The formal name for the service tills now common outside most banks and building societies, through which money can be withdrawn and other transactions carried out. The ATMs are linked to the banks' computers to enable on-line monitoring of customer's accounts to take place through the machines.
An automated teller machine or automatic teller machine (ATM) is a computerized telecommunications device that provides a financial institution's customers a secure method of performing financial transactions in a public space without the need for a human clerk or bank teller.
Using an ATM, customers can access their bank accounts in order to make cash withdrawals (or credit card cash advances) and check their account balances. Many ATMs also allow people to deposit cash or cheques, transfer money between their bank accounts, pay bills, or purchase goods and services.
An ATM is also known, in English, as Automated Banking Machine, Money machine, Bank Machine (Canada), Cash Machine (UK), Hole-In-The-Wall (New Zealand) or Cashpoint (New Zealand, UK).
History
A mechanical cash dispenser, arguably an ATM, was developed and built by Luther George Simjian and installed 1939 in New York by the City Bank of New York, but removed after 6 months due to the lack of customer acceptance.
Thereafter, the history of ATMs paused for over 25 years, until De La Rue developed the first electronic ATM, which was installed first in Enfield Town in North London on June 27, 1967 by Barclays Bank. Shepherd-Barron was awarded an OBE in the 2005 New Year's Honours List
The first ATMs accepted only a single-use token or voucher, which was retained by the machine.
ATMs first came into wide use during the early- to mid-1980s.
Usage
On most modern ATMs, the customer identifies him or herself by inserting a plastic card with a magnetic stripe or a plastic smartcard with a chip, that contains his or her card number and some security information, such as an expiration date or CVC (CVV).
If the number is entered incorrectly several times in a row (usually three attempts per card insertion), some ATMs will attempt to retain the card as a security precaution to prevent an unauthorised user from discovering the PIN by guesswork. Captured cards are often destroyed if the ATM owner is not the card issuing bank, as non-customer's identities cannot be reliably confirmed.
In some cases, a transaction may be performed at the ATM that allows the customer's PIN to be changed securely.
Types
The top three worldwide manufacturers of ATM machinery and their ATM brands includes the Diebold Opteva series, NCR Personas series, and Wincor Nixdorf ProCash series.
Types by physical characteristics
There are two main types of ATMs that have developed over time:
Mono-function devices, which only one type of mechanism for financial transactions is present (such as cash dispensing or statement printing) Multi-function devices, which incorporate multiple mechanisms to perform multiple services (such as accepting deposits, dispensing cash, printing statements, etc.) all within a single footprint.Reasons for selecting either mono-function or multi-function and "interior" versus "exterior" ATMs include device cost, installation location, customer wait times, desired reliability, and historical preference.
Types by installation locations
ATMs are placed not only near or inside the premises of banks, but also in locations such as shopping centres/malls, grocery stores, gas stations and restaurants.
In Canada, when an ATM is not operated by a financial institution it is known as a "White Label ATM".
Financial networks and ATMs
Logical connections
Most ATMs are connected to interbank networks, enabling people to withdraw and deposit money from machines not belonging to the bank where they have their account or in the country where their accounts are held.
ATMs rely on authorization of a transaction by the card issuer or other authorizing institution via the communications network.
Many banks charge fees for the use of their ATMs.
In order to allow a more diverse range of devices to attach to their networks, some interbank networks have passed rules expanding the definition of an ATM to be a terminal that either has the vault within its footprint or utilizes the vault or cash drawer within the merchant establishment, which allows for the use of a scrip cash dispenser.
Physical connections
ATMs typically connect directly to their ATM Transaction Processor via either a dial-up modem over a telephone line or directly via a leased line.
In addition to methods employed for transaction security and secrecy, all communications traffic between the ATM and the Transaction Processor could also be encrypted via methods such as SSL.
Global use
There are no hard international or governmental-compiled numbers totaling the complete number of ATMs in use worldwide. Estimates developed by ATMIA place the number of ATMs in use at over 1.5 million as of August 2006
Industry views of ATM usage around the world generally divide the world into seven regions, due to the penetration rates, usage statistics, and features deployed.
The world's most northernly installed ATM in the world is located at Longyearbyen, Svalbard, Norway.
The world's most southernly installed ATM in the world is located at McMurdo Station, Antarctica.
While ATMs are ubiquitous on modern cruise ships, ATMs can also be found on certain US Navy ships.
Hardware
An ATM typically is made up of the following devices:
CPU (to control the user interface and transaction devices) Magnetic and/or Chip card reader (to identify the customer) PIN Pad (similar in layout to a Touch tone or Calculator keypad), often manufactured as part of a secure enclosure. Display (used by the customer for performing the transaction) Function key buttons (usually close to the display) or a Touchscreen (used to select the various aspects of the transaction) Record Printer (to provide the customer with a record of their transaction) Vault (to store the parts of the machinery requiring restricted access) Housing (for aesthetics and to attach signage to)Recently, due to heavier computing demands and the falling price of computer-like architectures, ATMs have moved away from custom hardware architectures using microcontrollers and/or application-specific integrated circuits to adopting a hardware architecture that is very similar to a personal computer.
Vaults
The vault of an ATM is within the footprint of the device itself and is where items of value are kept.
Mechanisms found inside the vault may include:
Dispensing mechanism (to provide cash or other items of value) Deposit mechanism (to take items of value from the customer) Security sensors (Magnetic, Thermal, Seismic) Locks (to ensure controlled access to the contents of the vault)ATM vaults are supplied by manufacturers in several grades.
ATM manufacturers recommend that vaults be attached to the floor to prevent theft.
Software
With the migration to commodity PC hardware, standard commercial "off-the-shelf" operating systems and programming environments can be used inside of ATMs.
Linux is also finding some reception in the ATM marketplace.
XFS middleware
While the perceived benefit of XFS is similar to the Java's "Write once, run anywhere" mantra, often different ATM hardware vendors have different interpretations of the XFS standard.
Software integrity
With the move of ATMs to industry-standard computing environments, concern has risen about the integrity of the ATM's software stack.
Security
Security, as it relates to ATMs, has several dimensions. ATMs also provide a practical demonstration of a number of security systems and concepts operating together and how various security concerns are dealt with.
Physical
Early ATM security focused on making the ATMs invulnerable to physical attack; A number of attacks on ATMs resulted, with thieves attempting to steal entire ATMs by ram-raiding.
Another attack method is to seal all openings of the ATM with silicone and fill the vault with a combustible gas or to place an explosive inside, attached, or near the ATM.
Modern ATM physical security, per other modern money-handling security, concentrates on denying the use of the money inside the machine to a thief, by means of techniques such as dye markers and smoke canisters.
Transactional secrecy and integrity
The security of ATM transactions relies mostly on the integrity of the secure cryptoprocessor: the ATM often uses commodity components that are not considered to be "trusted systems".
Customer identity integrity
There have also been a number of incidents of fraud where criminals have attached fake keypads or card readers to existing machines.
Device operation integrity
Openings on the customer-side of ATMs are often covered by mechanical shutters to prevent tampering with the mechanisms when they are not in use. Alarm sensors are placed inside the ATM and in ATM servicing areas to alert their operators when doors have been opened by unauthorized personnel.
Rules are usually set by the government or ATM operating body that dictate what happens when integrity systems fail. Depending on the jurisdiction, a bank may or may not be liable when an attempt is made to dispense a customer's money from an ATM and the money either gets outside of the ATM's vault, or was exposed in a non-secure fashion, or they are unable to determine the state of the money after a failed transaction.
Customer security while using ATMs
In some areas, multiple security cameras and security guards are an ubiquitous ATM feature.
Critics of ATM operators assert that the issue of customer security appears to have been abandoned by the banking industry;
At least as far back as July 30, 1986, critics of the industry have called for the adoption of an emergency PIN system for ATMs, where the user is able to send a silent alarm in response to a threat.
Alternative uses
Although ATMs were originally developed as just cash dispensers, they have evolved to include many other bank-related functions. In some countries, especially those which benefit from a fully integrated cross-bank ATM network (e.g.: Multibanco in Portugal), ATMs include many functions which are not directly related to the management of one's own bank account, such as:
Deposit currency recognition, acceptance, and recycling Paying routine bills, fees, and taxes (utilities, phone bills, social security, legal fees, taxes, etc.) Printing bank statements Updating passbooks Loading monetary value into pre-paid cards (cell phones, tolls, multi purpose stored value cards, etc.) Ticket purchases (train, concert, etc.).In Canada, the Interac shared cash network does not allow for the selling of goods from ATMs due to specific security requirements for PIN entry when buying goods.
ATMs can also act as an advertising channel for companies to advertise their own products or third-party products and services.
Future technologies
Manufactures have demonstrated and have deployed several different technologies on ATMs that have not yet reached worldwide acceptance, such as:
Biometrics, where authorization of transactions is based on the scanning of a customer's fingerprint, iris, face, etc. Biometrics on ATMs can be found in Asia Cheque/Cash Acceptance, where the ATM accepts and recoginse cheques and/or currency without using envelopes Expected to grow in importance in the US through Check 21 legislation. Bar code scanning On-demand printing of "items of value" (such as movie tickets, Travellers Cheques, etc.) Dispensing additional media (such as phone cards) Co-ordination of ATMs with mobile phones Customer-specific advertising Integration with non-banking equipmentReliability
Before an ATM is placed in a public place, it typically has undergone extensive testing with both test money and the backend computer systems that allow it to perform transactions. Banking customers also have come to expect high reliability in their ATMs, which provides incentives to ATM providers to minimize machine and network failures.
ATMs and the supporting electronic financial networks are generally very reliable, with industry benchmarks typically producing 98.25% customer availability for ATMs and up to 99.999% availability for host systems.
To aid in reliability, some ATMs print each transaction to a roll paper journal that is stored inside the ATM, which allows both the users of the ATMs and the related financial institutions to settle things based on the records in the journal in case there is a dispute.
Improper money checking can cause the possibility of a customer receiving counterfeit banknotes from an ATM. While Bank presonnel are generally trained better at spotting and removing counterfit cash, the resulting ATM money supplies used by banks provide no absolute guarantee for proper banknotes, as the Federal Criminal Police Office of Germany has confirmed that there are regularly incidents of false banknotes having been provided through bank ATMs. Bill validation technology can be used by ATM providers to help ensure the authenticity of the cash before it is stocked in an ATM;
Fraud
As with any device containing objects of value, ATMs and the systems they depend on to function are the targets of fraud.
Fake ATMs
The first known instance of a fake ATM was installed at a shopping mall in Manchester, Connecticut in 1993. By modifying the inner workings of a Fujitsu model 7020 ATM, a criminal gang known as The Bucklands Boys were able to steal information from cards inserted into the machine by customers.
Operational fraud
In some cases, bank fraud could occur at ATMs whereby the bank accidentally stocks the ATM with bills in the wrong denomination, therefore giving the customer more money than should be dispensed.
In a variation of this, WAVY-TV reported an incident in Virginia Beach of September 2006 where a hacker who had an admin password for a gas station's white label ATM caused the unit to assume it was loaded with $5 USD bills instead of $20s, enabling himself--and many subsequent customers--to walk away with four times the money they said they wanted to withdraw.
ATM behaviour can change during what is called "stand-in" time, where the Bank's cash dispensing network is unable to access databases that contain account information (possibly for database maintenance).
ATM card fraud
Theft
For a low-tech form of fraud, the simplest is to simply steal a customer's card.
A later variant of this approach is to trap the card inside of the ATM's card reader with a device often referred to as a Lebanese loop.
Cloning
The concept and various methods of copying the contents of an ATM card's magnetic stripe on to a duplicate card to access other people's financial information was well known in the hacking communities by late 1990.
In 1996 Andrew Stone, a computer security consultant from Hampshire in the UK was convicted of stealing in excess of 1 million UK pounds (at the time that was US$1.6 million) by pointing high definition video cameras at ATMs from a considerable distance, and by recording the card numbers, expiry dates, etc.
By contrast, a newer high-tech modus operandi involves the installation of a magnetic card reader over the real ATM's card slot and the use of a wireless surveillance camera or a modified digital camera to observe the user's PIN.
Combatting stolen cards and information
In an attempt to stop these practices, countermeasures against card cloning have been developed by the banking industry, in particular by the use of smart cards which cannot easily be copied or spoofed by un-authenticated devices, and by attempting to make the outside of their ATMs tamper evident.
EMV is widely used in the UK (Chip and PIN) and parts of Europe, but when it is not available in a specific area, ATMs must fallback to using the easy to copy magnetic stripe to perform transactions.
Related devices
"Talking ATM"
A Talking ATM is a type of ATM that provides audible instructions so that persons who cannot read an ATM screen can independently use the machine.
Postal kiosk
A postal kiosk may also share many of the same components as an ATM (including a vault), but only dispenses items relating to postage.
Scrip cash dispenser
A scrip cash dispenser may share many of the same components as an ATM, but lacks the ability to dispense physical cash and consequently requires no vault.
Teller assist unit
A Teller Assist Unit may also share many of the same components as an ATM (including a vault), but they are distinct in that they are designed to be operated solely by trained personnel and not the general public, they do not integrate directly into interbank networks, and are usually controlled by a computer that is not directly integrated into the overall construction of the unit.
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