Many ATM Operators Will Blow Tomorrow’s Upgrade Deadline, But Will That Matter Much?

ATM operators on Monday are literally on the eve of a critical upgrade deadline that many have not met, but some industry sources at least say the situation is far from disastrous.

Microsoft Corp. on Tuesday will stop supporting its Windows 7 operating system, which runs most bank-owned ATMs in the United States and abroad. That means the computing giant will no longer offer technical support, updates, or security fixes for the software, leaving thousands of ATMs in the U.S. market at risk, experts say, if operators haven’t upgraded their machines to Windows 10. “It creates some hypothetical risk. Financial institutions are very nervous,” notes Sam Ditzion, chief executive of Boston-based Tremont Capital Group Inc., a consultant to the ATM industry.

Also, the cost of conversion to the newer OS is estimated at anywhere from $5,000 to $10,000 per machine, a heavy cost for institutions and other operators running fleets of ATMs. And it’s an expense that doesn’t directly bear on making money, which makes it harder to stir a sense of urgency at the top of most organizations. “It’s not like there’s some obvious business case for this,” says Ditzion. On top of that, conversions can be delayed by the strained availability of busy technicians. 

But some observers are optimistic that, while many ATMs will obviously blow the deadline, most will have been upgraded within the next few months. “I get the sense everybody will be over the hump in the first quarter,” says David Tente, executive director for the USA and the Americas for the Sioux Falls, S.D.-based ATM Industry Association.

In part, this sense of optimism stems from the fact that many financial-institution operators may be running late but have had conversions in progress for months. Another factor is that many machines aren’t even affected. That’s because of the tendency of most independent operators to run their machines on Windows CE, an OS that enables cash dispensing but is not typically subject to Microsoft’s periodic upgrade schedules.

For these reasons, observers are optimistic the ATM industry will not see a repeat of the prolonged conversion from Windows XP several years ago. Operators then may have underestimated the cost and time involved in an OS conversion, but an aggravating factor was that “we were doing EMV at the same time,” notes Tente.

With the deadline literally less than 24 hours away, a workaround some operators may adopt, Tente adds, is to stem security concerns by running Windows 7 on top of the open-architecture Linux operating system. “There’s a lot more interest in Linux,” he says.