Hey all, I did a post like this a couple years ago in another forum and was thinking I should drop one here.
Wanted to outline the roles and responsibilities of the different players in the ATM industry.
Many times we use the wrong terminology, which is OK, but thought I would cover the correct players.
Sponsoring Bank – ATMs are a financial product, with any Financial product you need a bank to connect you to the banking system. The sponsoring bank makes sure all banking rules are properly followed, this includes KYC (Know your customer), Regulation E, and AML (anti-money laundering). Some examples in the ATM business is Citizens bank, Pueblo Bank and Trust, and Metabank (now called Pathward)
Processor - The processor sometimes called the acquirer or the Switch, is like air traffic control for transaction processing. They direct the transactions over networks to the card holder’s bank. You know them to be the website you log into to see your transactions and monitor your ATMs. Examples of a Processor are Columbus Data, FIS, and Switch Commerce. I think in 2023 competition for processors will kick up and we may see some new things.
ATM Networks - Networks are like the rails or highways the transactions ride on to get to and from the processor. Networks will work with Cardholder banks to pass the transaction to the authorizer. Some examples are NYCE, ACCEL, PULSE, and PLUS.
Authorizing Bank - This is usually the cardholder’s bank. They approve or deny the transactions based on proper pin, available funds, and card expiration date, to name a few.
ISO – The ISO. (Independent Sales Organization) kind of brings it all together. They have 3 way agreements with Sponsoring bank, Processor, and Networks. The ISO pays over $50,000 a year to be a member of the networks. They are responsible for compliance and onboarding. In the banking world, they are the responsible party. Annually, they are audited by the Sponsoring bank. Ultimately, the banking world looks at them as the ATM terminal owner (this maybe a little confusing). ISOs are becoming increasing fewer and fewer, the cost of compliance sometimes outweighs the benefits. Some bigger ISOs might be PAI, Cord Financial, and Cardtronics.
Sub ISO – this is a non-technical, kind of made up term. The Sub ISO is often someone who recruits IAD and may have a close working relationship with the ISO. They are often trusted by the ISO to board terminals. Sub-ISO’s over the last few years, have taken a bigger role due to the consolidation of ISO. Sometimes Sub-ISO or ISO’s are incorrectly called “the processor or my processor”
IAD – The IAD (Independent ATM Deployer), that’s most of you. You gather accounts, provide vault cash and work with your ISO or Sub-ISO.
Hopefully this post will help understand the ATM world and spur conversation.
Wanted to outline the roles and responsibilities of the different players in the ATM industry.
Many times we use the wrong terminology, which is OK, but thought I would cover the correct players.
Sponsoring Bank – ATMs are a financial product, with any Financial product you need a bank to connect you to the banking system. The sponsoring bank makes sure all banking rules are properly followed, this includes KYC (Know your customer), Regulation E, and AML (anti-money laundering). Some examples in the ATM business is Citizens bank, Pueblo Bank and Trust, and Metabank (now called Pathward)
Processor - The processor sometimes called the acquirer or the Switch, is like air traffic control for transaction processing. They direct the transactions over networks to the card holder’s bank. You know them to be the website you log into to see your transactions and monitor your ATMs. Examples of a Processor are Columbus Data, FIS, and Switch Commerce. I think in 2023 competition for processors will kick up and we may see some new things.
ATM Networks - Networks are like the rails or highways the transactions ride on to get to and from the processor. Networks will work with Cardholder banks to pass the transaction to the authorizer. Some examples are NYCE, ACCEL, PULSE, and PLUS.
Authorizing Bank - This is usually the cardholder’s bank. They approve or deny the transactions based on proper pin, available funds, and card expiration date, to name a few.
ISO – The ISO. (Independent Sales Organization) kind of brings it all together. They have 3 way agreements with Sponsoring bank, Processor, and Networks. The ISO pays over $50,000 a year to be a member of the networks. They are responsible for compliance and onboarding. In the banking world, they are the responsible party. Annually, they are audited by the Sponsoring bank. Ultimately, the banking world looks at them as the ATM terminal owner (this maybe a little confusing). ISOs are becoming increasing fewer and fewer, the cost of compliance sometimes outweighs the benefits. Some bigger ISOs might be PAI, Cord Financial, and Cardtronics.
Sub ISO – this is a non-technical, kind of made up term. The Sub ISO is often someone who recruits IAD and may have a close working relationship with the ISO. They are often trusted by the ISO to board terminals. Sub-ISO’s over the last few years, have taken a bigger role due to the consolidation of ISO. Sometimes Sub-ISO or ISO’s are incorrectly called “the processor or my processor”
IAD – The IAD (Independent ATM Deployer), that’s most of you. You gather accounts, provide vault cash and work with your ISO or Sub-ISO.
Hopefully this post will help understand the ATM world and spur conversation.