Just when the U.S. payments industry seemed well aware of liability-shift deadlines and timeframes for equipment upgrades for EMV chip card conversions, along comes a reminder that ATM owners are far from certain about what to do.
Many ATM owners–both banks or independent deployers–are waiting to jump into costly EMV upgrades, David Albertazzi, a senior analyst and expert with Boston-based Aite Group, tells PaymentsSource.
Their hesitancy comes primarily from Visa Inc. not having yet issued a liability-shift deadline as it relates to EMV and ATMs, Albertazzi says. Through such a shift, the owner of an ATM not accepting EMV cards would be liable for fraud occurring at the ATM.
But the owners and deployers also fear that a form of contactless technology that could become more prevalent at an ATM than an EMV card could unfold in the coming years, adding to the apprehension, he adds.
“They don’t want to commit to an expensive upgrade and then have to change it again in another year,” Albertazzi contends.
MasterCard Worldwide, with the support of European issuers, is the only card network applying EMV pressure in the ATM arena, Albertazzi adds.
MasterCard has established an April 19, 2013, deadline for EMV conversion for its brands’ acceptance at ATMs, shifting the liability to the ATM owner for any fraudulent Maestro transactions used on an ATM unable to accept EMV cards (
“But the ISOs in the U.S. are saying they will wait and just not accept Maestro cards in the meantime because they represent such an insignificant number of transactions,” Albertazzi suggests.
Because issuers in the U.S. have stated intentions to include magnetic stripes on new EMV cards, at least at the start, the ATM owners are less concerned about waiting on EMV upgrades for fear of losing business, Albertazzi notes.
MasterCard set the same EMV deadlines as Visa did for merchants and point-of-sale terminals but chose to focus on ATM access instead.
But ATM owners are clinging to a short note that appeared on a bulletin Visa issued on Aug. 9 that stated: “Note: This liability shift policy change excludes counterfeit fraud at U.S. ATMs. Visa will continue to evaluate the potential for an expansion to include ATMs.”
A Visa spokesperson confirmed to PaymentsSource that the company’s stance on ATM fraud as it relates to EMV conversion has not changed. However, she could not comment on the card brand’s future position on the issue or when such an announcement could take place.
Albertazzi speculates Visa may not establish guidelines for ATM-fraud liability for another year or longer.
“A future mandate could be more significant than what the ATM owners expect, which is another reason they would be inclined to wait on this before making upgrades,” Albertazzi suggests.
The ATM owners and consumers benefit from EMV upgrades as a fraud-prevention measure, which ensures that all ATMs will be upgraded at some point, he adds. However, when a single ATM upgrade could cost a bank or independent deployer between $2,000 and $3,000, many may feel it makes sense to wait for the Visa mandate and determine what other technology exists at that time, Albertazzi contends.
In contrast, deadlines for ATM conversion were established before point-of sale acceptance deadlines during the EMV conversion in Canada three years ago, Catherine Johnston, CEO of Advanced Card Technologies Canada, tells PaymentsSource. Canada faced deadlines for the conversion of existing ATMs and a date after which no new ATM could be without EMV capabilities, she adds.
“It was the best thing we could have done” in terms of reducing fraud, Johnston contends.
Yet Canada has only about one-third the number of ATMs the U.S. has to convert, Sabah Ammouri, president and CEO of Hazel Park, Mich.-based ATM of America Inc., tells PaymentsSource.
Regardless of card-network mandates, ATM manufacturers are not supplying EMV-ready units to distributors, making the conversion a lower priority, Ammouri says.
“This industry just got heavy blows in regards to [American with Disabilities] mandates, so there were upgrade and compliance costs involved there,” Ammouri notes (
Ammouri says he is “all for fraud prevention,” but the EMV conversion presents a challenge many ATM distributors would have to “put off” because of hardware logistics and financing.
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