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28 July 2011

4G wireless ATM connectivity promises quicker, more secure transactions

This story is excerpted from “An Introduction to 4G Wireless Technology for ATMs,” a white paper available for free download after registration. 

The 4G network, in development the past few years, represents a new standard of wireless communication. Wireless companies are upgrading their networks and introducing chips that will enable equipment, such as ATMs, to function with the 4G system.

Chips designed for 3G will not be compatible with all the features of 4G. 4G aims to be 10 times faster than the existing 3G network, including having a larger bandwidth.

"From an ATM industry perspective, there is little margin for error when adopting new technologies. Confidence in the reliability and performance of the 4G network needs to be gained prior to adopting 4G as a standard,” said Cory Drain, general manager for Australia-based Symstream Technology Group, a company that produces wireless solutions for ATM deployers.

Ultimately, 4G wireless connectivity deployers hope to rival the power of hardwired cable connections. Achieving this goal will require significant capital expenditures by telecommunication carriers in upgrading their mobile network infrastructure to carry the additional data at such high speeds.

Although cellular companies are working toward deploying 4G standards, to this point, many have yet to deploy outside of metro cities, despite all the advertising campaigns. In fact, the 3G network, which 4G looks to displace, still hasn’t completely overtaken areas covered by the 2G network.

The key to the success of an upgraded system isn’t so much speed as it is alleviating network congestion, particularly where data channels take lower priority to voice. Drain likens existing 3G issues with data flow to an upside-down Coke bottle, where the soda is slow to pour out.

Improvements will boil down to the width of a band and how much information can flow through the network. But if data doesn’t go from one point to the other in real time, it will be “no improvement whatsoever,” said Jaspal Sarai, CEO of Symstream.

Impact on ATMs

ATM deployers continually look for ways to extend their reach. Wireless communication has fostered expansion, particularly into areas where establishing wired connections was too difficult, too expensive or simply impossible.

Wireless networks have spurred unparalleled flexibility, too, enabling deployers to position units and move them to wherever power is accessible.

Because file sizes of data contained in wireless ATM transactions are relatively small, experts say existing networks, such as 3G, GPRS and CDMA, already provide quick connections and transfer rates.

As was the case with 3G, deployers were slow to convert, waiting to ensure network reliability and for hardware and software upgrade prices to drop. Besides that, deployers typically want to get roughly seven years from a wireless modem, Sarai said, not just a few years as would be the case in going from 3G to 4G.

“While 4G/LTE (long-term evolution) cellular technology does theoretically offer significantly higher data speeds for laptops and smartphones, ATMs using the new standard won’t benefit from any noticeable benefits in the near term,” said Sam Ditzion, CEO of Boston-based ATM industry consulting firm Tremont Capital Group. “The exception may be advanced functionality ATMs that use data-intensive applications, although we are realistically talking about shaving a second or two off a transaction under the best-case scenario. However, 4G will eventually become the standard and pricing will become more reasonable, until ultimately replaced by 5G standards.”

Eventually, most ATMs will transition, experts say. How quickly that shift will occur depends on the advent of modem chips that provide the reliability ATM companies desire. Such commercial-grade chips compatible with the 3G system just reached the market in late 2010.

“You can deploy new technology tomorrow. However, if it’s unreliable it will tarnish your reputation in the industry,” Sarai said. “That’s something every supplier is cautious of.”

At this point, experts don’t see 4G as an industry game-changer. But that’s not to say it won’t eventually play a significant role. Much of that will hinge on the evolution of ATMs and the sort of functionality next generations of the machines possess.

“It’s coming,” Ditzion said. “Frankly, I wouldn’t rush to it. The incremental benefit isn’t all that material, particularly immediately. …You’re going to use whatever the best thing out there is.”


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