For decades the term “Independent System Operator” (ATM ISO) has been the go-to call-name for a number of business models, including those operators who own, deploy, sell and rent terminals. Last year, as the ISO became more actively became involved with the ATM Industry Association(ATMIA), industry powers-that-be decided that the time had come to give deployers a more specific identifier than ISO, and the new term “Independent ATM Deployer” (IAD) was coined in the ATM Services Industry.
Differentiating an ATM ISO from an IAD
ATM ISO, a general term, encapsulated several different businesses and included those who might have been ATM deployers. The term “IAD” distinguishes between multiple merchant ISOs and ATM ISOs. IAD, a term already used for several years in the EU and UK markets, seemed a perfect reflection of the economic strength among the ATM business professionals in the US. Of the over 400,000 ATMs deployed in the nation, about 50 percent are off-premise examples installed by IADs. Distinguishing IADs, this group owns, deploys, sells and connects nearly half the machines in the US–meaning the owners of these machines adhere to a very specific set of standards required in order to become IADs.
To dig deeper into IAD responsibilities, the IADs group is required to maintain network and bank sponsorships, network and bank compliance, and support all associated costs out of pocket. For the IAD, the network acts as a link between the terminal and the issuing card bank, making transactions possible. So, network and bank sponsorship are critical elements required of an IAD that may not be required of an ATM ISO.
The IAD and Compliance Requirements
IADs are also required to uphold strict compliance to both network and bank regulations, both locally and nationally, in order to assure all involved parties are fostering clean transactions. To start, IADs are responsible for banking application fees, network registration and renewal fees, federal and state registration fees, bank sponsorship fees, insurance, and the costs associated with employees, compliance fees, and payment processing services. Some of these requirements for compliance also include:
- Due Diligence
- Owner-Operator Agreements
- Quarterly Reporting
- Compliance Mandates
- FFIEC Reporting
The ATM ISO Community and IAD Adoption
The term “IAD” ultimately implies adherence to a regulatory standard that might not be promised by the more generic ATM ISO, and gives deployers a stronger, more unique voice in the community. The larger idea behind the change is in creating a sense of professional identity that promotes unity and business growth, which in turn adds cache to the business model as a whole, where the larger objective is to use the IAD designation to create new in-roads and stronger ties with networks and banks alike. As IADs are more fully distinguished from ISOs, networks and banks will identify them with their own structures, standards, and regulatory ideals, and will be more likely to look positively on partnership opportunities.
What Does the Future Hold for IADs?
In 2010, the ATMIA created the IAD committee to be a connector and a voice for the issues the IAD community faces—speaking to the membership of the ATMIA at-large to drill into channels of positive growth and more profitability. Many IADs have already registered as a new class of ISO, now offering information that will benefit the entire association from a perspective much stronger than was previously possible using the generic “ATM ISO” moniker. It’s a change with an eye directed at the success and dynamic growth of the ATM Processor and IAD model.
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