On April 8th, 2014, Microsoft will stop providing security updates and support for windows XP. It is estimated that 95% of the ATMs in the United States currently run on Windows XP. With the lack of security updates, the operating system will become very susceptible to attacks. After support and security updates are stopped, the system and most of the current ATMs will be considered unfit for use by consumers; however, this event closely mimics the Y2K scare that came before 2000 with all computers overloading. It is likely that most operators of these ATMs will not do anything about the support being cut and continue to run the same ATMs until they can no longer keep up. Most of the computer components in these ATMs are much too old to run windows 7 or 8, so the incentive to make the switch right when the support is cut is very low. Nobody wants to dish out a bunch of cash to purchase a new ATM when they still have one that works perfectly fine. It is estimated that only 40% of the ATMs will be replaced by newer models once the support is cut. Most of the ATMs run on a special version of Windows XP that will still have support for the foreseeable future.
Many vendors will continue to run the ATMs on the outdated software until it becomes too risky to themselves and to consumer’s safety, at which point they will make the change.
For those who do the replacing now for fear of system compromise, it is a very lengthy process, and one that people will put off until the last minute. If they put off replacement until the day the operating system is no longer supported, they will have some downtime in which they might not be able to accept credit card or debit card as payment for goods or services. ATMs are usually located in businesses that do not accept credit or debit cards as payment. With this downtime of up to a month, vendors will seek a way to accept payments easily and quickly.
Many vendors might turn to accepting Bitcoin or other digital currencies. Paypal would be an attractive option if it weren’t for the excessive fees. Though PayPal offers an instant global money transfer, they charge heavy fee’s and merchants often try to avoid it. Paypal costs 2.9% + $.30 USD per transaction in the united states. This fee is thousands of times more than the fee to send payment via a cryptocoin that can be as low as fractions of a penny. Bitcoin and other altcoins will be an attractive option for an alternative payment during the downtime of ATMs that is likely to happen within a small portion of the 40% that are upgrading.
With Windows XP becoming obsolete, the growth of Bitcoin being accept as payment for goods will increase within the 40% that replace ATMs now but by a very small percentage. Vendors may plan on accepting Bitcoin only during the downtime, but I think it is likely they will continue to use it after they get their new ATMs due to ease of purchase, and dirt cheap transaction fees. Some vendors might even accept it and not get a new ATM altogether, especially vendors that sell most of their goods online. Though this is unlikely, maybe a couple of vendors will switch to Bitcoin instead of credit card.
With the expiration of eight year old software comes the opportunity for Bitcoin to expand further into everyday life. The currency is still very young and has a long way to go, however, it continually gains ground in becoming mainstream. Since Bitcoin ATMs are just now being built; the software is up to date and will not need to be replaced anytime soon even with the changes coming April 8th. Bitcoin is looking great as a future investment and has a chance to become even more mainstream within a small percent of vendors next month.
International ATMs are at more risk than United States ATMs, and it is unlikely that these changes will have any major impact on Bitcoin economy outside of a small percentage of the 40% of vendors that will be replacing their old ATMs. Windows XP will continue to run in the majority of the world’s ATMs until it becomes to old to keep up with transactions. At best, these changes bring more pressure on the current financial system to step up their game on bank transactions. The impact on Bitcoin will be very subtle, only affecting a few vendors.