1. ATM Industry Issues and Updates
the ATM Industry Association
ATM Industry Issues and Updates
Federal Reserve Board of Governors Meeting – April 6, 2017 1 1

2. Agenda ATM Industry Issues and Updates 1 Introductions and overview 2
ATMIA – who we are and what we do 3
Dodd-Frank and Durbin – repeal/reform? 4
Withdrawal fraud (Reg E) 5
Continuing EMV concerns 6
Questions/discussion

3. Benefits of Membership
A global trade association of over 8,000 members
Representing the interests of all ATM operators/acquirers and other stakeholders
An extensive library of Best Practice manuals
Compliance monitoring services
ATMIA Academy; e-training and certifcation
Global benchmarking study bi-annually
Industry advocacy
Annual security survey
Working committees focused on security and compliance
A leadership role in the industry regarding payments and financial self-service
Broad industry constituency
Financial institutions
ISO/IAD
Manufacturers
EFT networks
Payment processors
And many others . . .

4. ATMIA membership
Representing the entire ATM industry

5. ATMIA partnerships
Collaboration and cooperation with many other groups

6. ATMIA industry engagement
What we are working on . . .
Celebrating the 50th anniversary of the ATM
A big part of our annual conference in February
Daniel Gonzalez spoke on payments improvement
Focused on innovation and what the future may hold
Also the 20th anniversary of ATMIA
Committee groups
ATM Acquirer Transactions Forum
Next Generation ATM Architecture
Cash, security, many others . . .
Considering a new security conference in the U.S.
Focused on physical and logical security for ATMs, cash, transactions

7. ATMIA industry engagement
What we are working on . . .
With the Federal Reserve . . .
Active member of the Faster Payments Task Force
Invited to be a panelist on the Mobile Payments Innovation Workgroup this January in Boston
Today’s meeting, and two previous since 2014

8. ATMIA industry engagement
Regulatory activity at the state level
All members have free access legislative monitoring and compliance services for all 50 states, Washington DC, and Puerto Rico
State activity has grown considerably
The majority is related to TANF/EBT payments
So far this year, received 184 alerts
ATM related, proposed legislation
Even some major cities
Many are very intrusive
Where in store the ATM must be located
50’ clear perimeter if outside
Direct line to services

9. ATMIA industry engagement
Recent regulatory challenges – one of our “favorites”

10. Dodd-Frank, Durbin uncertainty
Some sort of reform appears to be likely
ATMIA is not taking a position on whether Dodd-Frank or the Durbin Amendment should be repealed or reformed
More concerned with what it looks like when it’s over
Market forces should be permitted to work
Primary issues are long-standing concerns that stifle competition
ATM operator routing choice; multiple networks
Surcharge (convenience fee) caps
Variable (discriminatory) surcharging
So-called “honor all cards” rules

11. Withdrawal fraud Fraud and abuse of the Reg E dispute process
ATM withdrawals
Numerous withdrawals, numerous ATMs, legitimate card and account
Operator notified
ATM operator is notified of the claim and process
Claim resolved
Operator rarely recovers full cost; no consequences to fraudster
Day >60
Day >66
Claim closed
Day 0
Day >61
Day ??
Day 180
Claim filed
Fraudster waits as long as rules allow, files non- dispense claims for all transactions
Operator response
The operator often has only days to respond; fees incurred

12. Withdrawal fraud
Fraud and abuse of the Reg E dispute process
ATMIA research in 2015 indicates that this is a $20 – 25 million issue annually
About 20% of all non-dispense claims are fraudulent
Often 10 – 20 such claims from same cardholder
No real progress to date in finding a resolution
Revenue stream for many networks
Issuer suffers no losses if off-us
No real consequences to the cardholder
Need for some sort of penalty or disincentive

13. EMV issues and concerns
No real changes or improvements
The same concerns over EMV still exist
Proprietary technology controlled by the global card schemes
Designed to favor those global card schemes
Having a negative impact on competition
"Integrated Chip Payment Standards: The Next Generation” meeting held in December, 2013, at FRB Philadelphia
Significant support for a new chip standard
ATMIA and other industry groups will push for EMV to be an open standard with public governance
In the process of creating a Position Paper
Improve chip security and advance the technology

14. Thank you
Questions/Discussion

15. ATM Industry Association (ATMIA) David Tente Executive Director, USA, LATAM
@ATM_industry
ATM Industry Association