The following questions were used as a guide for the consultations with the financial sector. Included is a summary of the responses received from the sector in response to each question.
- Does the banking sector have an overall national policy specifically relating to ATMs/EFTPOS and in particular their use in gaming venues? If so, does this policy include issues associated with access within a venue, frequency of access to funds and location of machines?
The banking sector operates credit limits on customer credit and debit accounts. These limits reflect the financial capability of individual customers as assessed by banking institutions. Consequently there is no specific national policy relating to access to funds. Rather individual institutions make credit decisions about individual customers.
On an operational basis this translates into limits on the total value of money that can be withdrawn from bank accounts within a 24-hour period regardless of whether access is through an ATM or EFTPOS terminal. No specific limits apply to whether the money is withdrawn in gaming or non-gaming locations. Daily limits of approximately $1000 are normal but can be increased upon request. This limit does not apply to purchases.
A voluntary practice exists on credit cards and their use within gaming areas. Bank operators remove the credit functionality from ATMs that service gaming environments. This is also the case for independent operator Cashcard. This is in keeping with banks acting as responsible service providers within the community.
Wider ATM legislation does exist restraining the placement of ATMs within specified gaming areas. However, as already stated this legislation only relates to the physical location of ATMs and not to access of funds. Equally, EFTPOS facilities are available within certain gaming locations e.g. NSW TAB outlets.
- At what point is legislation/regulation implemented – is it at local bank level or is the responsibility that of the venue, the acquirer or credit scheme?
Retail operators are responsible for ensuring ATMs are not located within gaming areas. In practice, machines are located with the initial support of ATM operators who are also aware of legislation regarding the placement of ATMs.
Within certain states/territories ATM operators within casinos provide deposit functionality. It is a moot point as to whether this is legislated for or is ‘encouraged’ by state/territory governments.
- What is the role of merchant acquirers in the financial transaction process, their relationship with banks and gaming venues and their role in developing software to address regulation?
Merchant acquirer is understood to refer to non-bank ATM/EFTPOS operator. In Australia non-bank operators have successfully penetrated the ATM market but not the EFTPOS market. However, despite their successes non-bank operators are still reliant on banks for access to the ATM clearing system. This sponsorship arrangement is critical as long as non-bank institutions remain barred from direct participation in the clearing system.
Gaming venues represent a good source of income for bank and non-bank ATM operators. Such sites can generate in excess of 12,000 transactions per ATM. This compares to an industry average of approximately 5,000 transactions. But non-bank ATM operators are potentially more reliant on such high volume sites given the ‘more commercial’ nature of their ATM business line.
ATMs are increasingly located away from traditional sites e.g. bank branches. Bank and non-bank operators alike favour high throughput sites. This has generated premium-pricing arrangements between operators and the retailers. Contracts of between 3 and 5 years are commonplace. In such a competitive environment it is the non-bank operators who are increasingly winning out as banks find it hard to commercially justify increased retail pricing arrangements.
If government were to impose further restrictions on ATM access, as of the nature indicated in the background documentation, the main responsibility for compliance would sit with the card issuer. Non-bank ATM operators can remove functionality at the terminal e.g. credit card withdrawals. However, responsibility for the tracking and management of ‘gaming’ transactions sits with the card issuer and not the acquirer. Indeed, even removing functionality from ATMs can be achieved at the issuer level. This potentially removes the need for any upgrades to the actual ATM.
Cash limits, functionality; the card issuer can control differentiation in level of service or product, access – all centrally. This is a more cost-effective approach to addressing access issues.
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- Who sells ATM machines and what is the role of an ATM machine provider i.e. do they design the machine to specification? Do they have any responsibility for implementation of regulation/legislation?
ATM manufacturers deliver machines to the specification as requested by the customer. Clearly they must comply with the latest health and safety standards. Equally, manufacturers are continually developing new models of ATM with enhanced features. However, it is the client who ultimately determines what the machine specification will be.
If legislation were passed requiring certain features to be present on ATMs then clearly the manufacturer would need to comply e.g. certain United States have moved towards an environment where ATMs are required to carry digital video cameras. However, the scenarios currently put forward as part of this research should have no material impact on the manufacturer.
- Do financial institutions hold information on frequency of use of ATMs and EFTPOS facilities in gaming venues and if so is it available?
No. No information is available in specific relation to gaming venues. ATM and EFTPOS volumes are recorded for account management purposes. However, to be able to identify which transactions originated from gaming locations would require new naming standards for terminals located within such environments.
- Can credit cardholders still obtain cash advances through an ATM that has the ‘withdrawal from a credit card account’ option deleted?
If the credit card function has been removed from an ATM then customers cannot obtain a cash advance on their credit account. However, credit cards do enable access to other types of account e.g. savings accounts, mortgage accounts with redraw facilities.
In the latter example a credit card could be used to obtain cash against a credit line eg the mortgage. Legislation would have to be specific to bar these types of transactions if that is the intent of the government.
- Can credit card holders obtain credit funds from ATMs that have the ‘withdrawal from credit card account’ option deleted by going through accounts such as overdrafts, equity access loans and re-draw facilities on home loans? If so, what types of restrictions are possible at gambling venue ATMs using current technology?
Refer to response to Question 6.
It is possible for all terminals located within gaming venues to be classified as such. Transactions generated from such locations would carry the relevant ‘retail code’ allowing the card issuer to identify ‘gaming related’ transactions. Host systems would require changes to be able to process and make decisions based on the new transaction code. Equally, new industry naming standards would be necessary. The naming standards would allow issuers to identify ‘gaming’ transactions generated from terminals operated by third parties.
- Regardless of commercial viability:
- Do all or any financial institutions have the capacity to limit individual withdrawals per time period through ATMs and/or EFTPOS for persons requesting this service?
All banks operate daily limits re: cash withdrawals. These limits are normally in the region of $1000 per day. This limit applies to withdrawals made via EFTPOS and ATM.
- Do all or any financial institutions have the capacity to set withdrawal limits per transaction on EFTPOS and/or ATMs at individual gaming venues or specific group merchants?
A new industry-naming standard would be required. A general category could be developed for gaming locations. Then sub-categories could be developed to identify particular types of establishment eg casinos, hotels, TAB.
- Do all of any financial institutions have the capacity to set withdrawal limits per time period on EFTPOS and/or ATMs at individual gaming venues or specific merchants?
Refer to 8(a).
Gaming credit limits could be established within the overall daily withdrawal limit. However, as well as new naming standards, banks would need to develop their core systems. All transactions identified as originating from gaming locations would be placed against the daily gaming limit.
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- In each of the above (Q8) if there is a capacity to set these limits, are these limits set by financial institutions or can they be set by individual merchants and can the limits be varied to suit individual circumstances?
Card issuers will set the daily account limits for customers.
Merchants can operate ‘floor’ limits for amounts under a certain value. Floor limits are agreed with the retailer’s bank.
Individuals can request their bank to put in place non-standard limits.
- Do all or any financial institutions have the capacity to implement the following model:
‘Set a limit of one withdrawal per day at a gaming venue up to a maximum of $200 (or such other amount). That is, once a withdrawal of say, $50 had been made, no other withdrawal could be made from that ATM or other EFTPOS facilities at that venue for the rest of the day.’
If the new naming standards were in place, banks could apply a limit for all transactions generated in gaming locations.
- Can ATMs and/or EFTPOS differentiate between Australian and overseas credit cards? If so, is it possible, using current technology, to restrict access by Australian cardholders while allowing overseas cardholders access? What are the options for future technology use?
Banks can already differentiate between domestic and foreign issued credit cards. The cards themselves carry code on the magnetic stripe that identifies them as such.
ATM operators can block credit cards at the ATM i.e. if a domestic credit card is inserted in the ATM then the ATM can refuse the card immediately.
- Is it possible for ATMs to provide ‘screen statements’ of spending over a given period, using current or future technology?
ATMs already provide printed ‘mini-statements’. These statements are not full statements and only provide details of the most recent transactions. ATMs can also support ‘balance’ enquiries on accounts.
In the UK Midland Bank deployed machines that supported screen statements. ‘Statement machines’ provide the full monthly transaction history.
There is no technical reason why the functionality of statement machines and ATMs could not merge. However, the industry does face the on-going challenge of balancing the provision of cash against other services.
- Is it possible to restrict gambling venue EFTPOS machines so that there is no cash withdrawal or a withdrawal limit? If so, is this commercially viable?
Technically it is possible to achieve either scenario. Indeed, the latter example is the strategy currently adopted in South Australia. However, the issue is whether operators can implement such strategies and remain commercially viable.
The South Australian example has illustrated how increased operating costs can effectively remove smaller operators from certain business lines. Physical upgrades to terminals can mean the difference between profitable and non-profitable EFTPOS terminals.
Any further restriction of EFTPOS access, whether requiring software, systems or physical upgrades, will force all operators to review the provision of this service. It can be anticipated that certain operators would withdraw from certain business lines rather than bear the expense of upgrade costs.
- In general - is current ATM/EFTPOS technology available that is not being utilised, that could assist in minimising spending by problem gamblers?
Banks have access to technology (velocity checking) that identifies ‘patterns’ of transactions. This has historically been used to identify fraudulent transactions. Such technology could be applied to transactions originating from gaming locations. However, as already mentioned, new naming standards need to be in place to identify gaming venues.
- Do financial institutions have ongoing research into, and development of, ATM and EFTPOS technology and software? If so, are these coordinated and available to all institutions? What type of budget if any, is provided for development of technology and software?
Financial institutions operate ATM and EFTPOS budgets. These budgets cover the on-going operation of the networks, purchase of new equipment and expansion (new business). A relatively small amount of budget is used for development and testing purposes. And each institution will research technology that is relevant to its own commercial circumstances.
Terminal manufacturers invest heavily in the on-going development of technology and software. The financial services industry as a whole benefits from such investment i.e. availability of improved terminals. Manufacturers might also take the lead on innovative new features eg digital cameras within ATMs.
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- If new regulations/legislation were introduced would each merchant acquirer and or bank need to develop their own technology for major changes to ATMs/EFTPOS to which they link?
Australian Payments Clearing Association (APCA) is accountable for managing the Australian payments clearing systems. Any naming changes for gaming locations would be handled by this authority. APCA would ensure that all institutions participating in the clearing systems comply with any new regulatory standards on message types. Member banks would meet any costs for development.
Work to host systems and terminals would be the responsibility of the banks. That does not mean that banks would not attempt to recover some costs from merchants eg through higher merchant fees.
- Is there any evidence that financial institutions are developing technologies that may by-pass ATMs and EFTPOS and allow access to credit accounts? If so, would this have any possible application in a gambling venue?
Wireless technology enables customers to access banks accounts via devices such as mobile telephones. 3G telephones will be available in Australia in 2003. Banks will utilise and support this technology as customer demand increases. In the UK Barclays bank provides mobile telephones to its customers at a discount price.
The ultimate implication for gaming is that customers will be able to access funds via a mobile telephone and then transmit those funds directly to the gaming machine. This will make redundant any legislation specific to ATMs and EFTPOS terminals.
- It is understood that most, if not all financial institutions are able to set global limits on withdrawals for individuals who request this service. Is it possible for financial institutions to develop technology that would allow a person to set a withdrawal limit (including no withdrawals) on ATMs or EFTPOS located at the specific gaming venue) or all gaming venues)?
Devices within gaming areas need to be identified as being located within a gaming area. It then becomes technically possible to place ‘gaming limits’ on customer accounts. Those limits can be generally applied or individuals could request tailored limits.
- Specifically, what changes to technology would be required (and what are the associated costs) to enable banks to implement limits to ATMs and EFTPOS cash facilities that:
- Limits an amount per transaction
No financial institution is in a position to provide costs associated with all potential scenarios. This would only be possible if the government was to engage in further consultation around specific propositions. Equally, upgrades to technology can only be discussed in detail through further consultation.
Blanket limits can be put in place to restrict an ATM/EFTPOS transaction to $200.
Any requests for further amounts are simply not authorised by the host system.
- Limits the number of transactions per day or per 24 hour period
As above. All banks operate a daily ‘value’ limit of approximately $1000. Rather than track the value of transactions banks could track the volume.
Potentially very significant cost implications with significant work required to core systems.
- Limits per person
Individual limits are already available.
- Limits per card Individual limits relate to specific products.
Individual limits relate to specific products.
One single limit covering all product types represents significant development work. This single view of the customer is what banks have aspired to for 10 years. It is true that banks have made good progress to date. However, a single credit profile is still a good way off for most institutions.
- Limits on account type or card type (credit vs debit card)
Limits already apply to different product types.
- Limits in a) – e) applying to individual gaming venues
As already discussed, a naming convention is required for gaming locations. It then becomes technically possible to differentiate the level of service provided on products in such locations.
- Limits in a) – e) applying to all gaming venues
As above.
- Combinations of the above
As above.
Some examples of different combinations are:
- Limit a person to accessing non-borrowed funds only, up to a maximum amount per person per 24-hour period in all gaming venues in a State/Territory. (i.e. A person is limited to one withdrawal transaction per day at Hotels up to $200. The ABC hotel has one ATM and 3 EFTPOS facilities. A person makes a withdrawal of $50 at the ATM on his ANZ savings card. The person should not be able to access any further funds at any of the other facilities in the hotel with the same or other cards and should not be able to access funds at another hotel for the next 24 hours)
The above scenario is only possible if the customer only has cards issued by the same institution. And only then if the institution is able to establish a single view of the customer i.e. can identify and track activity across all product types and channels.
If a customer holds cards issued by more than one institution then a central switch is required. The central switch would need to monitor all transactions using a unique customer ID. No central switch exists and no unique customer ID exists.
Once the single view of the customer is established then transactions can be tracked. However, the new naming convention is also necessary to establish gaming locations.
- As above but limits only apply to a single venue
Once the central monitoring capability is established then it is irrelevant whether transactions originate either from one or multiple gaming locations.
- Maximum withdrawal limit, per card, per day (i.e. limits only last until midnight and then resets), per gaming venue
As above. The only issue is one limit per gaming venue. If a customer visits a number of locations then the system needs to carry a number of fields to accommodate each location.
The above three examples assumes that ATMs and EFTPOS facilities are linked in a way that for example, a withdrawal from an ATM at a venue is recognised by the EFTPOS at the same or other venue for the purpose of establishing an overall limit either at that venue or all venues.
ATMs and EFTPOS work off central systems. However, there is currently no facility to track and monitor transactions generated
from specific locations. The only limit in place is the $1000 cash withdrawal limit.
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- Following on from Question 19, to what extent could the following limits be implemented by (and what are the associated costs of) altering the design of / reconfiguring ATM/EFTPOS facilities located in gaming venues? 86
The banks are not presently in a situation to provide costs on individual solutions. Further consultation with the industry would be required.
Limits on an amount per transaction
This tactic is straightforward and in keeping with current State legislation.
Limits on the number of transactions per day or per 24 hour period
As already stated, this requires banks to track the volume of transactions and not the value. This potentially requires significant work.
Limits per person
As above. $1000 daily cash withdrawal limit is already in place.
Limits per card
As above. Limits per person relates to limits per product. If a person has more than one product then the daily limit is increased.
Limits (and prohibitions) on account type or card type (i.e. credit and borrowed funds)
As above.
The above limits should be assessed in the following combinations:
- Limit a person to accessing non-borrowed funds only, up to a maximum amount per person per 24-hour period from all ATM/EFTPOS facilities located within a gaming venue.
As already stated, monitoring capability needs to be established along with a naming convention for different types of gaming location.Once this is in place any number of different controls can be applied.
- As above but limits only apply to a single ATM/EFTPOS facility
As above.
- Maximum withdrawal limit, per card, per day (i.e. limits only last until midnight and then resets), per all ATM/EFTPOS facilities within a gaming venue.
As above.
- As above but limits only apply to a single ATM/EFTPOS facility.
As above.
- Any other relevant combination.
As above.