ATM compliance and security will drive upgrades, software investments in Canada
Canadian white-labels are in for a wave of security mandates and high-dollar ATM investments.
June 16, 2009 by Tracy Kitten — Editor, AMC
Regulatory and security compliance issues are looming in Canada, and ATM operators at last week's ATM Industry Association conference in Toronto were anxious to hear and see what answers industry leaders are developing to help their plight.
From EMV compliance to Payment Card Industry standards, ATMIA's speaking docket and exhibit hall reflected a host of answers and solutions.
On the regulatory front, Don Moors of Temple, Scott & Associates Inc. says interchange fees, anti-money-laundering initiatives at the ATM and tighter lending rules on cash will all soon have impacts on the payments industry in Canada.
"Three parliamentary committees are studying different aspects of the Canadian payments system," Moors said during his June 10 presentation. "We should be looking to the U.S., where tougher regulation is coming down on the financial sector, as an example of what could be coming. And in the U.K. and the E.U., we've seen significant upheaval in those markets as well."
Topping the list of likely governmental oversight, Moors says, will be anti-money laundering, or AML, and anti-terrorist financing protocols; ATM pricing; and regulations that restrict the cash provisions issued by banks and credit unions. He also encouraged the industry to play a more dominant role in how the media and public perceive it.
"How your industry is perceived in and by the media impacts how politicians see it," he said. "The price consumers pay for convenience and the interchange debate that's coming to Canada from the U.S. are two points to watch, and should involve public information officers for your industry."
Moors says deployers should:
- Understand that media focus leads to more government focus
- Have an independent voice in the industry
- Understand the complexities that surround addressing policy issues and building awareness
- Know that politicians don't understand how critical it is for consumers to have convenience, and that convenience must carry a fee
And then there is the migration to EMV, which Interac Association's Wendy Macpherson addressed during her presentation, "EMV Implementation in Canada: Are We There Yet?"The ultimate answer to that question is no, but banks and credit unions are much further along than the independents, and that lag in compliance will likely cause independent ATM deployers some problems.
"As consumers become more aware of fraud, they begin to change their behavior," she said, which includes using retail or off-premises ATMs less and financial institution ATMs more. "Once fraud migrates away from the FI ABMs (automated bank machines), it will hurt the independent, white-label ABMs that are not EMV compliant."
Manufacturers are responding to the call. Nautilus Hyosung during the conference showed off its Monimax 5000CE — the first white-label ATM in Canada to achieve EMV compliance. Nautilus and TNS Smart Network announced the EMV certification shortly before the show.
PCI: ATM 2010
Susan Kohl, the president of ThoughtKey, a consultancy that focuses on PCI compliance, says ATM operators who choose to wait by the wayside on PCI mandates will soon be covered in the dust left by the overachievers.
Change is on the way, and it's not far off. By 2010, PCI ATM will be at the forefront, following in line with the PCI Data Security Standard, PCI UAT (unattended terminals), PCI PED (PIN entry devices), PCI HSM (host security module) and PCI PIN.
"It's going to mean the operating systems that go into ATMs must meet the PCI standard," Kohl said. "With PCI, no information should ever be kept or stored. … You need to know all of the software you have and where it comes from, and you need to know who touches the data and when."
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The ATM Industry Association, founded in 1997, is a global non-profit trade association with over 10,500 members in 65 countries. The membership base covers the full range of this worldwide industry comprising over 2.2 million installed ATMs.
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