ATMs vs.2010 ADA, Thousands of units may not be worth upgrading

[mark handler]

CSP Daily News, June 13, 2011

ATMs vs. ADA

Thousands of units may not be worth upgrading to meet 2010 ADA requirements

LOUISVILLE, Ky. -- Some 54,555 ATMs may not be worth upgrading to meet 2010 Americans with Disabilities Act (ADA) compliance requirements because the machines do not meet their financial institutions' minimum standards for profitability, Leon Majors, president of the Payment Systems Practice of Phoenix Marketing International, said during a webinar hosted by ATMmarketplace.com and sponsored by Diebold Inc.

Majors said 34,855 ATMs operated by independent ATM deployers (IADs) and 19,700 ATMs operated by financial institutions (FIs) either will have to be upgraded, replaced or removed because they do not have a sufficiently high monthly transaction volume to make the machines profitable to their owners.

A bank-owned ATM must have a volume of around 1,200 transactions per month to reach the machine's financial breakeven point. An IAD-owned machine must have 100 to 200 monthly transactions to meet the machine's financial breakeven point based on 2010 data, Majors said.

The U.S. Department of Justice (DOJ) requires that by March 15, 2012, ATMs meet physical access and communication standards. At that point, the 1991 ADA guidelines are no longer in effect, said Dean Stewart, Diebold's senior director of advanced solutions product management.

The new ADA regulations became law on March 15, 2011, when the new rules were published in the Federal Register, but the Department of Justice gave ATM deployers one year to implement the new guidelines.

According to the federal government, the top of an ATM cannot exceed 48 inches in height or be lower than 15 inches off the ground. The ATM owner must provide an unobstructed accessible route to the ATM. The ground space near the ATM must be 30 inches by 48 inches to allow for a person to maneuver in a wheelchair. If the ATM is located in an alcove, the forward approach must be 36 inches wide by 24 inches. A parallel approach alcove must be 60 inches wide by 15 inches minimum.

The ADA communications elements require that the ATM must be speech-enabled to accommodate the visually impaired and individuals who have mobility issues and cannot effectively block the screen with their bodies for privacy.

At least one tactile bump must appear on each discernible input control and numeric key in a 12-key ascending or descending telephone keypad. Function keys must contrast visually from the background surfaces. The following function keys must have tactile symbols: "Enter" or "Proceed" keys must have a raised circle; "Clear" or "Correct" key must have a raised left arrow. The "Cancel" key must have a raised X; and the "Add Value" key must have a raised plus sign and the "Decrease Value" key must have a raised minus sign.

The ATM's display screen must be visible from a point located 40 inches above the center of the clear floor space and the screen's characters must be in a sans serif font. Characters must be a minimum of 3/16 of an inch high. Specific Braille instructions for initiating the speech through the headphone jack must be fixed on the ATM near the jack.

The major changes that were not included in the 1991 ADA guidelines concern privacy, Stewart said. Once an ATM user plugs in a headphone, the machine will ask the user whether he or she wants the screen to go blank. This is known as screen blanking. This process prevents someone standing in line behind the user from "shoulder surfing." The user then would continue the transaction through voice instructions, Stewart said.

The 2010 guidelines also require the ATM owner to offer instructions in Braille on the headphone jack, he added. The new standards also restrict protrusion limit, such as a writing desk at the ATM. The desk cannot extend more than four inches from the ATM, Stewart said.

Depending on the company, an owner may decide to upgrade the machine, replace it or risk not doing anything in the hope that the ATMs do not catch the attention of the DOJ or private citizens who could file lawsuits against the owner. If the company is planning to install ATMs in a planned building, they must meet the 2010 ADA guidelines. If the ATMs do not meet the 2010 guidelines, a building inspector may not approve the building construction plans.

Stewart encouraged ATM deployers to develop a five-step plan to meet ADA guidelines, ATMmarketplace.com said. This includes taking an inventory of the ATM network to determine if the machines are compliant with the 1991 ADA guidelines, comparing the ATMs' 1991 standards with the 2010 standards, consulting an ATM vendor, establishing a budget and periodically reviewing the plan.

Majors said there are 225,000 FI-owned ATMs, and 97,000 of them are in full compliance with ADA requirements; 150,000 FI-owned ATMs meet the audio requirement, but 75,000 FI-owned ATMs do not have audio jacks based on 2010 data, he said.

There are 215,000 IAD-owned ATMs, and 65,900 IAD-owned ATMs are in ADA full compliance, and 140,676 IAD-owned ATMs have met the voice requirement. But 74,324 IAD-owned ATMs do not have audio jacks based on 2010 data, Majors said.

He added that 10,000 to 15,000 IAD-owned ATMs could be removed in addition to the normal replacement cycle of 30,000 machines annually. As for FIs, 10,000 ATMs could be removed in addition to the normal ATM replacement cycle, which is more than 20,000 machines annually.

So what happens if an FI- or IAD-owned ATM does not meet the ADA requirements by the March 15, 2012, deadline, asked ATMmarketplace.com?

"There's no ADA police," Stewart said. "The machines will continue to operate. No one is going to put black and yellow tape over the machine."

Majors said, however, there is a strong financial incentive for FIs and IADs to meet the ADA guidelines. "There are 50 million to 65 million people, or 16% to 22% of the nation's population, who have declared they are visually disabled, hearing impaired or unable to easily move around," he said. "It would be good if [the number of] people with physical impairments would get smaller, but it looks as though the numbers will get larger."

Click here to register to download the ATMmarketplace.com webinar.

 

[Frank]

This is a big headache and expense for Credit Unions and Banks.

Disclosure--I am on the board of our Credit Union.

Some of our Credit Union's ATMs are not upgradeable and will have to be replaced, others will require expensive upgrades with new keypads, facings, voice module, etc. At least one of ours will be changing from a full service with the ability to accept deposits to a cash dispensing only machine.

Changing regulations are putting significant cost burdens on small to midsized financial institutions. New regulations are coming on line monthly.

This is going to put a lot of usable machines with signigicant life left on the junk pile, just like the cash for clunkers program put a large number of usable affordable cars in the junkyard that is now being felt with the rising cost of used cars

 

[Mr. Inspector]

how much would it cost to hire 24-7 bank tellers to repace the ATM's?

 

[mark handler]

Too much....

 

[Frank]

"If you see it when you go to a bank you use the ATM, you don't go to a bank teller. Or you go to the airport and you use a kiosk instead of checking in at the gate,"

President Obama

http://www.realclearpolitics.com/video/2011/06/14/obama_atms_contribute_to_unemployment_for_eliminating_tellers.html

 

[mtlogcabin]

Never used one, never will.

I prefer personal service.

If they are not profitable to upgrade and will be taken out of service like pay phones that is a business decision.

normal replacement cycle of 30,000 machines annually.

Seems if left alone the market would take care of the upgrades by itself in about 7 to 10 years.

 

[brudgers]

Never used one, never will. I prefer personal service.

Holy crap!

I haven't done an in person transaction which could have been done by ATM in more than 20 years - I guess I'm just enamored enough with standing in line during banking hours.

Have you tired self-service gas yet?

 

[Coug Dad]

I wonder if tellers throughout the world are grateful?

 

[mark handler]

http://www.digitaltransactions.net/news/story/3159

ADA Rules, Skimming, And Windows Conversion Are Top ATM Priorities, Study Shows

Aug. 15, 2011

Bank ATM managers have slain one dragon, a transition to better data protection with the widespread rollout of the Triple Digital Encryption Standard. Some 99% of ATMs now use Triple DES, according to Aite Group LLC. But according to new survey results, ATM managers are still fighting several others, including compliance with new Americans with Disabilities Act (ADA) requirements as well as skimming and a still-incomplete transition to the Microsoft Corp.’s Windows operating system.

The findings come in a report from Aite based on a second-quarter survey of executives from 20 of the nation’s 150 largest banks that in aggregate manage 55,902 bank-owned ATMs, or 20% of the nation’s total. Aite compared this year’s results with those from a similar study it did in 2009.

Compliance with government regulations and industry standards ranked top among 15 issues for which Aite asked the executives to rate on a scale of one, for not at all a priority, to five, for high priority. Ninety percent said “maintaining compliance” was a priority or high priority. Much of that priority arises from the need of ATM deployers to meet new requirements in 2010’s update of the ADA that took effect in March and have standards for new construction and alterations that are effective March 15, 2012.

Aimed at making ATMs more usable for disabled people, the standards set specifications for speech output, keypad controls, screen displays, and Braille instructions. Meeting the specifications will require upgrades in both hardware and software, says David Albertazzi, senior analyst at Boston-based Aite Group. New ATMs typically meet the standards, but older ones, especially those still running International Business Machines Corp.’s now discontinued OS/2 operating system, often need both software and hardware upgrades, he says.

Recognizing the priority ATM managers place on ADA compliance, the ATM Industry Association (ATMIA) last week announced it is offering a compliance guide compiled by Tremont Capital Group, a consulting firm that specializes in the ATM business.

ATMs running Windows systems have much more graphical and user functionality (they can allow users to pre-set transaction amounts, give language preferences, and send e-mail receipts, for example) and have steadily gained market share in recent years, but a fair number of OS/2 machines remain. Aite found that 16% of the machines in its survey base still use the IBM system, down from 29% in 2009. For both years, the rest of the machines are Windows-based. OS/2 machines. While small institutions that don’t have deep technology resources were more likely than big banks to have ATMs remaining on OS/2, Albertazzi says he was a little startled that so many machines still use the old system. “You’re talking about mid-‘80s technology so yes, it is still somewhat surprising,” he says.

After maintaining compliance, managing risk is high on ATM managers’ minds, cited by 85% as a priority or high priority at their institution. And 70% said they were concerned or extremely concerned about ATM skimming, double the number with such concerns in 2009. This increase comes against the backdrop of a steady stream of media reports about skimming, with skimmers becoming more sophisticated and harder for cardholders to detect. In addition, 60% of Aite’s respondents were concerned about the use of counterfeit cards at ATMs, up from 41% in 2009. “There is a fairly large concern around fraud at the ATM, and the interesting thing is that there are more kinds of new threats that were not present in 2009,” says Albertazzi.

Some 31% of the ATMs covered in the survey had an anti-skimming solution in place last year. Respondents estimated the number covered would rise to 40% this year and 45% in 2012.

In other findings, respondents representing 12% of the survey’s ATMs said their machines could accept envelope-free bulk-check deposits in 2010, with the share expected to increase to 17% this year and 26% in 2012. Conversely, 73% of the represented ATMs took envelope deposits in 2010. The respondents expect the number to decline to 66% in 2011 and 59% in 2012.

Forty-one percent of respondents said their senior management regards their ATM channel as a differentiator, up from 27% in 2009. On the flip side, only 32% said senior management regarded ATMs as a “table stake,” or a service the bank should have just to be competitive with rivals, down from 50% two years ago. Some 23% of banks consider their ATMs to be a profit center, unchanged from the earlier survey, while 5% this year regard ATMs as a “necessary evil,” up from 0% in 2009.