Several legal and regulatory frameworks are expected to come in the pipeline in 2024 that will have a direct impact on the ATM industry.
The ATM industry is highly regulated due to its relationship with the financial industry. However, there can be a lot of confusion about these regulations.
To provide further clarity, Jack Ford, attorney and owner of JMFord Law Firm, and Kevin Watts, COO of Switch Commerce LLC, discussed current legislation such as TR-31, cashless ATMs, and legislation during an ATMIA conference session beginning February 14. Compliance issues were discussed. Las Vegas until the 16th.
TR-31
Many independent sales organizations and independent ATM operators have been concerned about the TR-31 compliance guidelines, particularly with the encryption compliance deadline for PINs set at January 1, 2025.
However, Watts said this currently only applies to processors, acquirers and issuers, not IADS or ISOs.
“Everything you’ve heard about TR-31 only applies to processors, acquirers and issuers. You won’t mind,” Watts said. “However, it would be wise to upgrade your PIN pad and software to a version that supports TR-31 for an additional level of PIN security. At some point, PCI PINs will be required, with processors, acquirers, and issuers only having to accept new PINs. . encryption.”
Watts also pointed out that if someone could hack your PIN system and you didn’t use TR-31 encryption, you could be liable.
Cashless ATM
The topic of cashless ATMs has made waves over the years due to their use in cannabis dispensaries. They essentially act as point-of-sale devices that act as ATM withdrawals for the network. But according to Watts, these ATMs are a “contradiction.”
“The ATM must print a receipt, display the ISO name and contact information, display approved sponsor bank signage, and disburse cash,” Watts said. “Visa, Mastercard and FIS have condemned the use of their card brands on cannabis and cashless ATMs.”
Currently, card networks do not allow for cannabis purchases, so ATMs that dispense cash are the only viable option.
But many clinics still use these devices, and the industry as a whole has been forced to kick them out.
“This is a huge blow to our industry,” Watts said. “It’s a huge molehill. We’re closing more than 150 a month.”
current regulations
Discussing regulation of the pipeline, Ford said there is a flurry of legislation from states affecting ATMs, most of which are related to cryptocurrencies.
“279 bills have been proposed in various states, 70% of which are cryptocurrency-related,” Ford said. “Because the Fed is not doing anything about this problem.”
There hasn’t been significant progress on the federal side with bills like the Payment Choice Act and the Safe Access to Cash Act, and sponsors are seeking bipartisan support, Ford said.
The biggest issue discussed by Ford is corporate transparency laws, which directly affect ATM business owners, whether corporations or limited liability companies. The bill aims to address the United States’ failure to comply with the International Organization Financial Action Task Force on Money Laundering, particularly the difficulty in identifying owners of corporations and LLCs. . This, in turn, makes it easier for bad actors to engage in money laundering or terrorist financing.
Under this law, anyone with 25% control or significant control over a corporation or LLC must file beneficial ownership information with the Financial Crimes Enforcement Network if the company was started before January 1, 2024. If the business is discovered later, it must be reported within 90 days, and if the business is discovered after January 1, 2025, it must be reported within 30 days.
“They’re really serious about this,” Ford said. He also emphasized that they should be updated regularly if the owner dies or ownership is transferred to another person. “FinCEN wants to know who is behind these companies and who controls them for money laundering purposes.”
Bradley Cooper is the editor of ATM Marketplace and was previously editor of Digital Signage Today. His background is in information technology, advertising, and writing.