The ATM Industry Association Canada held its monthly board meeting Friday at 10 a.m. via conference call. EMV progress in both the U.S. and Canada, including MasterCard's U.S. ATM liability shift announcement, manufacturers' readiness for the new Bank of Canada bank notes, and interchange reduction were among the issues discussed.

Mike Lee, ATMIA CEO, opened the meeting by talking about global issues with regard to interchange reduction, citing the interchange review process currently underway in South Africa through the African Reserve Bank. ATMIA is submitting a paper for the bank to review with interchange positions from members, a similar action the association took during the interchange review process in Australia.

"In the UK, we've set up a European legal fund because Visa UK has reduced interchange to 8 percent below the national network rate. The latter rate is determined by KMPG's [global network of professional firms providing audit, advisory and tax services] annual audit. Everyone is puzzled by how Visa can undercut the going interchange rate, so this could be a threat to some independents, and we're looking into it," Lee said in the meeting.

Lee also said that the U.S. legal fund has been established, along with a state by state strategy in an effort to get the Department of Justice to look at the way interchange is impacting the competitiveness of the U.S. networks.

"We feel this interchange reduction continues putting severe economic pressure on independent operators, who actually own over 50 percent of the ATMs in the U.S., which is more than 250,000. That's a lot of ATMs out there and a lot of consumers withdrawing cash from those ATMs, so it's a big issue," Lee said.

Germany has recently implemented surcharges, according to Lee, while Poland's interchange rate situation has led to very little industry growth and shrinking revenue. Lee said there is a possibility that lobbying for a surcharge model in Poland may ensue.

"Our perspective is always that we can't stand by and let people go out of business because the economics are not right. So, we want a fair and competitive network, so everyone can compete, and that ultimately benefits the consumers," Lee said.

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Lee also touched on the surcharge sticker situation in the U.S., calling it a "total nightmare," and a "hot bed of frivolous lawsuits which are costing operators thousands of dollars [in associated legal fees and fines]." The association believes the sticker requirement is redundant, since the ATM screen provides the user with fee notification.

Lee said ATMIA's lobbying efforts are receiving a good response from both political parties.

"Congressmen and senators are agreeing with our standpoint that the sticker requirement is redundant, and we're confident that eventually it will be eliminated," Lee said. The association worries that the same scenario will apply with the upcoming American with Disabilities Act requirements if machines are not fully compliant by the March 2012 deadline.

ATMIA Canada updates

The U.S. Visa and MasterCard announcements regarding EMV liability shifts in the event of fraud have put more pressure on the U.S. to make the transition, which will also result in compliance upgrades and costs, according to Lee. 

"There have been some rumblings around Canada about the liability shift announcement from MasterCard. There are some concerns, but as far as EMV progress, the members I've spoken with around Canada have taken the position that it just has to be done," said ATMIA Canada Executive Director Curt Binns.

Binns said the EMV transition in Canada is becoming a non-issue with implementation nearly complete. He said what is overshadowing the EMV issue currently is Quebec's Money-Services Businesses Act, which would require operators, owners and lessees of ATMs, including lessors of a commercial space intended as a location for an ATM, to be licensed by the government and pay related licensing fees.

"The effects on the ISOs are dwindling. One of the next things the committee has to do is get high-level ranking police officers from the Quebec Provincial Police to give us their position on ATMs being part of the anti-money laundering act," Binns said.

Binns also raised the issue of the state of readiness on the ATM manufacturers' part for the new bank notes being issued by Bank of Canada.

Vern McLean, manager of Canadian sales for Triton Systems, told the group that Triton has performed tests on several models in preparation for the new bank notes.

"The majority of the impact isn't so much the note make-up or material, but certainly the clear window in the bills is a concern. The majority of dispensers are able to handle all the bills, with the exception of one particular model that is built by Talaris. That one will require some change to a controller board," McLean said.

McLean said there will be some expense to operators in terms of upgrades for the Talaris model.

ATMIA welcomed three newly elected directors, including Chris Chandler, CEO and president of Access Cash in Canada. The other directors are Mark Yip, managing director, GRG Banking Equipment (China), and John Leehy III,  president and CEO, Payment Alliance International (USA).

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