asterCard and Visa's compliance deadlines for upgrading older ATMs with the new triple data encryption standard (3DES) will be here sooner than you think-and many banks and owners of these devices are looking ahead to make this change.

Most ATM manufacturers will want their customers to purchase brand new machines, but a company by the name of Pi Systems International, L.P. has a less costly solution.

The deadlines, initiated by the credit card associations, vary according to the age of the ATM and network on which it is running. PULSE and STAR want all ATMs to be 3DES compliant by the end of 2005, MasterCard has set an April 2005 deadline, and Visa's official deadline is still to be announced.

What these deadlines mean is that all ATMs that accept cards with a MasterCard or Visa logo must be using 3DES to send and receive data.

3DES is a data-encryption standard algorithm that encrypts input data three times (versus only one time) so it raises the level of fraud protection for PIN-based transactions initiated at ATMs.

Richard Andrews founded Pi Systems, L.L.C., parent company of Pi Systems International, 13 years ago. The company maintains and services ATMs for banks and credit unions. It also services equipment such as computers, printers, modems, faxes, routers, desktops and laptops for IT departments in government agencies.

Because of the mandates from Visa and MasterCard and the ATM networks, Pi Systems saw there was a need to fill in the marketplace for a product that could quickly and inexpensively upgrade an ATM to become 3DES compliant, so it joined forces with a neighboring company, Greenlink Technologies, Inc. to develop a low cost solution.

In 2002, Andrews created Pi Systems International to further develop and market its idea, which it calls the 3DES FIX, but also to provide technology solutions for present and future industry needs.

Pi Systems International has been growing quickly, and Richard Andrews, Chairman of the Board and the owner of both Pi Systems and Pi Systems International, recognized the need for an executive management team.

He approached Robert Normyle and Jerry Graves, two entrepreneurs with extensive experience in technology start-up companies.

Graves was appointed CEO of Pi Systems International, and Normyle was appointed President.

The 3DES ("Triple-dez") FIX is a 3DES-compliant PIN pad with a companion "router" that forwards the encrypted messages to the modem, Normyle said. There is no need to upgrade the ATM's internal processors to Pentium 233, new monitors or new software from the manufacturer.

"There's some confusion in the marketplace about what needs to be done to an ATM to make it 3DES compliant," he said.

Pi Systems International's 3DES FIX combines a SPED EPP with a device that routes the 3DES-encrypted messages from the PIN pad to the processor. This "router" is bridged between the PIN pad and the modem, therefore not affecting the pre-existing set up of the ATM. Pi Systems' solution targets older ATMs but also satisfies the needs of newer ATMs, he said.

MasterCard physically reviewed the PIN handling and processing methods employed by the 3DES FIX product, and approved it in March 2003 for meeting MasterCard's PIN security requirements and 3DES mandates.

Pi Systems says the 3DES FIX can be installed within one to two hours and costs $3,200. A qualified ATM technician of the bank's choosing can do the installation, which costs about $350.

No further hardware or software upgrade is necessary. The product also comes with a one-year warranty.

The 3DES FIX is designed for Diebold 1060, 1062, 1064i, 1072, 1073, 1074, including the "i" series, MDS and all STP-based units, NCR 50xx series and 56xx series and the Fujitsu 4000 series and 6000 series ATMs. Pi Systems International also plans to expand the solution to fit the Diebold "ix" series early next year.

"As far as we know, we're the only company that is offering this type of solution at this price point," said Normyle.

Normyle said he does not know of any direct competitors of Pi Systems International, although they do compete indirectly with ATM manufacturers, which have different methodologies for providing 3DES.

Obviously, ATM manufacturers would want their customers to replace older machines with brand new ones, he said. But many smaller banks can't afford to do this.

One issue that has come up with the introduction of the product is with ATM manufacturers. Some manufacturers have said they may not honor their maintenance agreements if a product such as the 3DES FIX is added to the ATM, but this presents a unique opportunity for Pi Systems' distributors and ISO partners, Normyle said. "There are a lot of service organizations and maintenance companies that maintain and service ATMs, and they could have an opportunity here," he said.

"We see it as a tremendous opportunity for them to distribute our product and possibly win a maintenance opportunity should ATM manufacturers decide their warranty is null and void because of the addition of a piece of equipment that is not theirs."

Pi Systems International has been working closely with the CO-OP Network, a co-operatively owned network of more than 1,200 credit unions in the U.S.

They offer surcharge-free ATM access to credit union members. CO-OP Network and eFunds provided input in the development of Pi Systems' 3DES FIX product. "One of the most beneficial aspects of Pi Systems' 3DES FIX is its ability to replace the non-encrypting PIN pads in older ATM machines," Gene Polito, President EFT Services, CO-OP Network said in a statement.

"Their EPP (encryption PIN pad) extends the security and lifespan of our member credit unions' ATM fleets without requiring purchase of additional hardware or software."

Pi Systems International is truly an international company with marketing partners and distributors across the U.S. and in Mexico, the Philippines, Indonesia, Eastern Europe, France, Germany, the UK and others.

"The product is working very, very well. We've got about a dozen units installed so far," said Jim Loper, owner of Telecom Consultants of America (TCA), which is an exclusive distributor for Pi Systems.

"The reason that there's so much interest in this product is because all it is is a PIN pad replacement. It's so easy and inexpensive to add, so it allows customers to spend their money in other places and still meet the mandate for 3DES."

The product has been well received to date and the company is expecting overwhelming response in the marketplace. In addition to adding an executive management team, Pi Systems International has moved to a larger building and is increasing its capacity.

When a company is offering a unique product with very little competition, and the demand is there and the distribution is being put in place, you have a winning solution, Normyle said .