This article appeared in the C-store Self-Service Executive Summary, Spring 2006.
Visa and MasterCard deadlines have come and gone, but many convenience store ATMs have stayed the same: They're still not Triple DES compliant.
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WRG is one such manufacturer. Rather than replacing a Tidel or Triton for upwards of $3,000, c-store operators can upgrade legacy machines for about $700. Third parties and manufacturers are working to sell c-stores on the upgrade idea.
WRG, for instance, is giving upgrade kits to operators who sign up with WRG for transaction processing, Ribelli said. Other companies are offering early-bird specials and discounts on additional products with the purchase of upgrade kits.
A market focus
Different companies are focusing on different segments for Triple DES business.
Cincinnati-based The ATM Exchange is selling hardware upgrades for bank-oriented NCR and Diebold models. Those upgrades — designed for ATMs that would cost between $8,000 and $25,000 to replace — are selling for about $2,000, said ATM Exchange president David Parlin.
"Diebold's and NCR's solutions include the keypad and software. Our solution is strictly hardware. The other solution: We have a Triple DES upgrade that upgrades machines to Windows or TCP/IP."
Grand Prairie, Texas-based Pi Systems International also sells NCR and Diebold ATM upgrades, and is developing a Fujitsu upgrade, president Sabrina Turner said.
Turner said most of Pi Systems' clients cannot afford to purchase new ATMs. Now she and other third-party providers are working to get the word out about more affordable upgrade alternatives.
"Our upgrade kit includes a PIN pad replacement, and then we have a small router that fits between the communication device and the ATM," she said. "The customers are able to keep the software that they have and the hardware that they have. It saves these ATM owners thousands and thousands of dollars on Triple DES."
Compliance makes sense
Beyond cost, a number of c-store operators have hesitated on compliance because they don't understand the necessity driving Triple DES. Once c-store operators understand how Triple DES works to secure transactions, they see why compliance is so important, Ribelli said.
Additional security is an important weapon against fraud.
"(Triple DES) does provide an increased level of security," Ribelli said. "The odds are exponential, into the trillions, of trying to ascertain someone's PIN number through a Triple DES exposure."
Six years ago, developers at The Electronic Frontier Foundation cracked single-DES-encoded PINs in less than 24 hours during RSA Laboratories' "DES Challenge II."
"Criminals are smart these days," Ribelli said. "But Triple DES is difficult, if not impossible, to circumvent."
Experts don't expect fines for non-compliance from Visa or MasterCard anytime soon, but failure to comply could make service providers vulnerable to litigation.
