Automatic teller machine -- ATM Machines
An automatic teller machine (ATM) is an electronic device which allows a bank's customers to make cash withdrawals and check their account balances at any time without the need for a human teller. Many ATMs also allow people to deposit cash or cheques, transfer money between their bank accounts or even buy postage stamps.
The world's first ATM was produced by NCR in Dundee, Scotland, and installed in Enfield Town in north London on June 27, 1967 by Barclays Bank. This instance of the invention is credited to John Shepherd-Barron, although George Simjian registered patents in New York, USA in the 1930s and Don Wetzel and two other engineers from Docutel registered a patent on June 4, 1973. Shepherd-Barron was awarded an OBE in the 2005 New Year's Honours.
Modern ATM banking was tested in NZ's Christchurch region before being rolled out elsewhere as a banking service.
In modern ATMs, customers authenticate themselves by using a plastic card with a magnetic stripe, which encodes the customer's account number, and by entering a numeric passcode called a PIN (personal identification number), which in some cases may be changed using the machine. If the number is entered incorrectly several times in a row, most ATMs will retain the card as a security precaution to prevent an unauthorised user from working out the PIN by pure guesswork. Earliest versions accepted a single-use token or voucher, and the latest ATMs read and store customer data on a smartcard.
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. This is a convenience, especially for people who are travelling: it is possible to make withdrawals in places where one's bank has no branches, and even to withdraw local currency in a foreign country, often at a better exchange rate than would be available by changing cash.
Many banks in the United States charge fees for the use of their ATMs. In some cases, these fees are assessed solely for non-bank members, in other cases they apply to all users. Many oppose these fees because ATMs are actually less costly for banks than withdrawals from human tellers.
When the ATM surcharges emerged in the 1990s, they usually were on the order of $0.25. Quickly, however, they climbed. ATM fees now commonly reach $1.50, and can be as high as $5.00, especially around bars and casinos. In cases where fees are paid both to the bank and the ATM owner withdrawal fees could potentially reach $10.
ATMs are placed not only near banks, but also in locations such as malls, grocery stores, and restaurants. Sometimes, ATMs are advertised for their fees.
In many states, one can circumvent ATM fees by using debit cards at retail stores. Many stores allow a debit-card user to receive "cash back" with an order; that is, one could make a $63 debit on a $13 order and receive $50 in change.
In the United Kingdom, public reaction to proposed increases in fees was so strong that fees were removed altogether for using ATMs at banks, regardless of whether the user is a customer of that bank. Machines in garages, nightclubs and other venues do charge, however.
Hardware and software
ATMs contain secure cryptoprocessors, generally within an IBM PC compatible host computer in a secure enclosure. The security of the machine relies mostly on the integrity of the secure cryptoprocessor: the host software often runs on a commodity operating system.
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. The latter is preferable as the time required to establish the connection is much less. Such connections are rather expensive, though, meaning less-trafficked machines will usually rely on a dial-up modem. That dilemma may be solved as more ATMs use dedicated high-speed Internet connections, which are much cheaper than leased lines. Encryption is used to prevent theft of personal or financial information.
In addition, ATMs are moving away from custom circuit boards (most of which are based on Intel 8086 architecture) and into full-fledged PCs with commodity operating systems such as Windows 2000 and Linux. An example of this is Banrisul, the largest bank in the South of Brazil, which has replaced the MS-DOS operating systems in its automatic teller machines with Linux. Other platforms include RMX 86, OS/2 and Windows 98 bundled with Java. The newest ATMs with Microsoft technology use Windows XP or Windows XP embedded.
ATMs are generally reliable, but if they do go wrong customers will be left without cash until the following morning or whenever they can get to the bank during opening hours. Of course, not all errors are to the detriment of customers; there have been cases of machines giving out money without debiting the account, or giving out higher value notes as a result of incorrect denomination of banknote being loaded in the money cassettes. Errors that can occur may be mechanical (such as card transport mechanisms; keypads; hard disk failures); software (such as operating system; device driver; application); communications; or purely down to operator error.
Early ATM security focused on making the ATMs invulnerable to physical attack; they were effectively safes with dispenser mechanisms. A number of attacks on ATMs resulted, with thieves attempting to steal entire ATMs by ram-raiding.
Modern ATM physical security, like 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. This change in emphasis has meant that ATMs are now frequently found free-standing in places like shops, rather than mounted into walls.
Another trend in ATM security leverages the existing security of a retail establishment. In this scenario, the fortified cash dispenser is replaced with nothing more than a paper-tape printer. The customer requests a withdrawal from the machine, which dispenses no money, but merely prints a receipt. The customer then takes this receipt to a nearby sales clerk, who then exchanges it for cash from the till.
There are also many "phantom withdrawals" from ATMs, which banks often claim are the result of fraud by customers. Many experts ascribe phantom withdrawals to the criminal activity of dishonest insiders. Ross Anderson, a leading cryptography researcher, has been involved in investigating many cases of phantom withdrawals, and has been responsible for exposing several errors in bank security.
There have also been a number of incidents of fraud where criminals have used fake machines or have attached fake keypads or card readers to existing machines. These have then been used to record customers' PINs and bank account details in order to gain unauthorised access to their accounts.
A bank is always liable when a customer's money is stolen from an ATM, but there have been complaints that banks have made it difficult to recover money lost in this way.
In some cases, bank fraud occurs 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. Individuals who unknowingly use such ATMs are probably never tried, but those who withdraw a second time are usually prosecuted.
In the early 2000s, ATM-specific crimes became common. These had two common forms. In the low-tech form, the user's PIN is observed by someone watching as they use the machine; they are then mugged for their card by a second person, who has taken care to stay out of range of the ATM's surveillance cameras. However, this offers little advantage compared to simply mugging the victim for their money, and carries the same risks to the offender as other violent crimes. By contrast, the most common 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 to observe the user's PIN. Although the latter fraud would have seemed like something from a spy novel until recently, the availability of low-cost commodity wireless cameras and card readers has made it a relatively simple form of fraud, with comparatively low risk to the fraudsters.
As of 2005, banks are working hard to develop countermeasures for this latter kind of fraud, in particular by the use of smart cards which cannot easily be read by un-authenticated devices, and by attempting to make the outside of their ATMs tamper evident.
Although ATM's were originally developed as 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 [ (http://www.sibs.pt/)]) ATMs include many functions which are not directly related to the management of one's own bank account, such as:
- Paying routine bills, fees, and taxes (utilities, phone bills, social security, legal fees, taxes, etc.)
- Loading monetary value into pre-paid cards (cell phones, tolls)
- Ticket purchases (train, concert, etc.).
ATMs are known by a wide variety of names, some of which are more common in certain countries than others. Examples include:
- Automated Teller Machine
- Automated Banking Machine (ABM is commonly used by Canadian banks)
- ATM Machine (which is a pleonasm, though many people say it anyway)
- Bankamatik, in Turkey
- Bancomat or Bankomat, particularly in continental Europe – Bancomat is a trademark of UBS AG
- Bank Box
- Bank Machine, in Canada
- Cajero Automático, in Spain
- Cash Box
- Cash Dispenser
- Cash Machine
- Cashflow, in New Zealand (ASB)
- Cashpoint, in New Zealand (National Bank) and the United Kingdom (Lloyds TSB).
- Cashstation, in the Chicago, Illinois area
- Geldautomat, in Germany (Geld = money)
- Geldautomaat, in
Dutch (Geld =
- Also known as a pinautomaat (see PIN) (verb. pinnen)
- Also (slang): flappentap (Flappen = bank notes, tap = tap/spigot)
- ChemKey, in some parts of Michigan
- Hrađbanki (literally: fast-bank), in Iceland.
- Khodpardaz (.H/~1/'2) in Iran, meaning Automatic payer in Persian.
- MAC machine, or MAC (Money Access Center), particularly on the East coast of the United States (esp. New Jersey and Pennsylvania)
- Minibank, in Norway
- Money Machine, in New Zealand
- Multibanco, in Portugal
- Night and Day ATM, in New Zealand (ANZ)
- Pankkiautomaatti, in Finland
- Pengeautomat in Denmark (Penge = money)
- Postomat, in Switzerland (Swiss Post Bank ATM)
- Robotic Teller
- Telebanco, in Spain and Italy
- Tyme Machine, in Wisconsin
- "Ugly Teller"
- ATH (A Toda Hora [At all times]), in Puerto Rico
- "Drink Link", in the Republic of Ireland and the United Kingdom
- How ATMs work (http://www.howstuffworks.com/atm.htm) – From website Howstuffworks.com
- The Money Machines (http://www.fortune.com/fortune/fortune500/articles/0,15114,662142,00.html) – An account of U.S. ATM history; By Ellen Florian, Fortune.com
- ATM timeline (http://www.delarue.com/dlr_content/cda/pages/aboutus/companyhistory/0,1714,,00.html) – Includes picture of original ATM opening
- Enfield's claims to fame (http://www.bal-ami.com/enfield.html)
- Banrisul Linux-ATM project (http://www.linux.org/people/banrisul_english.html)
- ATM inventor honoured (http://news.bbc.co.uk/2/hi/uk_news/scotland/4135269.stm)