ATM Industry Faced Many Challenges in 2012

It is not likely manufacturers and owners of ATMs will experience a more interesting – or challenging – year than 2012 any time soon.

The year began with the race to meet a March 15 deadline to adhere to new Americans with Disabilities Act regulations. There were also advancements in mobile deposit, video tellers and prepaid-card issuing from ATMs, as well as the burden this year of the ongoing EMV smart card migration into the U.S. market.

In addition, the industry endured a test of its products' ability to deliver in a time of need when Hurricane Sandy struck just before Halloween and left thousands of people scrambling for cash.

"This was certainly an important year for the industry," says Bruce Renard, executive director of the National ATM Council Inc. "When you look back at it, many good strides were made on behalf of the ATM industry to raise the level of awareness of key issues significantly."

The Department of Justice's ADA regulations set the stage for a busy year.

There was no easy answer for ATM operators struggling to update voice guidance, keypad input controls and Braille signage on their machines so that people with disabilities, particularly visually impaired, could operate them.

Even with most ATM owners meeting the regulations' deadline, some banks faced lawsuits over the instances in which even just a handful of machines fail to fully meet the necessary requirements.

ATM operators who have kept their eyes on Capitol Hill feel they are finishing the year on a high note because legislators passed a bill that would eliminate the need for ATM operators to disclose fees on the machines' exteriors. The president signed it into law on Dec. 20.

This was promising news for ATM deployers who had argued most of the year that the exterior stickers could become dated or difficult to read, and that an on-screen disclosure of fees should suffice.

Passing the fee sticker law stands out as the most significant accomplishment for the industry this year, Renard says. "Any legislation passed by Congress to help the industry's situation says a lot about our ability to play on the stage of public policy," he adds.

In a move in October that illustrated the potential for the ATM technology of the future, Better ATM Services announced it had completed months of testing and would now offer its clients an ATM that could dispense prepaid cards.

In another move illustrating new uses for ATMs, Korala Associates Ltd. introduced its "retail teller machine," a cashless ATM. The units drew attention from bank executives who felt the machines could serve a purpose in bank branches as promotional or educational tools for customers seeking information about bank services. 

At the same time, ATM manufacturers positioned their equipment as products ready to enter a new age in payments and technology, especially in transforming bank branches with self-serve banking kiosks or video tellers.

As banks surveyed the ATM technology landscape, it was becoming clear many would proceed with caution while assessing exactly what their customer bases were seeking in ATM services. In general, however, consumers viewed the development of the single-slot deposit at ATMs for cash and checks as a service they would embrace. 

"On the ATM customer experience, video banking and video tellers were a key development during the year," says David Albertazzi, a senior analyst and ATM industry expert with Boston-based Aite Group. "Also, the single-slot technology adoption to simplify and streamline remote deposit transactions was important for customers."

Bank customers can expect to see further development of technology that unfolded this year in the virtualization of ATMs and cloud services at the ATM, Albertazzi says.

But the U.S. migration to EMV smart card technology represented one facet of future technology that had independent ATM owners anxious because of a lack of knowledge, potential costs and what they perceived as timeline uncertainty on the part of the card networks.

In September, MasterCard set an October 2016 deadline for liability shift related to EMV for ATM operators, providing some guidance on the timing for when ATMs had to be able to accept chip-based cards. 

With so much discussion about new technology during the year, it was not surprising to hear data security vendors claim the advancement of mobile and ATM technology represent a new arena for cybercrooks as well. 

ATMs found themselves in the middle of a Summer Olympics controversy in London when Visa Europe pulled the ATMs of independent operators out of the Olympic Village, leaving only Visa-branded units. Supporters of cash as a vital payment method spoke out against Visa, as did those in the ATM Industry Association.

On a more positive note, ATMs became life-aiding devices when Hurricane Sandy came. In addition to providing access to cash in storm-struck areas, ATMs accepted donations to Red Cross for those who wanted to help. 

"Overall, it was a year of challenges," Renard says. "From the ADA and the serious costs it imposed on the industry, to the ongoing drop in interchange rates for ATM operators, to the introduction of EMV, they are all significant challenges."

Moving into 2013, Renard says the ATM industry hopes to receive a favorable ruling in the National ATM Council's lawsuit against Visa and MasterCard in which the council and independent ATM operators contend the card brands conspired to fix ATM prices and suppress competition among networks.

In addition, the council filed a court motion last month seeking exclusion from any settlement resulting from retailers' battle with the card brands over interchange fees because it would preclude ATM operators from pursuing their own grievances with Visa and MasterCard.