Simply, Windows 7.
Windows 7 is a required operating system update to be completed by April 8, 2014, for all ATMs that currently run Windows XP, the software platform that drives the overwhelming majority of the world's advanced-function ATMs.
Manufacturers are scrambling to make the changeover in time … some are ready and others are in the final phases of testing the software on their ATMs.
Here's the rub
A great number of financial institutions have ATMs in the field that will need extensive upgrades in order to support Windows 7. FIs with hundreds of will have to determine ATM-by-ATM what they must do to support the new standard.
An FI's ATM fleet might include a variety of models that could differ greatly in age. The provider will need to make assessments and compare the cost for upgrades against the cost to purchase new or refurbished ATMs that will support Windows 7.
Many existing ATMs will have to be replaced. Manufacturers will not be developing software for these older, legacy models; they have newer ATM models that must be certified by ATM processors, and they are going to focus on what's currently on their shelves.
The U.S. is blessed to have many ATM processors, which gives us plenty of choices when we consider an ATM deployment. You can imagine the daunting task these processors have on their hands to be ready in time for Windows 7 migration: You have to know that every manufacturer is hoping for priority status in getting their products certified.
With slight variances between processors' platforms, this is not a one-size-fits-all operation. There is a great amount of work to be done behind the scenes.
Windows 7 is not a free update. And, while it does interface with EMV card readers, the cost for the software is in addition to the cost of upgrading to EMV. Two separate upgrades.
Some manufacturers are tying both together so that an FI must update its ATMs to Windows 7 before it can even consider adding EMV functionality.
An older model ATM might easily exceed $10,000 in costs to modify and upgrade. And an FI might have a few hundred such ATMs in the field.
This is why I recommend that IADs strike while the iron is hot.
IADs to the rescue
This is a perfect time to talk to local banks and credit unions in your service area about their ATM upgrades.
Ask them if they've conducted a full review of the costs to upgrade their ATMs. Some may answer that they will not be keeping an ATM program in place for cost reasons. This should be your golden moment to discuss the benefits of outsourcing as a way for your prospect to keep the program alive.
Most IADs only offer ATMs and payment solutions and have become expert at keeping ATMs profitable. As an IAD, offer to outsource an FI's entire ATM program … or even a piece of it. The financial institution might wish to manage their cash … that's perfect and they keep skin in the game.
The IAD operates and maintains the ATMs and provides processing services, parts and — get this —all upgrades. An FI staring at a huge cost to update to Windows 7 probably wishes they already had an outsourced program. Then none of the cost burden would fall on their shoulders.
ATMs will remain a vital part of our economy and the primary means for the financial institutions to service their cardholders in an automated fashion. Cash will remain king for some time and cardholders demand convenient access to their available funds.
IADs would do well to discuss the costs of past upgrades (Triple DES, VISA EPP, PCI, ADA … ) with their customers. Each of these upgrades required a trip to the ATM and the cost of operation will have only grown higher with each upgrade.
You can be assured that every FI has a committee looking over the numbers and seriously doubting that their ATM program will ever be profitable. But … what if an IAD offered a bundled package that included all of these services at a consistent monthly cost?
Since the IAD takes on the majority of the burden for future upgrades, wouldn't the FI be wise to consider this type of program for survival in the market? Absolutely they would, and indeed, many are turning to outsourcing as a way to keep their business growing.
IADs can even offer extensive ATM branding and surcharge-free programs to help the FI maintain a presence in off-premises locations. Branding is an ideal way to help FIs convey their message and cross-promote their services; surcharge-free access will allow them to keep their cardholders happy by eliminating annoying fees.
Find creative ways to grow your FI customers' business via ATM advertising. A credit union, for example, would love to have a workplace-located ATM that encourages new members to sign up. IADs are masters at putting together such marketing programs and making them profitable for their clients.
One person's burden is another's blessing. Start discussions today about outsourcing to help FIs remain viable for their cardholders.
The IAD picks up business in processing, maintenance and branding; the FI turns a very important program over to an expert in ATM management; the cardholder retains a convenient service. This is a win for everyone!
Read more about outsourcing.
/ As VP of the Kahuna Financial Solutions division of Kahuna ATM Solutions, Mark is responsible for development of the division's product and services lineup. He manages the Kahuna VAR channel and provides direct sales support to financial institutions.