ATM Exchange Sees Worldwide Market for New Triple DES Upgrade

The ATM Exchange, a supplier of ATM parts and service, will begin selling next month a retrofit product for older ATMs that upgrades them to run on Microsoft Corp.'s Windows operating system. The product, called 3DES Plus XP, also renders ATMs compliant with so-called triple-DES encryption requirements laid down by the bank card associations and other networks for ATMs, point-of-sale terminals, and other PIN entry devices. The DES encryption standard refers to the algorithm by which PINs are scrambled at terminals when consumers enter them. Hoping to capitalize on ATM deployers' thirst for Windows capability as well as their need to comply with networks' encryption mandates, the Cincinnati-based company plans to sell the new upgrade for $3,600, beginning with a marketing push in Mexico and Australia. A new ATM, by contrast, typically lists for around $20,000. Paul T. Dunphy, vice president of corporate sales, expects ultimately to pick up sales from around the globe, including the U.S. Indeed, Dunphy sees a worldwide market potential of 100,000 ATMs for the product. “If we hit 10% of that I'd be happy,” he says. The company is initially emphasizing foreign markets, Dunphy says, because the new upgrade is targeted at ATMs made by NCR Corp., which has a dominant market share overseas. Most ATM manufacturers are now shipping machines featuring a stripped-down version of Windows XP that allows the devices to handle transactions and perform functions older ATMs either cannot do or can do only with time-consuming programming, including TCP/IP connections, advanced graphics, and on-screen advertising. Manufacturers started to embrace Windows last year when IBM Corp. announced it would no longer support OS/2, the operating system that had been the standard on older ATMs. The new upgrade follows by nearly a year a similar kit ATM Exchange introduced last year that offered only the triple-DES capability. That product, which the company sold for $1,950 ($1,600 to other re-sellers), has won certification from a dozen networks so far. It also became the first such upgrade to win a coveted Class B certification from Visa (Digital Transactions News, Aug. 30). Class B covers the numerical keypad for entry of personal identification numbers as well as the display screen and manufacturer's firmware, which is the code controlling the ATM's security functions. Visa's lesser Class C designation covers only the encrypting PIN pad, or EPP. The new product, which also allows deployers to perform remote key management, features software from KAL, Edinburgh, Scotland, and will be available first for NCR 5600, 5800, and 5305 models.