Article
ATMs without wires
While CDPD never achieved its potential in the ATM world, some in the industry are excited about the new wireless technologies that are emerging to replace it.
November 20, 2003
Many in the ATM industry had "Great Expectations" for CDPD (Cellular Digital Packet Data), a form of wireless telecommunications, when it was introduced in the late 1990s.
Yet after five years, actual deployments of the technology -- with apologies to the Bard --amounted to "Much Ado About Nothing."
Bill Jackson, chief technical officer of Triton, one of two manufacturers to provide native ATM support for CDPD (with a factory-installed modem and antenna), said the technology was "never adopted by the masses," largely because of its limited coverage area. He estimates that Triton customers have deployed about 1,000 ATMs with CDPD.
Bob Hunsberger, a wireless data systems engineer for Verizon Wireless, one of several wireless carriers offering CDPD, agreed that the coverage can be spotty, with "big holes" in certain metro areas such as Atlanta. Hunsberger believes there may be as many as 10,000 ATMs currently running CDPD, although he admits that number may be high.
"CDPD never came close to fulfilling its potential," said Charlie East, president of GTI, the other manufacturer that offered a native CDPD option for its ATMs. "When it came up and worked, it was really great -- but some folks had bad experiences with installations. If they tried it and got burned, they usually didn't want to try again."
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East, who estimates that "a few hundred" GTI ATMs currently use CDPD, said it is particularly popular among independent deployers who take ATMs to temporary events such as fairs and festivals. It removes the need for a phone line and offers faster connection times -- a bonus at sites where queues are common.
"Mobile operators were a little more willing to ride the learning curve," East said.
Hunsberger said that in some cases antennas must be extended with a booster to pick up a CDPD signal; "maybe 10 percent" of installations require an exterior antenna. In addition, CDPD cannot be used in underground locations such as parking garages.
"You're going to have some anomalies not associated with a pair of copper wires," he said.
Emerging technologies
Major carriers will discontinue CDPD in the next few years. AT&T will not support CDPD beyond December 2004, while Verizon plans to drop it in October 2005. They have already introduced new -- and they say improved -- technologies to replace it.
AT&T, Cingular and others are rolling out GPRS (General Packet Radio Service), a later generation of the GSM (Global System for Mobile Communications) standard that is widely used in Europe.
Verizon, Sprint, Alltel and others are supporting CDMA (Code-Division Multiple Access). Unlike GPRS, CDMA does not assign a specific frequency to each user. According to Webopedia, the British used it during World War II to foil German attempts at jamming transmissions. The allies decided to transmit over several frequencies instead of one, making it difficult for the Germans to decipher complete signals.
Unlike CDPD, which Verizon's Hunsberger likened to an "overlay" designed to allow data transmission over voice networks, both CDMA and GPRS were created specifically for data and are used for devices like PDAs and Blackberries.
Coverage will be "much more ubiquitous" for both technologies, Hunsberger promised. Verizon supports CDMA in the same footprint as its voice network -- currently 97 of the nation's top 100 metro areas, he said.
As to why carriers are offering more than one wireless data technology, Hunsberger offered no theory other than the old saw: "You know what I like about standards? There are so many to choose from."
Plenty of potential
Despite the false start with CDPD, Jackson, East and others are excited about the new forms of wireless technology that are supplanting it. In fact, Triton plans to showcase a demonstration of CDMA at this week's BAI Retail Delivery Conference and Expo in New Orleans.
"I know I've said this before, but this has the potential of replacing dial-up," Jackson said. "Because we're going to have much better coverage than we ever had with CDPD, I think people will consider it for more than mobile deployments."
John Willmon, vice president of business development for Columbus Data Services (CDS), a third-party transaction processor that has about 650 terminals running CDPD, said it also shows potential to replace leased lines or Frame Relay in high-volume locations that want a faster, "always-on" connection but balk at the cost of those technologies, which can run more than $200 a month.
Out with the old: |
CDS is bringing an ATM live on CDMA in just such a high-volume location next week, Willmon said.
All of the reasons that CDPD made sense for deployers still apply with CDMA and GPRS, Willmon said. It's faster, equaling leased line's speed and shaving five seconds or more from dial-up transactions. The lack of wires speeds installation and makes it easier to move ATMs, not to mention eliminating the upfront expense of a business phone line.
Jewell Clem, owner of a New York-based ISO with about 75 machines, all but about a dozen running CDPD, enjoys all of those advantages. Faster transaction times are especially important in the bustling Big Apple, Clem said, and it's often difficult to work with local phone companies there.
Many of Clem's machines are placements, which means she bears the cost of installing phone lines and paying monthly charges. She said, "I've had to pay more than $300 to get a line installed, and $30 or $40 a month" in the few locations such as a hotel where she was unable to get a CDPD signal.
Clem said she is "really excited" about the new wireless technologies.
Dale Beasley, manager of product development for Verizon, said that CDMA will cost "significantly less" than the typical $30 to $50 fees associated with a business landline.
"We're putting together a price plan based on the amount of data transmitted. Since very little data is actually transmitted during ATM transactions, the cost is going to be pretty low," Beasley said. "It's possible it could be less than $20 a month."
Jackson said that determining if coverage is available with the new technologies is much simpler than with CDPD, which had deployers using occasionally unreliable coverage maps on carriers' Web sites.
"You walk into the location where you're going to install an ATM with your cell phone. If the little data icon on your phone is showing, you've got coverage," he said, noting that coverage for ATMs doesn't fade as it sometimes does with cell phones since the machines are stationary.
Wireless technologies are a logical option for locations such as shopping malls, where it can be especially difficult and expensive to install phone lines. Jim Walker, senior vice president of ATM Banking for PNC Bank, said his institution had chosen CDPD for more than 200 of its off-site ATMs for that reason.
Addressing an audience at the October 2002 ATM&Debit Forum sponsored by Thomson Financial Media, Walker said he preferred wireless to dial-up because of its "always on" connectivity which makes it easier to monitor ATM activity.
Support is on its way
Despite this week's planned demo, Jackson said Triton has not decided which wireless technology it will ultimately support, or whether it will support both CDMA and GPRS. It plans to introduce its new product to existing users of CDPD first, Jackson said.
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Jackson doesn't believe support from transaction processors will be an issue, since many of them already support CDPD. "The majority of them already have wireless connectivity. It will just be a routing exercise," he said.
East said GTI plans to roll out CDMA first, in 2004's first quarter, largely because it has more experience working with Verizon, which has pursued the ATM market more aggressively than most other carriers.
"If it becomes necessary to support GPRS, we will. It wouldn't be an issue if any of the carriers had 100 percent coverage, but that's obviously not the case. We'd like to be able to cover everything. A lot of ATMs aren't going into the top 100 markets," said East, referring to Verizon's footprint.
Network services provider TNSsupports CDPD with a member of its TransXpress line of modems, which "spoof" legacy ATM communications protocols such as Bisync and SDLC, converting them to newer protocols such as CDPD for transmission over the appropriate networks. The modems are used by transaction processors and by financial institutions that drive their own ATMs.
Kent Phillips, TNS' director of business development, said the company plans to roll out modems to support both CDMA and GPRS in 2004's first quarter. He said, "we had to respond to the sunsetting of CDPD" for the several hundred wireless ATMs that TNS currently supports, as well as prepare for new market interest in wireless technologies.
A key advantage wireless offers over dial-up, Phillips said, is its higher bandwidth, which may become increasingly important as interest in non-traditional transactions such as money transfer and check cashing continues to grow.
While large retail chains already have frame relay networks they can leverage for IP-based transactions, Jackson said that wireless technologies present a viable option for smaller retail locations where merchants and deployers want to offer IP-based transactions.
"If you can send a picture over a cell phone, imagine what you'll be able to do with an ATM," Hunsberger said.
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