out check-cashing services to all stores. Stored value gift and debit cards are all the rage. Prepaid wireless continues to explode. Kiosks and multiapplication point-of-sale devices make product delivery possible. All of this is happening while the nation sees a continued explosion in Hispanic population, an increase in population living below the poverty level and a reduction in the number of traditional banking outlets.

Retailers, distributors, processors and product and service providers are all taking note, and many will develop a sense of urgency in 2005 to win in this space, to prosper and to survive. Will you?

The author is president of Tefisto Partners, a consultancy focused on the stored value and fringe banking space. He can be contacted at (602) 750-8055 or visit the company website at www.tefistopartners.com.

Crime Maps and ATMs

Chicago crime map | chicagocrime.org Interesting use of Google Maps. Select ATM and give it a minute to update and wala, you have ATM crimes in Chicago.

SEC halts activities of ATM Alliance

The SEC filed an emergency action in United States District Court to halt what it contends is a fraudulent investment scheme by ATM Alliance Corp

23 March 2005

AUSTIN, Texas � The Securities and Exchange Commission has filed an emergency action in United States District Court in Austin to halt what it contends is a fraudulent investment scheme by ATM Alliance Corp. and freeze the company's assets for the benefit of investors.

The SEC charged ATM Alliance, ATM Management Services Corp. and Michael Gilot, who allegedly controls both companies, with securities fraud in connection with an unregistered interstate securities offering involving ATMs.

The complaint alleges that at least $1 million has been raised from several hundred investors nationwide.

The SEC also named Veritas Unlimited, LLC, as a relief defendant, claiming that Veritas received at least $640,000 of investors' funds.

At the request of the SEC, U.S. District Judge Lee Yeakel entered a temporary restraining order halting the offering, freezing the defendants' and relief defendant's assets, and prohibiting the destruction and removal of records.

According to the complaint, the defendants are allegedly soliciting investors through an aggressive marketing campaign in which investors are offered a purported turnkey ATM investment in which they can expect annual returns of between 30 percent and 100 percent. In addition, investors are allegedly told that ATM Alliance has secured highly sought after locations, such as Las Vegas casinos and Citgo convenience stores in which to place ATMs.

The SEC contends that these claims are false and misleading. The complaint further alleges that the defendants are using a fictitious contract to convince investors that ATM Alliance had secured rights to place ATMs at a major Las Vegas casino.

Complete article

Check 21 and Fraud

Experts Fear Check 21 Could Lead to Mass Fraud

By Theresa Carey
October 26, 2004

The implementation of the Check Clearing for the 21st Century Act, aka Check 21, which goes into effect this week, means that check handling and collection should see a drastic increase in speed.

However, security experts believe it could open up some especially foreboding issues in the financial services industry. Unisys Corp. has published a white paper entitled, "Is Your Check 21 Implementation a Fraud Hazard?" that discusses possible hazards and ways to mitigate them. (whitepaper link

Click here to read more about the Check 21 act.
http://www.eweek.com/article2/0,1759,1643728,00.asp

The white paper taps three security experts: Frank W. Abagnale, Ori Eisen and Elazar Katz. Abagnale, the subject of the 2002 Steven Spielberg movie "Catch Me If You Can," is a noted author, lecturer, and consultant on the subjects of forgery, embezzlement and secure documents. He has lectured to and consulted with hundreds of financial institutions, corporations and government agencies around the world for more than 25 years.

Eisen is CEO and president of The 41st Parameter Inc., of Phoenix, which has developed fraud prevention systems for protecting Internet, mail-order and telephone-order merchants against fraud. Eisen served as the Worldwide Fraud Director for American Express, focusing on Internet, MOTO (mail order/telephone order) and counterfeit fraud.

Katz is director of the Active Risk Monitoring Practice at Unisys, specializing in the field of cross-channel risks and the real-time countermeasures required to address large-scale fraud attacks. Katz is currently participating in the Financial Services Technology Consortium's Counter-Phishing task force.

Converting paper checks to digital images has the unintended consequence of significantly reducing the bank's recourse to fraud. The image-processing procedure can result in the destruction of the original paper document, eliminating evidence of fraud, which could make it difficult to prosecute check-fraud crimes in the future.

In addition, many banks plan to make digital check images available to their customers online. Since digital items lend themselves to rapid retrieval, transmittal, and storage, converting to digital images opens the door to large-scale fraud, should these images ever be accessed. If the wave of recent phishing attacks is any indication, such fraud is a real possibility.

Read more here about technologies that will help banks analyze check images for usability and protect against fraud. http://www.eweek.com/article2/0,1759,1676618,00.asp

In the white paper, Eisen describes a check-fraud version of a phishing scam, attributed to gangs from Eastern Europe. The scam begins with a spoof e-mailing campaign intended to trick bank customers to disclose their user name and login passwords. Using the fraudulently-obtained user names and passwords, the fraudsters retrieve customers' monthly statements and check images. Then the fraudsters create high-quality counterfeit checks that are nearly identical in appearance, drawn for an amount that is appropriate for the account, and bearing a scanned signature.

Abagnale brings up the point that fraud detection will be compromised due to the limitations of current check readers. Check 21 legislation requires that the converting financial institution provide warranties that the substitute check includes all the information contained on the original check. Since existing check readers can only scan at resolutions approaching 240 dots per inch while consumer-grade printers and copiers operate at 600 dots per inch or better, existing check readers are unable to distinguish between the appearance of an original item or a copy reproduced on such equipment.

Abagnale believes that banks should encourage customers to use high-security checks with eight or more security features and offer such checks to their customers. He is very concerned about the images available online, given the focus on financial data by scammers.

Katz recommends a multilayer defense approach. One layer would focus on detecting the phishing attack, the next would monitor for suspicious online intelligence-gathering sessions, and the last would focus on detecting the counterfeit check itself. Katz believes this approach would be particularly effective if the various layers could communicate and alert each other of incoming fraud scams.

Eisen concludes that protecting reputation and trust are the most significant reasons for ensuring a safe banking environment. Protecting the e-mail/online channel has hard dollar impact to the cost of doing business.

Unisys is hosting a Web seminar on Check 21 fraud potential on Oct. 28, the day the act goes into effect.

Check out eWEEK.com's Finance Center at http://finance.eweek.com for the latest news, views and analysis on financial applications and services for the enterprise and small businesses.

ATM Self-Service

Nice ATM industry forum on Touchpoints covering some current issues.

Introduction

This is the second of a two-part article where touchpoints� panel of international self-service and ATM industry experts responds to questions sent in by touchpoints members.

The panel members comprise Dominic Hirsch (DH), managing director of Retail Banking Research in London; Wayne Beckley (WB), head of ATMs at Westpac in Australia; Mike Lee (ML), international director of ATMIA in South Africa and Mark Grossi (MG), chief technology offer of NCR, based in the UK.

Do you think Check 21 will drive the move towards check accepting ATMs in the USA?

DH: Yes, but not as much as some people are predicting. The greatest value of Check 21 is not at ATMs, but for back-office processing at branches. While the logic for upgrading ATMs for automated cheque deposit appears strong, this equipment is expensive and in an environment where cheque usage is starting to decline, we will have to see whether large numbers of deployers feel investment in automated cheque deposit is worthwhile.

WB: Yes.

ML: Yes. Physical check depositing at ATMs has done well in some countries like South Africa but there may be some uncertainty for some customers about putting a check into an envelope and feeding it into a machine. Making the process more electronic will increase ease of use and the perception of a secure transaction. Dove Consulting have some well-informed ideas on the impacts of Check 21 on the US market.

MG: Although, it is likely that over the next 5-10 years new payment systems will emerge, the prevalence of checks in the US is so strong that the need will never completely go away in the foreseeable future.

Are convenience ATMs a viable business proposition without surcharging?

DH: Definitely yes. Australia demonstrated that convenience ATMs can be profitable in a relatively low interchange fee environment and others such as Germany (with much higher interchange fees) are now following suit. It is clear that surcharging will not be possible in certain countries for several years � we expect to see growth in convenience ATMs in many of these markets based on an interchange fees model. In some countries it will be banks rather than independent deployers that take advantage of this opportunity.

WB: They can be. However, going toe to toe with third party deployers on this issue when you have a reasonable cardholder base which you probably won�t surcharge makes competing with an ISO almost impossible in the convenience market.

ML: There is no surcharging in South Africa but ATM Solutions have installed an average of an ATM every day since they started pioneering convenience ATMs in the country a few years ago. If average monthly transactions in prime convenience locations are high, the business model works on interchange fees alone without surcharging. The other model that can make non-surcharging ATMs viable, even with lower average monthly volumes, is the merchant cash replenishment model whereby the merchant treats the ATM cash replenishment like a �till� in that he empties the ATM when the business is closed and fills it the next day, like the till. By saving on cash replenishment costs, and thus lowering operational costs, the ATM can be viable when generating lower or fewer fees. My last point is that convenience ATMs in some European countries such as Poland, which do not have surcharging, use ATM advertising quite successfully, such as MacDonald�s� vouchers printed on the back of receipts. The additional ATM advertising revenue supplements the interchange-only revenue and enables the convenience ATM to be viable without surcharging.

MG: It depends on the location of the ATM. In locations where transaction volumes are relatively high, the interchange alone model is sufficient to sustain a viable business model. In more marginal locations, where transaction volumes are lower, it may be that deployers look to new functionality such as mobile phone top-up, to drive incremental fees.

It�s interesting to note that in the UK, a number of deals have recently been announced where major banks are selling their off-premise estates to ISOs � effectively outsourcing this segment of their ATM network.

Will biometrics be a justifiable technology development in the next 5 years?

DH: Biometrics is highly unlikely to be widely used at ATMs in the next five years. Agreeing global standards in this area is extremely difficult, and even if consensus could be reached the timescales for implementation will be long. EMV will not be rolled-out on a worldwide basis for at least ten years � it would be reasonable to assume that the timescales for biometrics at ATMs are significantly longer than this.

WB: It may well be depending on how the fraud picture eventuates. Biometrics may get a push if it enhances the opportunity for disabled persons to access accounts in an easier manner.

ML: As a result of more governments, such as in the UK, planning to use biometrics for public documents for citizens like passports, identity documents and drivers� licences, large biometric databases will be created. The greater use of the technology will inevitably bring down the cost of producing and operating it. This will make the biometric alternative to PIN more attractive.

In addition, customers are also citizens. If citizens are accustomed to biometrics, then they will not have any problem using biometrics for identifying themselves in other ways, such as a customer.

Skimming worldwide has created a big security issue for magnetic stripe and PIN compromises have added to that threat. I see biometrics getting stronger in our industry well within the 5 year window you mention.

MG: In the short term implementation of biometric recognition at ATMs is likely to be in niche geographies only where biometrics are already an accepted part of life. The current move to EMV compliance requires a substantial investment by banks, so clearly further investment would require a very compelling justification, for instance a future rise in card fraud, before we see any mass deployment plans. There are also a number of social and political sensitivities that need to be addressed before mass rollouts are likely and it maybe that government introduction of biometric passports and / or ID cards would overcome this resistance without damaging the reputations of the banks.

What does the panel think will be the next �killer application� through self-service?

DH: Automated deposit. RBR is currently conducting a global research study into automated deposit at ATMs and it is clear that this technology offers benefits to deployers and end users. Although the level and timing of take-up will vary by country, we believe that deposit automation will become the most important ATM application since cash dispensing.

WB: This is very hard to predict as it appears there is no �killer application� at the moment. There are lots of little things happening which still tend to be market-specific, e.g. mobile phone top-up in Spain or bill payments in other markets.

ML: In the medium-term, air time top ups at ATMs. Ticketing and bill payments seem to have a big potential to be exported from countries where they are doing very well. I still think ATM advertising has a future.

MG: This depends on whether we think of self-service only in terms of an ATM. Cash dispense is the killer app for self-service cash delivery but equally, ticketing is the killer app for self-service check-in. I believe that functionality that supports branch automation, for example deposit and teller assist, will form a set of killer apps but it may not be an ATM as we know it today.

touchpoints - Touchpoints industry forum - Part 2

ATM Wraps

Reviving the ATM wrap by Ann All

Reviving the ATM wrap
by Ann All, editor 10 Jun, 2004

One of the challenges of ATM advertising was establishing a meaningful rate card for agencies, which typically measure ad campaigns by how many people view them.

Television, radio and print media all have established systems for gauging the size of their audiences. While most deployers tried to sell ad agencies on a combination of transaction volumes and foot traffic at ATM sites, some agencies questioned whether passersby really noticed ATMs.

There seems little doubt, however, of the high visibility of wraps, sheets of vinyl applied to ATM toppers, the machines themselves or even kiosks or enclosures.

ATM owners appear to be taking a new look at wraps -- not as a revenue generator but as a way of increasing exposure and perhaps attracting people to the machines.

"You take a self-service machine which has had a limited ability to be used as a branding vehicle, and you make it a real attention getter," said Al Tiley, chief executive of Companion Systems, which has installed wraps for a number of clients including JP Morgan Chase and Visa International.

Tiley said that virtually any piece of photo-ready art work can be turned into a durable wrap for a cost ranging from "a few hundred dollars" for a topper to $3,000 for an entire drive-up ATM enclosure. While the price may seem high at the upper end of the range, Tiley said it's less expensive than hiring painters to produce traditional versions of comparable graphics.

The wraps are "quite durable" and should last for several years, though they are susceptible to cuts made with sharp objects, Tiley said. "That will end up looking like paint that's been scratched."

As evidence of wraps' resilience, he noted some of the other punishing environments in which they are used -- for example, on city buses.

Wraps also provide a consistency that can't be duplicated by using painters, said Steve Korte, an accessory product manager for Diebold Direct, the manufacturer's marketing group, which has worked with Companion on several projects involving wraps.

For Penn State Federal Credit Union, Companion produced an enclosure covered from top to bottom in a wrap that makes the kiosk resemble a bucolic field of flowers -- despite the fact that it sits in the middle of a parking lot. Paula Walter, the FI's administrator of ATM operations, said the theme was chosen because of the machine's location, at a complex that frequently hosts agricultural events.

Companion created whimsical wraps for Chase to use at co-branded ATMs located at the Universal Studios theme parks. "We got quite a kick out of" a Chase/Universal Studios wrap covered with an in-your-face Woody Woodpecker, Tiley said.

< _IMAGE _ >
A wrap makes this exterior ATM enclosure, seen here in the warehouse before shipping, resemble a bucolic field of flowers -- despite its eventual location in a parking lot.

For Visa International, wraps used on ATM enclosures during the Olympics featured images of athletes.

Brian Hartline, president and chief executive of Nova Savings Bank, said the FI hoped to help instill customer loyalty with two ATM wraps it rolled out late last year. A wrap on an ATM at Villanova University features college colors and the Wildcat mascot, while another at a busy exterior machine near Nova's Philadelphia headquarters looks like the Philly skyline.

Hartline said the wraps were worth their cost of $500 to $700 each.

"I think they give us a little edge," he said. "We wanted to catch the attention of potential users and create a loyalty factor with Villanova students and with Philadelphians. We're a local bank, and we like to emphasize that in our marketing."

Hartline said Nova will consider using more wraps in heavily trafficked areas that are conducive to loyalty branding. "Campuses of any sort are a perfect example."

While one-of-a-kind images are eye catching, FIs can also leverage logos and images they use elsewhere, said Diebold Direct's Korte.

"Many financial institutions are fairly well invested in graphic images they use in their marketing campaigns. Wraps give them the ability to integrate those graphics and make their ATMs part of their campaigns," he said.

FIs, known for their conservative marketing bent, have not widely embraced wraps. For that reason, Korte said, they will garner more attention for the FIs that use them.

"So many financial institutions view still view their ATMs as gray boxes which bear no resemblance to the rest of their identity," he said. "So those using wraps are going to stand out that much more."

Reviving the ATM wrap | ATM Marketplace News (Mobile Version)

Transaction Protocols

With the XFS (eXtensions for Financial Services) software standard, ATM deployers gained the ability to offer common applications across different makes of machines

Story link

(Not) lost in translation
by Ann All, editor 11 Jan, 2004

With the XFS (eXtensions for Financial Services) software standard, ATM deployers gained the ability to offer common applications across different makes of machines.

Yet channel integration remains largely out of reach for ATM owners. They can't easily offer common services across different delivery channels because ATMs, teller stations, voice response systems, point-of-sale terminals and other devices "speak" a different language when communicating with hosts for transaction authorization.

ATM message protocols such as NCR's NDC and Diebold's 911/912 are based on ISO 85/83, a 20-year-old standard that industry observers agree looks pretty creaky in the age of Internet standards like XML.

Lost in translation

"A teller station can't run 912," said Kevin Carroll, Concord EFS' director of ATM services. "A deposit message at the teller doesn't look like a deposit message at the ATM."

Not only that, but widespread modification of the proprietary NDC and 911/912 has "added a lot of pain" to the development process for new transactions, said Rick DuVall, a senior product manager at ACI Worldwide.

"If you own your own specification (like NCR and Diebold), you can modify it any time you like. And with emulation, you have varying amounts of cooperation among the vendors. So what we've gotten in the past is a lot of unique exceptions," DuVall said.

Legacy protocols like NDC and 912 have "hit the wall" in terms of future functionality, said Stephen Risto, director of NCR's APTRA Software Center of Expertise. "ATM deployers want more commonality with other financial channels in the enterprise."

Teaming on translation

A number of vendors -- including ACI, NCR, Diebold, Fujitsu, Wincor Nixdorf , Concord EFS and Mosaic Software -- are working to give financial services a common "language" by advancing an XML-based messaging standard called the Interactive Financial eXchange (IFX).

These vendors and such heavy-hitting financial institutions as Bank of America, Citibank, Wells Fargo and Wachovia are members of the IFX Forum. The forum, which was formed in 1997, has five working groups including one devoted to ATM and point-of-sale technologies. The other groups include electronic bill presentment and payment, business banking, credit application processing and Web services.

The ATM/POS group, chaired by Bank of America, ACI and NCR, began meeting in early 2002. It produced its first standard, 1.4, in less than a year. The standard supports the "big four" ATM transactions -- cash withdrawals, transfers, deposits and account inquiries -- as well as a number of more advanced functions such as cash recycling and dispensing of non-cash media.

Risto credits 1.4's speedy production to earlier multi-vendor cooperation on the XFS standard. "Because of XFS, we had the routine of working toward a common standard down," he said.

Part of the working group's task was familiarizing other forum members -- who had Web expertise but no previous EFT experience -- with the arcane requirements of the ATM world.

"They had no concept of things like downloading and sharing DES keys, status/health messages and transaction reversals," said ACI's DuVall. "If a PC crashes, the application doesn't care. In our world, we care -- a lot."

Mike Bengtson, Mosaic's vice president of product strategy, said an education process was required on both sides. "You couldn't just read through the specification and pick it up. There was definitely a learning curve for some of the EFT veterans who were used to ISO 85/83 being considered state-of-the-art."

What's Important

ATM message protocols such as NCR's NDC and Diebold's 911/912 are based on a 20-year-old standard called ISO 85/83.

A number of ATM vendors and deployers want to update ATM messaging by introducing an XML-based standard called IFX (Interactive Financial eXchange)

One of the key advantages of IFX is its ability to make ATMs and other devices such as teller stations and POS terminals speak the same language.

The adoption of IFX will likely to make it easier for the EFT field to attract young talent, Bengtson said.

"Attracting bright young engineers was a real challenge for the EFT industry, especially in the go-go '90s when everyone was interested in the Internet. It was hard to find college graduates who were willing to work with 1970s technology," he said. "You're always going to have a learning curve with ATM, but IFX will give you the ability to use off-the-shelf development tools for ATM applications."

Mosaic is adding IFX support to its eSocket line of products, which are designed to help third-party providers integrate their services with its Postilion software platform, Bengtson said.

Later this month, forum members are expected to review and ratify Version 1.5, which adds transactions such as money order purchases, person-to-person payment and prepaid phone recharges to the standard. It's less "plain vanilla" than 1.4, said Concord's Carroll. "It has more of the functionality that our customers have been asking us for."

IFX is far more flexible than NDC and 911/912, which are "single monolithic pieces of code," NCR's Risto said. "With IFX, you're taking states-and-screens away and replacing each piece with an inherent application. Each function is broken out and handled separately."

IFX will facilitate a move away from the traditional states-and-screens environment to client server architecture, a move long advocated by NCR, Risto added.

"You're going to hear different vendors tell completely different stories about the preparedness of their architectures. With APTRA Edge (NCR's multi-vendor, XFS-based software), functions such as the inherent application, transaction authorization and error handling and recovery are already separated, even when you use NDC for messaging," he said. "Switching to IFX will simply be a matter of removing the NDC proxy and adding IFX."

Too many cooks?

Also this month, IFX Forum members will review an ATM/POS implementation guide, designed to help business and technical personnel better understand how to use IFX to create transactions. The guide is necessary, Bengtson said, because the specification is so "exhaustive," offering multiple possible "recipes" for every transaction, even a simple cash withdrawal.

"If the IFX environment gets away from us, it could become geometric," DuVall said. "If we're not careful, we could end up with a Mosaic protocol, an eFunds protocol and an ACI protocol. We want the implementation guide to be a kind of 'cookbook' that will be thought of as the de facto way of doing things."

Although there is less room for proprietary interpretation with IFX than with ISO 85/83, possible ambiguities in the specification could hamper the creation of new applications, agreed Martin Macmillan, chief executive of Level Four.

"Right now you have basically two different protocols (NDC and 911/912) and everyone emulating them," he said. "If all of the vendors decided to create their own IFX protocols rather than using a single standard, you could end up with a potential bottleneck in development."

Level Four is adding an IFX module to its suite of development and testing software in 2004's first quarter because of customer demand, Macmillan said. "No one wants to invest in a platform that's not forward compatible. All of our RFIs and RFPs from the States now include IFX."

Macmillan said testing software such as Level Four's ATM Channel Development Suite becomes more important as deployers introduce a number of new technologies, including Windows operating systems, TCP/IP networking, Triple DES encryption, IFX and more.

"The whole pace of the industry is really picking up," he said. "You can't change everything at once and just sit there with your fingers crossed wondering if it's all going to work."

Warp speed, Scotty

Most industry observers believe that widespread adoption of IFX may occur within five years or so, a pace that seems practically warp speed for the usually slow-moving financial services industry.

Market forces seem to be working in IFX's favor. While a Windows-based ATM operating system and updates of both switch and ATM software will be required, NCR's Risto said many deployers are already making those changes in conjunction with their Triple DES upgrades.

The move to IFX requires a smaller leap of technology than the switch from an OS/2 to Windows operating system, Risto said. "Once you've made the move to Windows, IFX is going to be a far smoother and more intuitive move."

DuVall said ACI is already is working with an unnamed financial institution on a "live" IFX implementation involving PIN pads at teller stations used to help reduce internal fraud. "It's really happening; it's not just smoke and mirrors," he said.

In 2004's first quarter, ACI and NCR are partnering on the first live ATM implementation, at Nebraska's First National Bank of Omaha. According to DuVall, ACI expects another customer, a large financial institution, to introduce ATMs with IFX in the second or third quarter.

The success of these early projects will help spur adoption of IFX, Risto said. "I think a number of banks are leaning forward and starting to take notes. I expect to see serious movement toward IFX in 2005."

Mosaic's Bengtson expects adoption to be driven at least partly by analysts' increased scrutiny of IT departments at many financial institutions.

"There have been a lot of efficiencies gained in the past few years in the computing world, but the financial industry hasn't caught up to them," he said. "I think you'll see some analysts beginning to ask why these publicly-traded companies are running six different processing platforms and paying so much money to support them. Using IFX to get your channels speaking roughly the same language is part of the long-term solution."

Related topics would be things such as 3DES and the Patriot Act.

Year in ATM World

Nice wrap by Ann All on 2003 and ATMs

story link

2003: The year in ATMs
by Ann All, editor 23 Dec, 2003

Looking back at ATMmarketplace's annual Year in Review for 2002, some of the biggest stories included a worldwide escalation of card fraud, new regulatory requirements such as Triple DES, a slow uptake of advanced functionality at the ATM and continued consolidation in several sectors of the industry.

Oddly -- or not, given the ATM industry's reputation for moving at less than lightning speed -- the year's biggest stories didn't change much in 2003. In many ways, it was a virtual replay of '02.

Skimming scams

Card fraud continued to bedevil the ATM business. Incidents of skimming, in which thieves install devices at the ATM to harvest card data -- usually in combination with pinhole cameras that capture PINs -- were reported around the globe.

Canada was one of the hardest hit countries in '03. Despite the late December 2002 arrest of five Russians who orchestrated a sophisticated $1.2 million (U.S. $790,460) skimming scam in the Vancouver area, Canada continued to experience skimming losses in 2003. In September, Canadian police arrested nine men they said were stealing card information and PINs at drive-through ATMs.

Illegal withdrawals were made from some 200 accounts during a $700,000 Russian skimming spree. Moscow police in April arrested Alexei Menshov, a student at the Moscow Automobile Institute. Menshov fingered two accomplices, Yury Kazakov, the holder of a Ph.D. in technical science, and Sergei Levitsky, an economics graduate.

Banks in the United Arab Emirates slashed daily withdrawal limits at ATMs after skimming incidents were discovered in late May. Though details were sketchy, a report in the Arab Times estimated losses as high as 50 million dirhams ($13.7 million U.S.) The UAE's Central Bank in June recommended that the 985 ATMs in the UAE be replaced or upgraded with smart card readers.

In Taiwan, police in October arrested Soong Jen-chao and Chou Shi-hsuan, two men who reportedly headed up a skimming gang responsible for losses of NT$30 million (U.S. $884,173) from 257 accounts. Following the arrests, Minister of Finance Lin Chuan asked banks to remove card-swipe entry systems on doors to lobbies, which had been targeted by the gang. He then asked banks to convert the more than 600 million magnetic stripe cards currently in circulation to chip by June of 2004, a project which experts estimate will cost about NT$15 billion (U.S. $430 million)

Legislation in the loop

Reports of skimming came in from across the United States, including Chicago, Boston and New York. In Manhattan, three men in December were indicted in connection with an incident in which they installed an ATM equipped with a skimming device in a deli, then stole more than $200,000 in a single day after using the data to create bogus cards.

Inspired by that incident, Sen. Charles Schumer (D-N.Y.), a member of the Senate Banking Committee, announced his intent to introduce legislation requiring background checks and federal licensing of independent ATM operators.

Three California Assembly members introduced similar legislation in their state following the airing of a "Dateline NBC" report that featured one of 2002's biggest skimming cases, in which thieves purchased more than 50 ATMs and used them to steal more than $3.5 million after compromising some 21,000 accounts. Ironically, U.S. Secret Service agents and Wixom, Mich., police on Dec. 4 arrested Iljmija Frljuckica, an Eastern European man they say was the leader of that gang.

The industry has already felt the impact of the case referenced by "Dateline." EFT networks increased their oversight of member financial institutions which sponsor ISOs into networks, asking them to increase their due diligence by obtaining detailed financials, among other information, from their ISOs.

At least one result of skimming incidents seems to be a growing mistrust between financial institutions and their customers. The Los Angeles Times reported that consumer complaints to the Office of the Comptroller of the Currency (OCC) about how banks handle unauthorized ATM transfers grew from 251 in 1999 to 711 in 2002.

"The actual number of problems is certainly far higher," OCC spokesman Bob Garsson told the Times, noting that few bank customers are aware of the agency's consumer complaint division.

According to the Times, the OCC advised banks in late 2001 that it was concerned that some were rejecting claims of ATM fraud because customers could not provide evidence that their debit cards or PINs had been "misappropriated."

Triple DES trials

Triple DES continued to be a major issue for U.S. ATM deployers even as deadlines for compliance were modified. As some deployers began upgrading their machines to meet MasterCard's April 1, 2005 deadline, several networks including Pulse and Star obtained variances from MasterCard on behalf of their members that extended the deadlines to Dec. 31, 2005.

Visa in early summer finally weighed in with a date, posting a notice on its Web site stating that: "Effective July 1, 2007, all ATMs should support TDES."

Alan Falconer, senior vice president of Paragon Data Services, an information technology and management consulting firm that is working with Pulse, Pacific Capital Bancorp and several other clients on Triple DES compliance and other issues, said it's not surprising that Visa would "soft pedal" at this point. "Everybody's already three-quarters of the way down the road," he said.

At the same time, Falconer said, Visa's extended date may be a "viable marketing ploy" for early-model ATMs, which some deployers may hesitate to upgrade or replace until a better business case comes along.

Visa also announced a new requirement: EPPs (Encrypting PIN pads) on all new ATMs must be evaluated by a Visa-recognized laboratory and approved by Visa, beginning in July of 2004.
While most in the industry lauded Visa's move to provide testing, some ATM manufacturers expressed concern that only three labs -- in California, Germany and the Netherlands -- had been approved. Visa was reportedly evaluating several other labs, including facilities in Canada, Singapore and Australia.

Several companies, including The ATM Exchange, Pi Systems, WRG Services and GTI, introduced products designed to make such popular ATM models as Triton's 9500, NCR's 5000 series and Diebold's 1060 and early 1000 series capable of running Triple DES. The companies said deployers were looking for alternatives after vendors announced they wouldn't provide upgrades for these early ATM models.

Feeling the functionality

Much of the activity to offer advanced functionality, as in 2002, occurred at non-bank ATMs. A number of ISOs offered CashWorks check cashing -- which involves approving a check cashing transaction at a point-of-sale terminal and dispensing the funds from an ATM. Ken Rees, president of CashWorks, said in August that the service was being offered at more than 500 retail locations.

Tidel, Triton, Tranax Technologies and NexTran all have signed agreements to offer CashWorks. The majority of "live" CashWorks ATMs in 2003 were Tidels, Rees said.

Ron Ferguson, executive vice president of transaction provider Euronet Worldwide, said PaySpot prepaid phone top-ups were offered on about 50 Triton ATMs in August, with more transaction processors and ATM manufacturers certifying the service. Euronet had signed contracts with 25 ISOs, with some 25,000 machines between them, to offer PaySpot top-ups.

Prepaid phone top-ups provided by bcgi were available on another 250 ATMs in August. The company provided the service for E*Trade Access and for deployers participating in NCR's iATMglobal program. James Anderson, bcgi's vice president of Payment Services, predicted in October that prepaid top-ups would begin to really take off when financial institutions began offering them.

Prepaid customers are more likely to seek out services if they know they can find them at "any Bank X" ATM, Anderson said. In contrast, few if any ISOs have the necessary scope of coverage with a single retail chain. He said bcgi's deal to integrate its ATM Recharge interface with ACI Worldwide's BASE24 software will bring more banks on board.

Eight deployers, including one financial institution, offered iATMglobal services in August, according to Robb Straub, head of iATMglobal. In addition to prepaid phone top-ups through bcgi, the services included prepaid long distance through Radiant Technologies and MCI WorldCom; online movie tickets through movietickets.com; online flower sales through Flowers USA; and sales of CDs, gift certificates and other products through Sony Music.

Straub expected to sign contracts with two more ATM deployers, including another bank, by the end of the summer.

Retail chain 7-Eleven expanded its network of Vcom kiosks to 1,000 machines and added several new transactions, including online shopping from companies including 1-800-flowers.com; eBags.com; TopWeb Buys.com, which sells books and video games; and Universal Tickets Inc., which sells golf outing packages.

Not quiet on the bank front

All was not quiet on the advanced functionality front when it came to financial institutions. By 2003's third quarter, FleetBoston Financial offered bill payment on 75 ATMs in New York and Boston. Jim D'Aprile, Fleet's vice president of Self-Service/ATM Banking, said Fleet planned to eventually expand the service to more of its 3,600 ATMs, after it got a better sense of customer usage.

Facilitated by NCR's APTRA Edge software, Fleet ran the application on both NCR and Diebold machines. The use of XFS-based software -- such as APTRA, Diebold's Agilis, Wincor Nixdorf's ProTopas and Fujitsu's Prism -- combined with an increased migration from the OS/2 operating system to Microsoft's Windows, will make it easier for deployers to offer non-traditional ATM transactions.

Some financial institutions appeared interested in adopting check imaging technologies at ATMs, particularly after the October passage of Check 21, a piece of legislation that will allow "substitute" checks created with digital images to be substituted for the real thing.

Several institutions conducted imaging pilots. Perhaps most ambitious, Bank One in 2003's first quarter linked a handful of ATMs equipped with imaging technology to a back-office check processing system.

Bank One cited gains in efficiency, as back office workers could use images to begin processing checks rather than waiting for them to be gathered from ATMs. They also used the images to begin reviewing checks for fraud indicators, such as unusually large deposits or suspicious accounts.

Nova Savings Bank in August installed a Fujitsu ATM on the Villanova University campus that offers automated dispensation of basketball tickets to students. Using a software application called Prism 1:1, Nova also plans to allow students to create personalized banking transactions, selecting preferred withdrawal amounts, paper or e-mail receipts and other options.

Brian Hartline, the bank's president and chief executive, said advanced ATM technology offered an effective way for his $330 million financial institution to compete with bigger banks.

What's your sign? For sale

Merger and acquisition activity, fairly heated in 2002, got even hotter in 2003. With organic growth on the decline, a number of ISO-managed ATM portfolios changed hands. One of 2002's biggest buyers, eFunds, abstained from any deals this year. Yet several others -- notably Cardtronics, E*Trade and Innovus -- opened their checkbooks.

E*Trade purchased 4,000 ATM contracts from XtraCash ATM in February when that once-dominant ISO dissolved its business.

Cardtronics, an acquirer in 2001 and 2002, also purchased some 900 ATM contracts from XtraCash in February. Cardtronics' buying spree also included 22 shopping mall locations from CenterCourt Cash, 1,100 sites from National Bank Equipment and -- its largest acquisition yet -- 1,704 ATMs and related contracts from American Express.

Innovus purchased the businesses of Momentum Cash Systems in January and Heartland Cash Network earlier this month. Innovus also entered into a partnership with a major Northeastern bank to take over some of its contracts in shopping malls across the country.

< _IMAGE _ >

< _IMAGE _ >The best decision ATMIA made was to initiate the formation of the Global ATM Security Alliance. GASA has already made an impact by producing international cardholder security tips, as well as draft best practice manuals for ATM physical and transactional security and PIN and encryption security.< _IMAGE _ >

-- Mike Lee,
International Director,
ATM Industry Association

Internet bank NetBank in October purchased FTI in a deal that both parties said would help NetBank win more commercial bank accounts.

"Tommy (Glenn, FTI's CEO) can provide one of the most attractive components for a small business owner, an ATM. Along with that, they can get credit and debit card acceptance, pre-paid cards and any number of other neat things," said Douglas Freeman, NetBank's chairman and chief executive. "We'll be able to offer them anything they can get through their local bank or anything they can dream up, within reason."

International acquisition activity

ISO merger activity was not confined to the U.S. UK independent Cardpoint purchased the ATM businesses of two rivals, Green Machine and Securicor, paying a combined total of some �11.2 million, with possible future payments of up to �5 million. Cardpoint in 2002 raised �2.5 million through an institutional placement and also listed its shares on the UK's Alternative Investment Market (AIM), which allowed it to use a �3 million debt facility from its lender, Halifax Bank of Scotland.

In Australia, Bank of Queensland (BOQ) in June purchased the remaining 90 percent stake in independent ATM Solutions Australasia for $16.2 million (U.S. $11.9 million). According to an Asian Banker report, the deal will allow BOQ to better compete with Australia's big four banks -- Commonwealth Bank of Australia, Westpac, ANZ and National Australia Bank -- which dominate the country's ATM landscape.

Cashcard, the country's largest ATM deployer with some 5,000 machines, in June inked a deal to buy rival Direct Cash for $30 million (U.S. $22.1 million). Cashcard in late 2002 paid $32 million (U.S. $23.6 million) for another deployer, Electronic Banking Systems. Earlier this month, Cashcard itself became an acquisition target for global payments company First Data.

Most dramatic deal

Without a doubt, the most dramatic deal of 2003 was First Data's bid to buy rival transaction processor Concord EFS. Shortly after First Data announced its intentions in April, the proposed acquisition earned the attention of the Department of Justice, which expressed concern over the merged company's share of the PIN-based debit market, which industry analysts estimated at about 70 percent.

Though First Data had expected the deal to close in the second half of 2003, the DOJ had other ideas. In October, the DOJ sued to block the merger, contending the deal would substantially reduce competition in the EFT industry. Of particular concern was the possible combination of Star, owned by Concord, and First Data's 64 percent stake in NYCE.

"If allowed to proceed, this merger of two of the three largest PIN debit networks will lead to higher prices to merchants, forcing them to pass on those price increases to many consumers throughout the United States in the form of higher prices for general merchandise," said R. Hewitt Pate, assistant attorney general for the Justice Department's antitrust division, in a statement.

Eight states and the District of Columbia joined the DOJ in the suit.

U.S. District Court Judge Rosemary Collyer in late October fast tracked the case, ruling that a hearing on the government's motion for a preliminary injunction would be consolidated with a trial on the merits. According to published reports, the DOJ on Dec. 11 -- just three days before the trial was to begin -- rejected First Data's offer to divest part of its stake in NYCE.

First Data and Concord on Dec. 15 announced a deal that would allow the merger to move forward. A key part of the proposed agreement called for First Data to totally divest its 64 percent ownership of NYCE. First Data agreed to hold NYCE as a separate unit pending the divestiture.

The financial terms also changed. The two companies agreed to a new, slightly lower value of approximately $6.9 billion, based on First Data's closing price of $39.30 on Dec. 12. The revised agreement also extended the original Jan. 31, 2004 end date to April 30, 2004 to allow sufficient time to obtain the necessary shareholder approvals of the revised terms.

With the First Data/Concord deal back on track, it's bound to become one of the biggest stories of 2004. What else does the future hold? Stay tuned.

More decisions

When ATMmarketplace asked industry movers and shakers to share their best decisions of 2003, we got some interesting responses:

eFunds Corporation: "Hands-down the best decision I made in 2003 was structuring the
organization to create greater focus on key retailers and financial institutions. Through hiring direct reports with expertise in both the banking and ISO industries, as well as putting key sales people in place, we built a foundation for a new organization: an ATM management company." Kevin Reager, SVP and Division Executive, ATM Division

Hanco ATM Systems: "The best decision that I made in 2003 was both personal and professional -- deciding to join the (Hanco) earlier in the year. Having worked in sales throughout my career, I was privileged to join the Hanco team and experience the fascinating and challenging ATM market which has gripped the UK." Rob Grouse, managing director

Innobeta: "My best business decision in 2003 was to launch our Master Distributor program. When you're a young company like we are, the temptation is to develop as many channels as possible. But the cost of maintaining those channels is pretty substantial. We decided to cut back and help develop our core strategic partners who could grow with us. Our key strategic partners have helped us move product into all major markets. We reduced distribution costs and increased our market penetration." Eric Park, chief financial officer

ATM Solutions Australasia: "To create a good business you need to make a profit every day, have happy customers and have contented staff." Tim Wildash, managing director

ATM Growth in Europe

RBR report: Non-bank ATMs fuel European growth in '02

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RBR report: Non-bank ATMs fuel European growth in '02
31 Dec, 2003

LONDON � The UK's installed ATM base grew by 4,202 machines, or 11 percent, to 40,795 in 2002, making it Europe's third-largest ATM market and the fastest-growing.

ATM growth in the overall European ATM market slowed slightly in 2002, to 6 percent, according to the Retail Banking Research (RBR) report "ATMs and Cash Dispensers Europe 2003." Europe now has 283,590 ATMs.

The report provides the ATM industry with a detailed and reliable country-by-country analysis of 18 European countries, comprising more than 700 pages and 400 tables and graphs.

Fueled by an increase in non-bank ATMs, the UK contributed one-quarter of the region's growth for the year and is currently the only country in Europe growing at more than 10 percent a year.

Germany, since 1993 the region's largest ATM market, has 50,487 machines. Spain is in second place with 49,925 installations. Together, the "big five" countries -- Germany, Spain, UK, France and Italy -- account for 77 percent of the region's ATMs, according to RBR's report.

Greece, Italy, Norway and Ireland also have relatively high annual growth rates of between 8 percent and 10 percent. In Norway, the entry of local company EDT (Elektroniske Distribusjons Tjenester) as an independent ATM deployer sent the growth rate soaring from below 2 percent in 2001 to 9 percent in 2002.

Excluding Norway, the Nordic countries currently show the slowest growth in western Europe.
Denmark and Sweden both grew by less than 0.5 in 2002, and Finland's installed base actually shrunk by 1 percent, according to the report.

Over the last five years, the share of machines installed away from bank branches has almost doubled, from 12 percent in 1997 to 23 percent in 2002. More than half of the ATMs installed in the UK and Finland are off-site, with 53 percent and 51 percent respectively.

In contrast, there are only 27 off-site ATMs in the whole of Belgium, making it the country with the lowest off-site proportion in western Europe.

NCR is still Europe's market leader, with its machines accounting for 48 percent of the western European installed base.

German manufacturer Wincor Nixdorf is closing the gap on Diebold, which is currently the region's second largest supplier of ATMs. Both manufacturers have a market share of just over 20 percent.

According to the report, Wincor Nixdorf increased its share to 20 percent of installations, up from 19 percent in 2001. Diebold has a market share of 21 percent. After strengthening its position in Europe in 2000 through the acquisition of Getronics, Bull and the latter's Cable Print subsidiary, Diebold lost ground in 2001 and 2002.

A human face for ATM customer services

With an innovative take on personalised customer service, NCR has prototyped and exhibited its latest ATM (automated teller machine) concept: an on-screen, individually personalised 'avatar' (a cartoon-like character) to guide bank customers through transactions.

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Speaking for NCR Financial Solutions, chief technology officer Mark Grossi told The Wise Marketer that the avatar-driven ATM machines are being actively marketed, having demonstrated the technology using a character called 'Maddy' at a recent Royal Bank of Canada (RBC) e-Business Symposium in Toronto. This article is copyright 2003 TheWiseMarketer.com.

The concept, which was demonstrated using NCR's multi-function Personas 78 ATM, offers a banking service which, even after the novelty wears off, can provide a differentiating factor between competing banks, depending on the features and services made available through the machine.

It also provides an interactive branding channel that actively engages customers (and even potential customers from other banks who have simply stopped to use the convenient ATM), and can pass on brand promises both visually and verbally. And, by linking the avatar with a bank's CRM system, it can also become a tool for personalisation and targeted one-to-one marketing.

The avatar can be used as a channel to sign up users for new services, or to guide them through previously unfamiliar tasks such as cash deposits. When a transaction is selected, the avatar talks the user through the process and can be called upon to provide further information as and when the user needs it.

Your personal personality
The avatar character itself, being computer-generated at the time of the transaction (rather than being a simple pre-recorded image), is completely flexible in its appearance, behaviour, and even tone of voice. There are a number of ways in which the avatar's characteristics can be determined and controlled:

* One for all: The bank can use the avatar to reinforce its own brand. For example, a bank that has a well-known personality already associated with its advertising could use an avatar representation of that personality.

* Customer choice: The customer can be given the option to choose from a range of pre-defined avatar personalities, so that they can deal with a character with whom they are comfortable.

* Automatic selection: The choice of avatar characteristics can also be determined at the time of the transaction, based on the information held about the customer in the bank's back-end CRM (customer relationship management) system. This method could be used to automatically select the avatar's gender, apparent age, appearance, language, voice tone, and even phraseology. Such decisions might be made electronically when the bank card is inserted, or could instead be made in advance by the CRM system.

"Getting the right character is vital," explained Grossi. "At the end of the day it's about promoting trust. People have to be comfortable with the image and voice of the character."

Learned behaviour
But apart from identifying the best character to use when the customer inserts their card, the avatar can also be configured to learn and remember which language the customer prefers to use (for example, in the USA, many consumers prefer to speak Spanish even though they also speak English). The avatar is capable of using sign language to make itself understood, too.

The learning process doesn't stop there, though - the software that drives some existing ATMs has taught the avatar a trick or two as well. The ATM can examine past transactions or sessions (in many cases the three most recent ones), and draw conclusions about the 'average' or 'usual' transaction made by each client. Similar options can then be presented first in an effort to make the client's visit a little easier and quicker. For example, if a customer often asks for their account balance on-screen, then draws �20, and then asks for a printed receipt, the ATM can offer that as a one-button operation - a process not dissimilar to walking into your regular bar and hearing, "The usual, then?"

Coming soon?
"Royal Bank of Canada are looking at the system right now, plus a number of other banks which we aren't naming just yet - particularly in Canada, the UK, and the Asia Pacific region," said Grossi.

When asked when high-street consumers are likely to find themselves talking to an avatar-in-the-wall, Grossi explained: "It won't necessarily be prominent in the traditional high-street cash dispensers for a while yet, but it will be put into use for more complex transactions such as ATM direct cash deposits, for bill payments, mobile top-ups, and the like."

However, according to Grossi, avatar-driven ATMs could be seen in high-streets in trial installations as early as 2004, in Canada and perhaps the UK.

Platforms and upgrades
Asked about the hardware requirements for the software behind the avatar, Grossi explained that there's a minimum hardware requirement, and that many ATMs that are already installed are quite probably suitable. The software runs on Microsoft Windows XP systems, which means that ATMs based on other operating systems would need to be upgraded. Some that use older hardware specifications may also need physical upgrades.

In terms of setting up the service for each ATM operator, Grossi says that NCR can offer complete solutions out-of-the-box, through to any level of software customisation or installation using existing compatible hardware. Ongoing development of the system for each bank can either be handled by the bank's own IT teams, or by NCR's designers and engineers.