Article
Guides offer a roadmap for 2 major ATM upgrades in 2014
Information in new premium guides can take some of the angst out of upgrades to EMV and Windows 7 in the new year.
December 20, 2013 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications
The upcoming year will mark a deadline for one challenging new ATM initiative — migration from Windows XP to Windows 7 — and continuing progress toward looming deadlines in another major undertaking — the U.S. migration to EMV technology. Both are replete with details, complications and, of course, major expenses.
ATM Marketplace has introduced two comprehensive new guides to help deployers understand the obligations and options, benefits, risks and consequences attached to both migrations — and to assist them in planning, organizing and implementing the upgrades to their machines. Below, we've provided excerpts from the publications, which are now available for purchase.
The background and strategies ATM deployers need to make the most of their EMV migration.
The U.S. has been forced to embark on EMV migration because card fraud has been moving to the U.S. from countries that have already rolled out EMV technology. As the vast majority of U.S. ATMs and POS terminals can only accept mag-stripe cards, criminals are making mag-stripe clones of European EMV cards and using them in the U.S.
The European ATM Security Team reports that the U.S. is the top destination for ATM-related fraud migrating from EMV-compliant countries in Europe. According to FICO, there has been a significant rise in ATM skimming in the U.S.
Another reason for the U.S EMV migration is the increasing incompatibility between mag-stripe cards issued by U.S. financial institutions and EMV acceptance devices deployed outside the U.S. Non-EMV cards are viewed by foreign acquirers as being more of a fraud risk, especially in Europe, which has resulted in U.S. travelers' mag-stripe cards being rejected at European ATMs and POS terminals.
Liability shift
As part of their EMV migration roadmap, Visa and MasterCard have put in place deadlines for shifts in counterfeit card fraud liability for U.S. ATM and POS acquirers who do not migrate their ATMs to EMV. Once MasterCard's October 2016 and Visa's October 2017 ATM deadlines have passed, if an EMV card is used fraudulently at an ATM that doesn't support EMV, the acquirer will be liable for the issuer's fraud losses. ...
A major task
Migrating ATMs to EMV will be a greater task in the U.S. than elsewhere because of the fragmented nature of the U.S. payments industry. Unlike Europe, the U.S. has many thousands of small banks and credit unions, as well as multiple acquirers/processors, ISOs and POS debit networks. Each acquirer/processor and debit network needs to certify the EMV card readers and EMV software deployed on the ATMs and POS terminals connected to its switch.
According to Aite Group, under 20 percent of U.S. bank-owned ATMs will be too old to migrate to EMV, and will need to be replaced. In the case of ATMs that can be upgraded, Aite Group puts the EMV migration cost at $3,000 to $4,000 per ATM.
The good news is that, in recent years, ATM vendors such as Diebold, NCR Corp. and Wincor Nixdorf have been supplying ATMs with EMV card readers in the U.S. market. However, these ATMs will need to be software-upgraded to EMV. ...
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Industry observers doubt that the U.S. cards industry will be able to meet the card schemes' EMV liability shift deadlines, particularly because of the confusion over Durbin. However, there is no indication that Visa and MasterCard will be willing to postpone their deadlines.
ATM operators should start planning their migration to EMV now, because leaving their migration to the last minute could be a costly mistake. ATM vendors will likely not have the resources to assist large numbers of clients who all try to migrate to EMV very close to the deadline.
As part of their EMV preparations, ATM deployers need to educate themselves about EMV technology and implementation options, assess their current infrastructure and determine appropriate changes. They should also consider running their EMV and Windows 7 migration projects in tandem, in order to achieve operational efficiencies and cost-savings.
Although the first EMV implementation in the U.S. will be contact-based, U.S. issuers are expected to move to EMV-based contactless cards and NFC-based smartphone payments over the next five years. So ATM deployers need to plan towards being able to accept EMV-based contactless card or NFC-based withdrawals from their ATMs.
Myriad dangers await deployers who do not upgrade to Windows 7. Here's how to survive the migration, and why it is critical to start now.
With Microsoft due to end support for Windows XP on April 8, 2014, the race is on for ATM deployers to migrate their ATMs to Windows 7.
ATMs that haven't been migrated to Windows 7 after April 2014 will no longer receive Microsoft security patches. They will be exposed to greater security risks and could also be in breach of the PCI DSS security standard, which requires that ATMs be kept up to date with the latest security patches for their operating system.
ATMs running XP will face greater software maintenance costs after April 2014 as vendors migrate all their applications to Windows 7, and XP-based resources become increasingly scarce.
While compliance with PCI DSS is a key driver for migration to Windows 7, there are several other benefits to be gained by switching from XP, as well. Windows 7 features a sophisticated user interface that enables ATMs to offer support for the latest touchscreen technology and iPad-style interactions. These capabilities will allow FIs running Windows 7 on their ATMs to differentiate themselves from competitors still running XP.
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| Windows 7 ATM Migration Guide |
Windows 7 also has several built-in features that make it more secure than XP, such as Session Zero Isolation.
As financial institutions have largely already migrated their back-office PCs to Windows 7, running Windows 7 on their ATMs will allow them to standardize their operating system environment, which will result in greater efficiency.
According to NCR Corp., the process of planning and implementing migration to Windows 7 can take from 6 months to a year. ATM deployers in the U.S. should also consider whether to combine EMV and Windows 7 upgrades in order to save costs.
Robert Johnston, NCR global marketing director for enterprise software, estimates that by April 2014, one-third of ATMs worldwide will have migrated to Windows 7.
"By the end of 2014, no more than 60 percent of all ATMs worldwide will be running on Windows 7," he says. "By the end of 2015, 85 percent to 90 percent of global ATMs will have migrated to Windows 7."
cover photo: Canada BiblioArchives/LibraryArchives
About Suzanne Cluckey
Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.
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Diebold Nixdorf
As a global technology leader and innovative services provider, Diebold Nixdorf delivers the solutions that enable financial institutions to improve efficiencies, protect assets and better serve consumers.
