Article

The Diebold ActivEdge ATM card reader: A turn for the better?

Simply by rotating card orientation 90 degrees, Diebold aims to turn the ATM skimming underworld on its head.

July 30, 2014 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

The ATM industry has been working for a long, long time to come up with an unbeatable solution to the problem of card skimming. Vendors have introduced technologies based on card jitter, signal jamming, surface detection sensors, tamper-proof fascia designs, and the list goes on.

But, said Diebold Inc. EVP and Chief Innovation Officer Frank Natoli in a phone conversation with ATM Marketplace, "All of those have been overcome one by one — the good guys build a 10-foot wall and the bad guys build an 11-foot ladder."

However, Diebold believes that its new card reader technology will shorten the ladder by several rungs. On Tuesday, the company introduced ActiveEdge, a card reader that is unskimmable by any currently known mechanism. An announcement explained why:

ActivEdge approaches skimming from a different angle, literally, by requiring users to insert cards into the reader via the long edge, instead of the traditional short edge. By shifting a card's angle 90 degrees, ActivEdge prevents all modern skimming devices from reading the card's full magnetic stripe, eliminating the devices' ability to steal card data.

In addition, encrypted communication to the ATM's central processing unit eliminates fraudsters' ability to capture and track data. And each reader is paired with a specific ATM, making it pointless for a criminal to swap out the ActivEdge device with another card reader.

The device also combats card trapping with a locking gate similar to the hardened protection manufacturers have developed for the cash dispenser. "[I]f any sort of tampering or pressure like that happens with the gate, it sends an appropriate alarm signal that we can deal with in a number of different ways," Natoli said.

Dave O'Reilly, chief technologist at FTR Solutions, an Irish consultancy that specializes in security organization, management and design for the financial industry, has had extensive experience with ATM skimming and anti-skimming technologies.

"I like the simplicity of the idea, especially if it offers a cost-effective alternative to other anti-skimming technologies," he wrote in an email to ATM Marketplace. "Simply putting the card into the slot sideways will prevent certain types of attacks."

O'Reilly noted that current skimmers generally require that the magnetic stripe passes over the skimmer’s magnetic read head, something that would be prevented by the device, which he categorized as "physical obstruction" technology.

Still, he said, "We tend to adopt an approach that all technologies can be defeated until we can demonstrate that they can’t."

O'Reilly said certain attack scenarios might be possible, depending on how the card reader integrates into the rest of the ATM. "It would be interesting to see how the criminal community responds if the technology becomes widespread," he wrote.

ActivEdge is EMV enabled, as well. A stationary chip reader makes contact with the card just as in any EMV transaction, while the read head moves laterally to scan the mag stripe.

Encouragingly, a Diebold usability study showed that 95 percent of participants preferred ActivEdge over current readers for its enhanced security, and didn't mind changing their card insertion behaviors for more secure transactions.

And in any case, the industry is already preparing to re-educate consumers about chip card readers, so this could be just one more step in that process.

See how ActivEdge works:

Some deployers will ask whether anti-skimming technology is a redundancy in an EMV world. But as long as cards continue to carry a magnetic stripe, the answer will be no.

"EMV does help with what we would call redemption fraud," Natoli said. "[But] even an EMV card reader, while it won't allow redemption absent the chip, can still be vulnerable to the theft of the track two mag stripe data for redemption use in another channel." Or in another, non-EMV ATM anywhere in the world.

Diebold spent considerable time and effort to engineer the new card reader into the smallest possible package in order to ensure that it would fit the vast majority of current card reader installations, Natoli said, and added that the company was committed to producing retrofit kits for additional models in short order.

"Certainly, if you were a customer and called with an order and you weren't covered yet, we'd work to prioritize that for you and get you covered very, very quickly," he said.

The company isn't giving out specific pricing information, but Natoli said the reader is priced comparably to a premium card reader package, and costs about one-third as much as a high quality anti-skimming setup.

"So what we have is something that's far more cost efficient than the most premium anti-skimming technology, and obviously, much, much more effective," he said.

Diebold is still considering whether to license the technology to other vendors or, perhaps, to produce kits for multiple vendors. Natoli said the company wants to make a decision that serves all stakeholders.

"We definitely want to advance the security of the ATM and self-service channel," he said. "So ultimately we want to make a decision that from a business sense is fair to Diebold, but also make sure that we're doing everything we can to drive the industry's security forward because that's in all of our best interest; it's in the consumer's best interest; it's the right thing to do."

It's inevitable that criminals will waste no time trying to devise ways to defeat ActivEdge technology. The question is whether they'll succeed and how long that might take.

O'Reilly said the new Diebold technology might be a challenge to beat.

"It’s hard to say how long it will take criminals to figure out how to beat the system," he said. "My gut feeling is that it wouldn’t be impossible in principle to beat this system, but it will require some research and development on the part of the criminal community."

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.

Included In This Story

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.

Request Info

Learn More