ATM software company milking bank accountholders

[Devil Soul]

ATM software company milking bank accountholders
Jawwad Rizvi
Friday, August 05, 2011
LAHORE: The company that provides software solution for automated teller machines (ATM) in Pakistan is allegedly making huge money from accountholders, thanks to it monopoly in the business, sources said.

Sources in the banking industry disclosed that the ATMs in Pakistan are run by a computer programme provided by TPS, a Pakistani company.

TPS has complete monopoly in this area of business and gives its software under proprietary license terms.

The News repeatedly attempted to get the viewpoint of TPS about the issue, but the representative of TPS Shahzad Shahid did not answer the queries sent to him.

He promised to reply, but after getting the queries, he did not answer either phone calls or emails.

All ATMs in Pakistan are connected by order of State Bank of Pakistan so that anyone can use any ATM of any bank to check their balance and take money out.

All proprietary means that the software is not compliant to ISO standards that are adopted globally by all the financial institutions.

Since the software is proprietary, banks and ATM switches like 1Link are not allowed to check, audit or see the software code or even touch the machines that this software is installed on.

TPS is stealing a huge amount of money on a daily basis from bank accountholders. How is this possible? Hundreds of thousands of ATM transactions are made every day. If a virus or special code takes out just one paisa for each transaction, the account holders obviously cannot suspect any wrongdoing. But the company manages to steal a huge amount of money in this way every day from bank accounts.

An official at Competition Commission of Pakistan (CCP) said that an application was received by CCP about monopoly of TPS and it was investigating it.

He further said that after initial investigation it was believed that it was a mega scam in the banking sector.

Sources further said that TPS bribed banks’ IT departments to install its software in banks and avoid audit. Other problems faced by banks due to this monopoly is that when things go wrong they have to wait for long periods for TPS to fix them. It charges them for every change or support. These charges to the banks are passed on to the accountholders as different fees by banks.

They said banks do not have any relationship with TPS, but they still have to pay charges to TPS. The reason is that TPS claims that they own the software installed at 1LINK (the main ATM switch) for bill payment and each entity (any bank) who wants to get connected with 1LINK for bill payment, must pay a licence fee to TPS.

This “system” has been put in place by 1LINK’s initial founders and board and is still prevalent due to the extraordinary bribes paid by TPS to board members of 1LINK. State Bank officials have also been pat of this scheme, sources said.

TPS charges banks in US dollars, although it delivers services locally. This is in violation of SBP’s regulations which it foists on others, but very conveniently overlooks in this case.

The banks that use TPS’s proprietary software are compelled to pay the prices and fees that TPS charges. Due to this proprietary software, banks also do not have any option for comparison and have to pay very high maintenance charges, certification charges, customisation charges, development charges, project management charges, quality assurance testing charges and so on. Apart from these charges, they also give extensive timelines for doing small changes. For example for a two minutes job, TPS takes one month, several meetings and prolonged useless discussions with nil results. They can get away with this because of the closed proprietary format that no outsider can see and comment on.

A spokesman for the central bank said that TPS is the technology partner of many banks (both commercial and microfinance), telecom companies and 1-LINK Switch for e-banking solutions and services. Besides TPS, there are other companies like Euronet and Avanza who are providing similar solutions to banks in Pakistan.

SBP said it has not issued any directives or recommendations to any commercial, microfinance bank and ATM switch operator to obtain any specific application or solution from any specific service provider or software house.

SBP has, however, issued general regulatory guidelines for compliance by banks and development finance institutions while acquiring services under outsourcing arrangements.

The ownership of source code, enhancements and up-gradation of applications is based on the service or licence agreement signed by banks with the service providers. Being intellectual properties, all software products differ in terms of their design and structure. Financial software systems have standard interfaces, which follow a set of international recommendations that make them interact with one another. “To the best of our knowledge, TPS, Avanza and Euronet solutions are integrated with all major domestic as well as international systems in Pakistan and globally for offering e-banking services and this could only be possible by adhering to variety of international standards for messaging interchange,” SBP said. International networks follow globally accepted specifications for integration, it added. It, therefore, implies that the applications developed by TPS, Avanza and Euronet are compliant with global standards operational norms, said SBP. Periodically, a comprehensive on-site inspection of network switches and companies is conducted during which applications such as TPS are inspected and audited thoroughly in the light of industry norms, international operating standards and best practices with a broad security perspective. Possibilities as indicated of siphoning of money are speculative and not possible in the manner depicted in the complaint, said the SBP.

The SBP has not received any complaint from any bank of having been prohibited by a service provider such as TPS from obtaining solutions or applications from any other vendor in Pakistan or abroad. It is bank’s own decision to either use TPS or any other ATM controller.

It has to be understood that SBP does not interfere or prescribe a certain course of action to any bank on its business decisions or best technical solutions and resorts to placing certain limitations on banks only for preventing adverse impact on accountholders.

“The indicated possibilities of collusion hardly merit an answer as SBP prides itself in being the premier institution maintaining across the board transparency and highest standards of integrity in all areas of its operations,” said SBP.
ATM software company milking bank accountholders

 

[Splurgenxs]

TPS is stealing a huge amount of money on a daily basis from bank accountholders. How is this possible? Hundreds of thousands of ATM transactions are made every day. If a virus or special code takes out just one paisa for each transaction, the account holders obviously cannot suspect any wrongdoing. But the company manages to steal a huge amount of money in this way every day from bank accounts.

This is an old Cracker method ...used a some years back when CCards were new. Multiple CCs compromised would generate thousands of dollars for a low end hacker yielding tons f money to multiple zombie addresses or paypal accounts. Ive had personal low scale experience in this ,and almost got busted and quit.

I guess this is new for pakistan. Nevertheless easily controllable.

 

[forcetrip]

Their huge office building is close to my house. I always wondered what they do in that fancy building right next to motor mechanics and a booze store. They seem pretty legit, the post suggests they are eating monopoly money because there seems to be no alternative in the market at this time.

 

[aun_muhammad]

I have been in "viewer-only" mode at these forums, however, this thread has asked me to share my opinion and a few links.

We all know how journalists have been known to blackmail individuals as well as organizations in the past.

Pakistan media watch came up with an excellent response to this ill-informed article:

"We missed this article in The News when it was published on 5 August, but it was brought to our attention by dear reader Xeeshan. After shaking our heads in disbelief, we decided that it was an excellent example of the type of poor reporting and sensationalism that is too prevalent in media even on topics other than politics.

The headline of the article, ‘ATM software company milking bank accountholders’, should immediately get the attention of anyone who does not have so much money that they do not ever pay attention to their.

The reporter, Jawwad Rizvi, fills his article with false information and conclusions that are not supported by the facts. For example, he says that “All proprietary means that the software is not compliant to ISO standards that are adopted globally by all the financial institutions”.

This is not true. ‘All proprietary’ means that the company which created the product claims all rights to its intellectual property – in this case the software code that runs TPS computer programme – and does not make this code publicly available. Software can be both proprietary and compliant to ISO standards such as Microsoft’s Office software.

Rizvi then says that because the software is proprietary, banks are not allowed to “even touch the machines that this software is installed on”. But he said before that “ATMs in Pakistan are run by a computer programme provided by TPS”. If he is correct, this means that banks are not allowed to touch their own ATMs. These banks must be very surprised to learn this!

Jawwad Rizvi then jumps from these factual errors to making outright claims of criminal activity on the part of TPS.

“TPS is stealing a huge amount of money on a daily basis from bank accountholders”.

Rizvi has no proof that TPS is stealing from bank accountholders. Rather, he offers a scenario that could happen.

Hundreds of thousands of ATM transactions are made every day. If a virus or special code takes out just one paisa for each transaction, the account holders obviously cannot suspect any wrongdoing. But the company manages to steal a huge amount of money in this way every day from bank accounts.

In other words, the plot of the movie ‘Office Space’.

Meanwhile, Michael and Samir are downsized, seemingly a symptom of the disposability with which the consultants view most Initech employees. To exact revenge on Initech, the three friends decide to infect the accounting system with a computer virus, designed to divert fractions of pennies into a bank account they control.

Rizvi returns to contradicting his own reporting. When he earlier wrote that “banks and ATM switches like 1Link are not allowed to check, audit or see the software code or even touch the machines that this software is installed on”, Rizvi later writes that “This “system” has been put in place by 1LINK’s initial founders and board and is still prevalent due to the extraordinary bribes paid by TPS to board members of 1LINK”.

Which is it? Can 1LINK not even touch the machines? Or is 1LINK installing the software themself?

When Jawwad Rizvi earlier wrote that “TPS has complete monopoly in this area of business”, he later writes that “Besides TPS, there are other companies like Euronet and Avanza who are providing similar solutions to banks in Pakistan”.

Which is it? TPS has complete monopoly or there are other companies that provide similar solutions to banks in Pakistan?

In addition to accusing TPS of stealing, Jang Group‘s reporter also accuses everyone and their brother of taking bribes including banks’ IT deparments, board members of 1LINK, and even State Bank officials. What is the evidence behind these accusations of criminal conduct? Jawwad Rizvi has none.

The reporter than spoke to an official at SBP who told him that they had received no complaint from any bank, and that “the indicated possibilities of collusion hardly merit an answer”.

Armed with several factual inaccuracies and no evidence, Jang Group‘s reporter Jawwad Rizvi accuses many individuals of criminal activity including stealing and bribe taking. It remains to be seen if any of the accused will file a report against publishing this material, or if Jang Group‘s credibility has sunk so low that it is determined as not even necessary.

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And TelecomPK compared both the news item and the Pakistan Media watch post in the following manner:

On August 5, an article appeared in the daily “The News” that stirred a buzz on social media. This was about accusing a Pakistan’s leading financial solutions company, TPS, of “milking” millions out of bank account holders accounts and bribing board members of Pakistan’s leading inter-bank ATM switch “1Link” to keep their software systems running there.
Let me include some excerpts of the news article that appeared in the paper before we go on and discuss how journalists twists the tales and blackmail people in Pakistan:
Sources in the banking industry disclosed that the ATMs in Pakistan are run by a computer programme provided by TPS, a Pakistani company.

TPS has complete monopoly in this area of business and gives its software under proprietary license terms.

It further says:
TPS is stealing a huge amount of money on a daily basis from bank accountholders. How is this possible? Hundreds of thousands of ATM transactions are made every day. If a virus or special code takes out just one paisa for each transaction, the account holders obviously cannot suspect any wrongdoing. But the company manages to steal a huge amount of money in this way every day from bank accounts.

The article also goes on to accuse the State Bank of Pakistan and 1Link board members:
This “system” has been put in place by 1LINK’s initial founders and board and is still prevalent due to the extraordinary bribes paid by TPS to board members of 1LINK. State Bank officials have also been pat of this scheme, sources said.

TPS charges banks in US dollars, although it delivers services locally. This is in violation of SBP’s regulations which it foists on others, but very conveniently overlooks in this case.

We understand TPS is a Pakistani software company that is providing electronic payment solutions to banks in Pakistan and countries abroad. To be honest, we first came to know of TPS in our interactions at EasyPaisa events, a mobile money service launched by Telenor. It merits mentioning here that TPS also powers online bill payments/fund transfer systems with various banks.
On the other hand Pakistan Media Watch, an online blog that keeps an eye on activities in the media and news articles came up with a report titled “No Evidence to support accusations in ATM Theft article“.
The writer’s comments on report and the lack of evidence in it in the following manner:
Rizvi then says that because the software is proprietary, banks are not allowed to “even touch the machines that this software is installed on”. But he said before that “ATMs in Pakistan are run by a computer programme provided by TPS”. If he is correct, this means that banks are not allowed to touch their own ATMs. These banks must be very surprised to learn this!

The report highlight’s the journalists own contradiction in the following paragraph of his report:
Rizvi returns to contradicting his own reporting. When he earlier wrote that “banks and ATM switches like 1Link are not allowed to check, audit or see the software code or even touch the machines that this software is installed on”, Rizvi later writes that “This “system” has been put in place by 1LINK’s initial founders and board and is still prevalent due to the extraordinary bribes paid by TPS to board members of 1LINK”.

Which is it? Can 1LINK not even touch the machines? Or is 1LINK installing the software themself?

Referring to TPS monopoly and then the presence of other players in the market, Pakistan media watch has also highlighted another contradiction in the same article:
When Jawwad Rizvi earlier wrote that “TPS has complete monopoly in this area of business”, he later writes that “Besides TPS, there are other companies like Euronet and Avanza who are providing similar solutions to banks in Pakistan”.

Which is it? TPS has complete monopoly or there are other companies that provide similar solutions to banks in Pakistan?

While being a very frequent ATM user, I can confidently say nothing is being milked away from my account and this report on the artcile concludes highlighting several inaccuracies and accusations lacking evidence. This, to every common man, shows how journalists and print media in general are exploiting their power and using their platforms to blackmail and milk money for themselves, I cannot foresee any other reason why this report could have been published online.
In the country we live in, we have every ingredient in place to keep us away from technology and stop our progress. It is our own people who cannot see us succeed.

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The news item is a senseless piece of media bhatta-khori that has been rubbished in the banking industry and by those who have any knowledge of the eBanking domain.

It is important to note here that this company is exporting software to more than 70 countries worldwide. The title "Our own people cannot see us succeed" is a fitting one indeed.

 

[aun_muhammad]

Unfortunately, I am a new member and could not post links to the above, have tried quoting them for your reference above