An ATM management company has failed to make necessary payments to the ATM networks as well as to service its loan debt. Paramount Management Group has shown significant financial trouble in the past year, leading to insolvency and closure. While you may not know Paramount Management Group, you are probably aware of some of the smaller ATM ISO companies such as First Regents, CKE, and Sharenet, that have been acquired by Paramount in recent years.
Now that this financial failure has caused the organization to completely shut down, ATMs that Paramount was managing for clients are all out of service with the cash removed from the units. Many of the original ATM ISO owners are trying to pick up the pieces. However, the company that they sold to Paramount is now just part of a failed larger management company that has had its doors shuttered by the federal government.
Some of you affected by Paramount‘s inability to operate ATMs have been in contact with different pieces of that organization. Unfortunately, there is nothing anyone can do to rectify the situation. The original ATM ISO companies have no control over the situation or any legal rights over the agreements, cash or equipment. So, what can you do?
Many financial institutions suffering from this situation are in this position because when they sourced out to an ATM management company they chose the lowest cost option. While everyone wants to save money, it is much more important to understand the viability of the potential partner and compare the technology being offered. Just as not all ATMs are created equal, neither are all ATM management companies nor all ATM software and support.
Many ATMs used by these smaller ATM companies have smaller, less secure vaults. Vaults that can be broken into with a crowbar. In addition, the software used to operate and protect these ATMs lacks the sophistication to prevent malware attacks like the “man in the middle” attack that criminals have used to force ATMs to dispense all the cash within the unit. When a vendor spends less on hardware and doesn’t invest in proper software to secure the ATM, it can offer a cheaper fee to a client, but at what cost to customers? Many ATMs operated by these smaller companies have significant vulnerabilities and the companies lack the financial backing to defend against significant losses.
When choosing an ATM partner, you need to look beyond price and dig deeper into the hardware and software considerations. It’s also important to understand the history, resources, and stability of the company itself. Paramount isn’t the first ATM company to go belly-up. There have been several ATM companies that suffered significant financial losses in the past two to three years. Make sure you consult with your league representatives to understand your options for your ATMs.