PROJECT ON

AUTOMATED TELLER MACHINE

BACHELOR OF COMMERCE
BANKING AND INSURANCE

SEMESTER V
ACADEMIC YEAR
2015-2016

SUBMITTED BY
SAMIKSHA S. NAIK
ROLL NO.28

VIDYAVARDHINIS
A.V. COLLEGE OF ARTS,
K.M. COLLEGE OF ARTS ,
E.S.A. COLLEGE OF SCIENCE,
VASAI ROAD(W) ,DIST.PALGHAR,MAHARASHTRA-
401202.
 PROJECT ON
AUTOMATED TELLER MACHINE
BACHELOR OF COMMERCE
BANKING AND INSURANCE

SUBMITTED
In partial fulfillment of requirement of
The Award of Degree of
BACHELOR OF COMMERCE in
BANKING AND INSURANCE
BY
SAMIKSHA S. NAIK
ROLL NO.28

VIDYAVARDHINIS
A.V. COLLEGE OF ARTS,
K.M. COLLEGE OF COMMERCE ,
E.S.A. COLLEGE OF SCIENCE,
VASAI ROAD (W) ,DIST.PALGHAR,MAHARASHTRA -401202.
 CERTIFICATE

This is to certify that MISS SAMIKSHA S. NAIK student of

BACHELOR OF COMMERCE in BANKING AND INSURANCE has
successfully completed the project on “AUTOMATED TELLER
MACHINE” under the guidance of PROF.AMAR MADIA for the
academic year 2015-2016 .
 DECLARATION

I hereby declare that the project entitled “AUTOMATED TELLER

MACHINE” submitted for the degree of BACHELOR OF COMMERCE
in BANKING AND INSURANCE is my original work and the project
has not formed the basis for the award of any degree ,associated ship
,fellowship or any similar title etc .

NAME OF THE STUDENT : SAMIKSHA S. NAIK

 ROLL NO. : 28

SIGNATURE :

ACKNOWLEDGEMENT

“It is not possible to prepare this project without the assistance &
encouragement of other people .This one is certainly no exception .”

On the very outset of this project .I would like to extend my sincere &
heartfelt obligation towards all the people who have helped me in this
endeavor .Without their active guidance,help,co-operation &
encouragement, I would have not made headway in this project.

I owe my sincere gratitude towards PROF.AMAR MADIA for his

valuable guidance and support.

I also extend my gratitude to the In-charge PROF.ARVIND UBALE and

PRINCIPAL.DR. KESHAV GHORUDE and the library for their support.

I also acknowledge with a deep sense of reverence , towards parents and

members of the family who has supported me.
SR NO. TOPICS PAGE NO.

1. INTRODUCTION AND HISTORY OF AN ATM

INTRODUCTION

MEANING

DEFINITION

HISTORY

DOCUTEL IN THE UNITED STATES 1969

LOCATIONS OF ATMS

FINANCIAL NETWORK OF ATMS

GLOBAL UTILISATION OF ATM

HARDWARE OF ATM
 SOFTWARE OF ATM

USES

RELIABILITY

RELATED DEVICES

CAREER

2. INTRODUCTION OF ATM IN INDIA

INTRODUCTION OF FIRST ATM IN INDIA

INDIA’S FIRST POST OFFICE SAVINGS BANK

INAUGURATED IN YES BANK

ATM COMPANIES SEE SCOPE FOR MORE

GROWTH

WHITE LABEL ATM (WLAS) IN INDIA-

GUIDELINES

ATM CHALLENGES IN INDIA

ATM SERVICES
 BENEFITS AND RISKS OF AN ATM

3. ATM INSTRUCTIONS AND SECURITY

12 GOLDEN RULES TO KEEP YOUR ATM

TRANSACTIONS SAFE AND SECURE

SECURITY

FRAUD

CARD SKIMMING

ADVANTAGES OF AN ATM

DISADVANTAGES OF AN ATM

4. ATM MACHINE INFORMATION

HOW TO WITHDRAW MONEY FROM AN ATM

PROCESS OF USING AN ATM CARD

HOW TO CHECK THE ACCOUNT BALANCE

THROUGH AN ATM CARD
 HOW TO GET CASH WITHOUT SWIPPING AN ATM
CARD

PARTS OF ATM MACHINE

FUNCTIONS OF ATM MACHINE

5. ATM VS DEBIT CARD AND CREDIT CARD

ATM VS DEBIT CARD AND CREDIT CARD :THE

DIFFERENCE

FUTURE OF ATM IN INDIA

 CONCLUSION

 BIBILOGRAPHY
 CHAPTER 1
INTRODUCTION AND HISTORY OF AN ATM

1.1 INTRODUCTION
Payment systems have developed rapidly in many countries over the past few
decades. The use of electronic means of payment has increased at the expense of
paper-based payment instruments. For instance, in some countries payment cards have
replaced cheques, and Internet banking has become a popular means of paying
invoices. The developments in payment systems and especially in cash usage are very
important for central banks. Central banks ought to promote stable, reliable and
efficient payment systems. Furthermore, the maintenance of currency supply is one of
the main responsibilities of central banks. Cash is the only legal tender, and cash
issuance is a central bank monopoly and the basis of seigniorage for central banks.
Maintenance of the currency supply includes distribution of notes and coins to end-
users. Automated Teller Machines (ATMs1 ) are nowadays a very common
technology for dispensing notes to cash holders. Putting notes into circulation via
ATMs involves two main parties: the central bank and banks, or bank-owned
companies, which typically maintain ATMs and ATM networks2 . The interests of
these two parties may be somewhat conflicting: from the central bank’s point of view,
increased cash usage is good, as it generates seignorage; whereas for banks less cash
usage is preferable since cash usage entails costs to banks but hardly any income.
Therefore, it may be in banks’ interests to reduce cash usage and the number of ATMs.
In addition to central banks and banks, cash usage has relevance for consumers, as
well. Consumers decide, based on financial and inconvenience costs, whether to pay
for transactions with cash or some other payment instrument. How do cash dispensing
technology choices or changes in this technology affect cash usage and maintenance
of the currency supply? What happens if banks decide to radically reduce the number
of ATMs? Do people hold less cash because it is difficult to find an ATM and
withdraw cash? Or do people hold more cash because they withdraw greater amounts
of cash as visiting ATMs becomes more inconvenient? Based on the earlier literature,
eg Boeschoten (1992, 1998), Snellmanetal (2000), Drehmann and Goodhart (2000)
and Drehmann et al (2002), the effects of ATMs on cash in circulation are somewhat
ambiguous. Also, the reduction in the number of ATM networks may reduce the
number of ATMs and affect the demand for cash. Furthermore, the effects of ATM
network market structure on cash usage may also depend on other payment
instruments. If there are convenient and inexpensive payment instruments available,
changes in ATM network market structure may have greater effects on cash usage
than in infrastructures where cash is the only payment instrument available. The
market structure of cash withdrawal ATM networks differs across countries. Even in
the euro area, there are countries with only one ATM network and other countries with
many. There have also been changes in the ATM network market structure during the
past fifteen years in many countries. Finland is a good example of this. Until 1994,
each bank had its own ATM network, and these had been compatible for some years.
In 1994, the biggest banks3 decided to close down their own networks. They founded
a jointly owned company, called Automatia Pankkiautomaatit Ltd. This company,
which bought the ATMs of the owner banks and the ATMs of Suomen Säästöpankki,
established a common ATM network (Otto.network), and began to maintain the ATMs
in it. In addition to this network, there were two considerably smaller cash withdrawal
ATM networks in Finland in 1994–2004. All three of these networks were compatible,
but during the later years customers had to pay a fee for using rival banks’ ATMs. In
2004, the small banks decided to close down their two networks and to start using
Otto.network. Otto.ATMs are still owned by Automatia Pankkiautomaatit Ltd, and all
banks are customers of this network. Customers of all banks are generally able to
withdraw cash free of charge. In Finland, reductions in ATM networks have always
resulted in reductions in the number of ATMs. For instance, at the start of the 1990s,
the number of ATMs decreased by 14.5% in one year as ATMs were closed in
connection with the merger of ATM networks. Before the merger, banks were
competing fiercely with each other, and one way to do this was to provide ATM
services at their own ATMs. In fact, Finland is the only country where the number of
ATMs has decreased considerably. The number of ATMs decreased continually during
1993–2003, dropping from 2994 to 2421 in 1993–1995 alone. Thus, monopolisation
of the ATM network market structure seems to have reduced the number of ATMs. On
the other hand, at the start of the 1990s, there was a severe banking crisis in Finland,
which forced banks to cut costs. However, the banking crisis cannot be the only
reason behind the reduction in ATMs. As stated above, the two small networks were
closed down in 2004. As a result, ca 300 ATMs were closed and, at the same time, ca
80 new Otto.ATMs were installed. On this occasion, the reduction of ATMs could
hardly have been the consequence of the banking crisis. In other words,
monopolisation again led to fewer ATMs. In other countries, however, the tendency
towards fewer ATMs has not been as pronounced as in Finland. Therefore, the
monopolisation effects on the number of ATMs should be studied more closely. We
describe developments and differences across countries in detail in Section 4.1 and
Appendix 2. The monopolisation of ATM networks and its effects on the number of
ATMs and cash usage have not been widely discussed in the literature. The aim of this
study is to highlight these aspects. The novelty of the study is to construct an ATM
equation which depends on the number of ATM networks. We analyse the influence of
monopolisation of the ATM network market structure both theoretically and
empirically. A further aim is to contribute to the earlier discussion on the effects of the
number of ATMs on cash usage. This question has been analysed in many earlier
studies, but with mixed results: According to some studies, cash usage depends
positively on the number of ATMs, whereas some other studies indicate the opposite
result. Because of the ambiguous results in the earlier literature, we contribute to this
discussion with both our theoretical and empirical analysis. We concentrate on the
question of how ATMs affect cash usage when there is another payment technology
available. Moreover, the earlier discussion on the demand for money and alternative
payment instruments typically concentrates on the consumer side, ie the demand side.
The bank (supply) side is also important because banks maximise profits and decide
on the number of ATMs. In this analysis, the bank’s behaviour and the profit function
behind its decisions are highlighted. Furthermore, we concentrate mostly on the
transactions demand for cash and assume that all cash is withdrawn at ATMs. In
reality, the importance of ATMs as a cash distribution channel differs across countries.
1.2 MEANING
It means ‘to count'; the machine counts the money before giving it to you. It does the same job as that
of the ‘bank teller'. The word ‘teller' comes from the Old English ‘tellan' meaning to ‘calculate' or
‘count'. Over a period of time, ‘tellan' acquired another meaning — to narrate. This gave us the verb
‘tell'. With the passage of time, the original meaning (‘to count') fell out of use, and the second one
(‘to narrate') became the principal meaning of the word. ‘Teller' meaning ‘count' survives in a limited
number of terms: bank teller, ATM, etc.
1.3 DEFINITION
An AUTOMATED TELLER MACHINE or automatic teller machine also known as automated banking
machine (ATM) cash machine,cash point ,cash line or colloquially hole in the wall is an electronic
telecommunication device that enables the customers of a financial institution to perform financial
transactions .
An automated teller machine (ATM) is an electronic banking outlet, which allows customers to
complete basic transactions without the aid of a branch representative or teller. Anyone with a credit
card or debit card can access most ATMs. The first ATM appeared in London in 1967, and in less than
50 years, ATMs spread around the globe, securing a presence in every major country and even tiny
little island nations such as Kiribati and the Federated States of Micronesia.
According to business dictionery ,
A plastic card used to withdraw money from a banking institution's automatic teller machine (ATM).
Sometimes this card may also be used as a debit card, but not all ATM cards have this capability.
A cash machine, also known as an automated teller
machine (ATM, American, British, Australian, Malaysian, South
African, Singaporean, Indian, Maldivian, Hiberno, Philippine and Sri Lankan English), automated
banking machine (ABM, Canadian English, cashpoint, cashline, minibank, bankomat or
colloquially hole in the wall (British English) is an electronic telecommunications device that enables
the customers of a financial institution to perform financial transactions, particularly cash withdrawal,
without the need for a human cashier, clerk or bank teller.

1.4 HISTORY
INVENTOR OF ATM
JOHN ADRIAN
SHEPHERD-BARROM
, OBE ( 23 JUNE 1925
-15 MAY 2010 ) was a
Scottish inventor ,who
pioneered the
development of the cash
machine ,sometimes
referred to as the
AUTOMATED
TELLER
MACHINE or
ATM.

AN OLD
NIXDORF ATM
HISTORY OF AN ATM
The idea of out-of-hours cash distribution developed from bankers' needs in Asia
(Japan), Europe (Sweden and the United Kingdom) and North America (the United
States).In the US patent record, Luther George Simjian has been credited with
developing a "prior art device". Specifically his 132nd patent (US3079603), which
was first filed on 30 June 1960 (and granted 26 February 1963). The roll-out of this
machine, called Bankograph, was delayed by a couple of years, due in part to
Simjian's Reflectone Electronics Inc. being acquired by Universal Match
Corporation.An experimental Bankograph was installed in New York City in 1961 by
the City Bank of New York, but removed after six months due to the lack of customer
acceptance. The Bankograph was an automated envelope deposit machine (accepting
coins, cash and cheques) and did not have cash dispensing features.

In simultaneous and independent efforts ,engineers in Japan ,Sweden and Britain

developed their own cash machines during 1960s. The first cash machine was put into
use by Barclays Bank in its Enfield Townbranch in north London, United Kingdom,
on 27 June 1967.This machine was inaugurated by English comedy actor Reg
Varney.This instance of the invention is credited to the engineering team lead by John
Shepherd-Barron of printing firm De La Rue,who was awarded an OBE in the 2005
New Year Honours. Transactions were initiated by inserting paper cheques issued by a
teller or cashier, marked with carbon-14 for machine readability and security, which in
a latter model were matched with a six digit personal identification
number(PIN).Shepherd-Barron stated; "It struck me there must be a way I could get
my own money, anywhere in the world or the UK. I hit upon the idea of a chocolate
bar dispenser, but replacing chocolate with cash."

The Barclays-De La Rue machine (called De La Rue Automatic Cash System or

DACS) beat the Swedish saving banks' and a company called Metior's machine (a
device called Bankomat) by a mere nine days and Westminster Bank’s-Smith
Industries-Chubb system (called Chubb MD2) by a month.The online version of the
Swedish machine is listed to have been operational on 6 May 1968, while claiming to
be the first online cash machine in the world (ahead of a similar claim
by IBM and Lloyds Bank in 1971). The collaboration of a small start-up called
Speytec and Midland Bank developed a fourth machine which was marketed after
1969 in Europe and the US by the Burroughs Corporation. The patent for this device
(GB1329964) was filed on September 1969 (and granted in 1973) by John David
Edwards, Leonard Perkins, John Henry Donald, Peter Lee Chappell, Sean Benjamin
Newcombe & Malcom David Roe.

1.5 DOCUTEL IN THE UNITED STATES 1969

After looking first hand at the experiences in Europe, in 1968 the cash machine was
pioneered in the US by Donald Wetzel, who was a department head at a company
called Docutel.On September 2, 1969, Chemical Bank installed the first cash machine
in the US at its branch in Rockville Centre, New York. The first cash machines were
designed to dispense a fixed amount of cash when a user inserted a specially coded
card.[29] A Chemical Bank advertisement boasted "On Sept. 2 our bank will open at
9:00 and never close again."[30]Chemical's cash machine, initially known as a
Docuteller was designed by Donald Wetzel and his company Docutel. Chemical
executives were initially hesitant about the electronic banking transition given the
high cost of the early machines. Additionally, executives were concerned that
customers would resist having machines handling their money.[31] In 1995,
the Smithsonian National Museum of American History recognised Docutel and
Wetzel as the inventors of the networked cash machine.The first modern cash machine
was an IBM 2984 and came into use at Lloyds Bank, Brentwood High Street, Essex,
England in December 1972. The IBM 2984 was designed at the request of Lloyds
Bank. The 2984 Cash Issuing Terminal was the first true ATM, similar in function to
today's machines and named by Lloyds Bank: Cashpoint; Cashpoint is still
a registered trademark of Lloyds TSB in the UK. All were online and issued a variable
amount which was immediately deducted from the account.

1.6 LOCATIONS OF ATMS

AN ATM ENCRYPTING
PIN PAD (EPP) WITH
GERMAN MARKINGS
Cash machines are placed not only near or inside the premises of banks, but also in
locations such as shopping centers/malls, airports, grocery stores, petrol/gas stations,
restaurants, or anywhere frequented by large numbers of people. There are two types
of cash machine installations: on- and off-premises. On-premises cash machines are
typically more advanced, multi-function machines that complement a bank branch's
capabilities, and are thus more expensive. Off-premises machines are deployed by
financial institutions and Independent Sales Organisations (ISOs) where there is a
simple need for cash, so they are generally cheaper single function devices. In
Canada, ATMs (also known there as ABMs) not operated by a financial institution are
known as "white-label ABMs".
In the US, Canada and some Gulf countries, banks often have drive-thru lanes
providing access to cash machines using an automobile.
Many cash machines have a sign above them, indicating the name of the bank or
organisation owning the terminal and possibly including the list of networks to which
it is connected.Cash machines can also be found in railway stations and metro
stations. In recent times, countries like India and some countries in Africa are
installing cash machines in rural areas, which are solar powered and do not require air
conditioning.

.1.7 FINANCIAL NETWORKS OF ATMS

Most cash machines are connected to interbank networks, enabling people to

withdraw and deposit money from machines not belonging to the bank where they
have their accounts or in the countries where their accounts are held (enabling cash
withdrawals in local currency). Some examples of interbank networks
include NYCE, PULSE, PLUS, Cirrus, AFFN, Interac,
Interswitch, STAR, LINK, MegaLink and BancNet.
Cash machines rely on authorisation of a financial transaction by the card issuer or
other authorising institution on a communications network. This is often performed
through an ISO 8583 messaging system.
Many banks charge cash machine usage fees. In some cases, these fees are charged
solely to users who are not customers of the bank where the cash machine is installed;
in other cases, they apply to all users.
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 a cash machine to
be a terminal that either has the vault within its footprint or utilises the vault or cash
drawer within the merchant establishment, which allows for the use of a scrip cash
dispenser.
Cash machines typically connect directly to their host or ATM Controller on
either ADSL or dial-up modemover a telephone line or directly on a leased line.
Leased lines are preferable to plain old telephone service (POTS) lines because they
require less time to establish a connection. Less-trafficked machines will usually rely
on a dial-up modem on a POTS line rather than using a leased line, since a leased line
may be comparatively more expensive to operate compared to a POTS line. That
dilemma may be solved as high-speed Internet VPN connections become more
ubiquitous. Common lower-level layer communication protocols used by cash
machines to communicate back to the bank
include SNA over SDLC, TC500 over Async, X.25, and TCP/IP over Ethernet.
In addition to methods employed for transaction security and secrecy, all
communications traffic between the cash machine and the Transaction Processor may
also be encrypted using methods such as SSL.

1.8 GLOBAL UTILISATION OF AN ATM

There are no hard international or government-compiled numbers totaling the

complete number of cash machines in use worldwide. Estimates developed
by ATMIA place the number of cash machines in use currently at more than 2.2
million, or approximately 1 cash machine per 3000 people in the world.
To simplify the analysis of cash machine usage around the world, financial
institutions generally divide the world into seven regions, due to the penetration rates,
usage statistics, and features deployed. Four regions (USA, Canada, Europe, and
Japan) have high numbers of cash machines per million people. Despite the large
number of cash machines, there is additional demand for machines in the Asia/Pacific
area as well as in Latin America.Cash machines have yet to reach high numbers in the
Near East and Africa.
One of the world's most northerly installed cash machines is located
at Longyearbyen, Svalbard, Norway.
The world's most southerly installed cash machine is located at McMurdo Station,
located in New Zealand's Ross Dependency, in Antarctica since 1997. There are two
cash machines at McMurdo, but only one active at any time, that are owned by Wells
Fargoand serviced once every two years by NCR.
Cash machines are ubiquitous on modern cruise ships and also can be found on
some US Navy ships.
1.9 HARDWARE OF ATM

A cash machine is typically made up of the following devices:

 CPU (to control the user interface and transaction devices)
 Magnetic or chip card reader (to identify the customer)
 PIN pad EEP4 (similar in layout to a touch tone or calculator keypad), manufactured as part of a
secure enclosure
 Secure cryptoprocessor, generally within 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 the transaction)
 Vault (to store the parts of the machinery requiring restricted access)
 Housing (for aesthetics and to attach signage to)
 Sensors and indicators
Due to heavier computing demands and the falling price of personal computer–like
architectures, cash machines have moved away from custom hardware architectures
using microcontrollers or application-specific integrated circuits and have adopted the
hardware architecture of a personal computer, such as USB connections for
peripherals, Ethernet and IP communications, and use personal computer operating
systems.

The vault of a cash machine is within the footprint of the device itself and is where
items of value are kept. Scrip cash dispensers do not incorporate a vault.
Mechanisms found inside the vault may include:
 Dispensing mechanism (to provide cash or other items of value)
 Deposit mechanism including a cheque processing module and bulk note acceptor (to allow the
customer to make deposits)
 Security sensors (magnetic, thermal, seismic, gas)
 Locks (to ensure controlled access to the contents of the vault)

Journaling systems; many are electronic (a sealed flash memory device based on in-
house standards) or a solid-state device (an actual printer )which access all records of
activity including timestamps, number of notes dispensed etc .this is considered
sensitive data and is secured in similar fashion to the cash as it is a similar liability .

1.10 SOFTWARE OF ATM

With the migration to commodity Personal Computer hardware, standard commercial "off-the-shelf"
operating systems and programming environments can be used inside of cash machines. Typical
platforms previously used in cash machine development include RMX or OS/2.

There is a computer industry security view that general public desktop operating
systems(os) have greater risks as operating systems for cash dispensing machines than
other types of operating systems like (secure) real-time operating
systems (RTOS). RISKS Digest has many articles about cash machine operating
system vulnerabilities.
Linux is also finding some reception in the cash machine marketplace. An example of
this is Banrisul, the largest bank in the south of Brazil, which has replaced the MS-
DOS operating systems in its cash machines with Linux. Banco do Brasil is also
migrating cash machines to Linux. Indian-based Vortex Engineering is manufacturing
cash machines which operate only with Linux. Common application layer transaction
protocols, such as Diebold 91x (911 or 912) and NCR NDC or
NDC+ provide emulation of older generations of hardware on newer platforms with
incremental extensions made over time to address new capabilities, although
companies like NCR continuously improve these protocols issuing newer versions
(e.g. NCR's AANDC v3.x.y, where x.y are subversions). Most major cash machine
manufacturers provide software packages that implement these protocols. Newer
protocols such as IFX have yet to find wide acceptance by transaction processors.
With the move to a more standardised software base, financial institutions have been
increasingly interested in the ability to pick and choose the application programs that
drive their equipment. WOSA/XFS, now known as CEN XFS (or simply XFS),
provides a common API for accessing and manipulating the various devices of a cash
machine. J/XFS is a Java implementation of the CEN XFS API.
While the perceived benefit of XFS is similar to the Java's "Write once, run
anywhere" mantra, often different cash machine hardware vendors have different
interpretations of the XFS standard. The result of these differences in interpretation
means that cash machine applications typically use a middleware to even out the
differences among various platforms.
With the onset of Windows operating systems and XFS on cash machines, the
software applications have the ability to become more intelligent. This has created a
new breed of cash machine applications commonly referred to as programmable
applications. These types of applications allows for an entirely new host of
applications in which the cash machine terminal can do more than only communicate
with the cash machine switch. It is now empowered to connected to other content
servers and video banking systems.
Notable cash machine software that operates on XFS platforms include Triton
PRISM, Diebold Agilis EmPower, NCR APTRA Edge, Absolute
Systems AbsoluteINTERACT, KALKalignite Software Platform, Phoenix Interactive
VISTA atm, Wincor Nixdorf ProTopas, Euronet EFTS and Intertech inter-ATM.
With the move of cash machines to industry-standard computing environments,
concern has risen about the integrity of the cash machine's software stack.
1.11 USES

Use of ATMs

1.Cash Withdrawal and Balance Enquiry

In spite of a number of innovative services being made available at many ATMs,

cash withdrawal stills remains the most accessed service at ATMs. However, the
migration of routine bank transactions like cash withdrawals and balance
enquiries from teller counters to ATMs significantly raises the potential for
savings in employee costs and greater employee focus on value-added revenue-
enhancing activities such as selling other financial products and advisory services
to customers.

2.Cash / Cheque Deposit

Again, due to the strong cash culture in India, cash deposits are most likely
higher than in other markets, especially cash deposits made by commercial
customers such as retail shopkeepers and those whose work involves substantial
travelling. A high cash withdrawal rate results in higher ATM servicing costs due
to frequent cash replenishment requirements. Recent developments in ATM
technology have made it possible to recycle cash in ATMs and its depositors need
to be addressed first.

ATM with Cheque deposit facility is not picking up in India, like other countries.
One of the reasons is the delay in collection of the cheque deposited in ATMs.
Cheque deposited in ATMs is to be collected and deposited in the designated
branch for collection.

3.Bill Payments

Most utilities have inadequate infrastructure for receiving bill payments resulting
in long queues at collection centres. Hence, bill payment at ATMs has achieved
noticeable acceptance by bank customers. Most banks provide this service
through bi-lateral arrangements with bill-payment service providers. ATM users
 register their water, electricity and telephone utility accounts with banks, check
their dues at ATMs, approve bill payments that are debited to their bank accounts
and receive printed receipts for the transactions.

4.Sale of Paper Based Products

ATMs are ideally suited to sell paper-based products and services such as tickets,
wireless phone recharge cards, financial products, etc. The screen interface allows
browsing and customization, access to bank accounts facilitate payments and
printing capabilities produce the actual product/service.

5. Kiosks

Information Kiosks has been introduced by many Banks and also by PSUs like Railways, Tourist centres
etc. While the revenue-producing capacity of non-emergency type of information at ATMs as a stand-
alone product is doubtful, many customers may be willing to pay a nominal fee for information having
“impulsive” demand such as cricket scores while they wait for their transactions to be processed. To
be sure, providing information, whether priced or free, will appeal to some customers and increase
customer satisfaction.

6.Third Party Advertising

In India, ATM advertising for third-party products is currently not allowed by Regulatory authorities.
However, the wait time at ATMs can be effectively used by banks to promote their own brands,
product and services. Furthermore, banks can tailor advertising messages based on customer
information easily available in their accounting and CRM databases. Customer wait-time at ATMs while
transactions get processed, typically between 10 to 25 seconds, has been profitably used by many
banks for their own advertising.

7. Money Transfers

Indians, who have migrated abroad or to cities, regularly use money orders and wire transfers to send
money to their families back home. ATM growth, especially in rural India, will capture substantial
business from the expensive wire transfer agents’ network and the customer-service lacking postal
network. ATMs can also facilitate the encashment of wire transfer amounts by allowing even non-
account holders to withdraw cash based on PINs or previously mailed special-purpose ATM cards.
8.Recharge Mobiles via ATMs

ATMs are also used to recharge mobile phones. Initiated in 2004 by ICICI Bank, now most ATM/Debit
Cardholders are able to recharge their pre-paid subscriptions of most mobile service providers from
anywhere in the country using their bank‘s ATMs or by sending a SMS.
The amount for recharging the mobile phone would be debited from the subscriber‘s Bank account
and the subscription would be directly recharged accordingly. The mobile top-up facility provides
convenience on ATMs and through mobile phones using SMS.

1.12 RELIABILITY
Before a cash machine is placed in a public place, it typically has undergone extensive testing with
both test money and the backendcomputer 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 minimise machine and network failures. Financial consequences of incorrect machine
operation also provide high degrees of incentive to minimise malfunctions .
If ATM networks do go out of service, customers could be left without the ability to make transactions
until the beginning of their bank's next time of opening hours.
Errors that can occur may be mechanical (such as card transport mechanisms;
keypads; hard disk failures; envelope deposit mechanisms); software (such
as operating system; device driver; application); communications; or purely down to
operator error.
Improper money checking can cause the possibility of a customer
receiving counterfeit banknotes from a cash machine. Bill validation technology can
be used by cash machine providers to help ensure the authenticity of the cash before it
is stocked in the machine; those with cash recycling capabilities include this
capability.

1.13 RELATED DEVICES

A talking ATM is a type of cash machine that provides audible instructions so that
people who cannot read a screen can independently use the machine, therefore
effectively eliminating the need for assistance from an external, potentially
malevolent source. All audible information is delivered privately through a
standard headphone jack on the face of the machine. Alternatively, some banks such
as the Nordea and Swedbank use a built-in external speaker which may be invoked by
pressing the talk button on the keypad.Information is delivered to the customer either
through pre-recorded sound files or via text-to-speech speech synthesis.
A postal interactive kiosk may share many components of a cash machine (including a
vault), but it only dispenses items related to postage.
A scrip cash dispenser may have many components in common with a cash machine,
but it lacks the ability to dispense physical cash and consequently requires no vault.
Instead, the customer requests a withdrawal transaction from the machine, which
prints a receipt. The customer then takes this receipt to a nearby sales clerk, who then
exchanges it for cash from the till.
A teller assist unit (TAU) is distinct in that it is designed to be operated solely by
trained personnel and not by the general public, does integrate directly into interbank
networks, and usually is controlled by a computer that is not directly integrated into
the overall construction of the unit.

A Web ATM is an online interface for ATM card banking that uses a smart card
reader. All the usual cash machine functions are available, except for withdrawing
cash. Most banks in Taiwan provide these online services.

1.14 CAREER
Shepherd-Barron joined De La Rue in the 1950s as a management trainee and grew to
become Managing Director of De La Rue Instruments (with a mandate to run down
the company). Under his leadership the first De La Rue Automated Cash System
(DACS) machine became operational outside the Enfield, north London, branch
of Barclays Bank in June 1967.He received the Order of the British Empire in the
2005 New Year's Honours list for services to banking as "inventor of the automatic
cash dispenser".Shepherd-Barron told the BBC that he was inspired by chocolate
vending machines.
Scottish inventor James Goodfellow was intimately involved in the development of an
alternative cash dispenser design, using PIN technology (which he invented while
working at Smiths Industries at the request of Chubb Locks and patented with
Anthony Davies as GB1197183 and US3905461). This PIN sequence was cited by
subsequent patents as "prior art device" and resembled modern ATMs more than
Shepherd-Barron's machine.However, Shepherd-Barron's machine (the idea for which
he claimed to have had in the bath, after having been locked out of his bank) was the
first to be installed (but only for a few days).
The DACS machines used cheque-like tokens (which were guillotined to the size of a
normal cheque inside the machine) which had been impregnated with a radioactive
compound of carbon-14, which was detected and matched against the personal
identification number (PIN) entered on a keypad. The short-range beta emission from
carbon-14 could be easily detected, and he determined that the radiation hazard was
acceptable as "you would have to eat 136,000 such cheques for it to have any effect
on you". A proposed PIN length of 6 digits was rejected and 4 digits chosen instead,
because it was the longest string of numbers that his wife could remember.

CHAPTER 2

INTRODUCTION OF ATM IN INDIA

2.1 INTRODUCTION OF FIRST ATM IN INDIA

HSBC -- the Hongkong and Shanghai Banking Corporation -- was the first bank
to introduce the ATM concept in India way back in 1987. Now, most of the banks
have their ATM outlets in India. The ATMs installed were from Diebold.ICICI bank
has the most number of ATMs across INDIA .The other banks UTI ,HDFC and IDBI
are leading in providing ATM facilities to their customers .PUBLIC SECTOR
BANKS are also taking installations of ATMS seriously for INDIAN MARKET .They
are setting up their own ATM centers or entering into the tie-ups with other banks
.THE CORPORATION BANK has the second largest network of ATMS amongst
THE PUBLIC SECTOR BANKS in INDIA.
2.2 INDIA’S FIRST POST OFFICE SAVINGS BANK INAUGURATED IN YES
BANK

Finance Minister P. Chidambaram inaugurated

the ATM service at Thiyagaraya Nagar Head
Post Office
Union Finance Minister P. Chidambaram inaugurated the country’s first post office
savings bank ATM at the Head Post Office in Thyagaraya Nagar here. The ATM was
part of an Information Technology (IT) modernisation project of the Department of
Posts.
Mr. Chidambaram said a total of Rs. 4909 crore had been allotted for the
modernisation in the interim budget. “The launching of the ATM was a step towards
making the department a completely technology oriented one,” he said adding that the
Core Banking Solutions (CBS) scheme would benefit as much as 1,55,000 post
offices.
A customer using the country's first post office savings bank ATM in T.Nagar HPO
after the facility was inaugurated by Union Finance Minister P. Chidambaram .
Mr. Chidambaram said the ATM would run on a trial basis for six months. Afterwards,
it would become an interoperable where cards of other banks could be used.
Commenting on the future of post offices in the IT era where sending letters and post
cards had become a rarity, Mr. Chidambaram said the department was inventing new
strategies to keep itself on the growth trajectory. For parcel services, people still
preferred the post office, he observed.
Secretary of Department of Posts Padmini Gopinath said about 2800 such ATMs
would be installed by end of 2015. Sixty-two post offices covering 64 lakh accounts
had already migrated to CBS. “Over 26,840 post offices will adopt CBS by 2016. All
account holders will be provided with an ATM card,” Ms. Padimini said. She said the
department was also toying with the idea of starting e-commerce services in rural
areas to improve its earnings.
2.3 ATM COMPANIES SEE SCOPE FOR MORE GROWTH

Despite public sector banks adding another 18,906 ATMs to their network in the last one year - an
increase of 26% - the average number of transactions per machine is keeping pace, indicating that
there is scope for growth.

RBI data shows that in June 2012, public sector banks had deployed 56,801 ATMs with average
transactions of 183 per day and average daily withdrawals worth of Rs 4.9 lakh per machine. A year
later, the number of ATMs has jumped to 75,707 machines and the average number of transactions
continues to be close at 167 with average daily withdrawal of Rs 4.8 lakh.

This is good news for the nine companies that have been awarded contracts by public sector banks to
invest in ATMs on their behalf and earn a return out of transaction charges they receive from banks.
Exactly one year ago, the finance ministry carved the nation into 13 zones and auctioned off each zone
to companies that agreed to the lowest transaction charge. All PSU banks have signed contracts with
nine firms which include start-ups, and giants like the Tata group and US-based NCR.

BANKS NO OF ATMS

JUNE ‘13 JUNE ‘12

PSU 75707 59485

PRIVATE 44664 38049

FOREIGN 1246 1368

TOTAL 121617 98902

Although average daily transactions have dropped from 183 to 167, bankers say that this is explained
by the fact that a large chunk of deployments took place in the second half of the year. Also
considering that new machines are being deployed On Tier-II and smaller centers, the rent - a major
components of costs has been dropped sharply.
What has been fortuitous for the ATM companies is a condition imposed by the finance ministry that
only ATMs made in India should be deployed. This has prevented costs rising because of imports.
Large manufacturers NCR, Diebold and Wincor have set up shop in India, given the number of ATMs in
India is expected to cross 1.75 lakh by the end of next year. Recently, one more manufacturer Petro of
Brazil has set up shop in Mahindra City in Rajasthan to manufacture ATMs there.nt - a major
component of costs - has dropped sharply.
2.4 WHITE LABEL ATM ( WLAS ) IN INDIA - GUIDELINES Traditionally, Automated Teller Machines
(ATMs) have respective bank’s logo. So just by looking, this is SBI’s ATM, this is ICICI’s ATM and so on.
 But White label ATM doesn’t have such Bank logo, hence called White label ATMs.
 RBI has given license / permission to non-bank entities to open such ATMs.
 Any non-bank entity with a minimum net worth of Rs.100 crore, can apply for white label ATMs.
(not just NBFC, any non-bank entity can apply.)
 Late 80s: first ATM in India; 2012: RBI issues guideline for White label; 2013: RBI gives
license/permission.
 Tata Communications Payment Solutions Limited =the first company to get RBI’s permission to
open White label ATMs.
 They started their chain under brandname “Indicash”.
 Other White label= Muthoot Finance, Srei Infra., Vakrangee Software, Prizm Payments, AGS. More
than 15 companies given such permission.
 The terms of existing rules / regulations only banks are permitted by RESERVE BANK OF INDIA
(RBI) to setup AUTOMATED TELLER MACHINE as extended delivery channels .Banks have played a
major role in encouraging ATM adoption by customers and modifying behavioral strategies in the
domain of personal banking .The investments in ATM have been leveraged for delivery of a wide
variety of banking services to customers across the banking industry and expanded the scope of
banking to anytime ,anywhere banking through interoperable platforms provided by the
authorized shared ATM NETWORK OPERATORS /CARD PAYMENT NETWORK OPERATORS .
 The specific criteria and guidelines subject to which prospective WLA operators will be authorized
to operate WLAS are listed in ANNEX - A.The roles and responsibilities of the stakeholders
( WLAO ,sponsor banks ,network ,operators ) and general conditions are indicated at ANNEX -B.
The additional information to be sought from the WLAO while submitting the applicable for
authorization to be given at ANNEX -C.
2.5 INDIA’S FIRST TALKING ATM LAUNCHED IN AHEMDABAD
India's first "talking" Automated Teller Machine (ATM) for visually impaired was today inaugurated in
Ahmedabad.

The ATM by the Union Bank of India is first-of-its-kind for the visually challenged and 4000th in the
countrywide network of the state-run bank.

According to BPA functionaries, the users have to plug-in a headphone into the ATM which has a
unique voice interface, and once it is done the machine guides them into further operations.

The ATM can also be operated by wheelchair-bound person as well.

There are about 20,000 blind persons in Ahmedabad and they can use this ATM to the fullest extent.
This ATM can be used by general public for transaction, the BPA said.

2.6 ATM CHALLENGES IN INDIA

 Power , environment and security ATMS need to be spread out across rural and semi -rural
geography primary market can’t be revived without retail population only 10 free ATM
transactions per month .The NDA’s ambitious financial inclusion plan .Unlike last time , growth is
starting with high interest rate .Just like prepaid mobile phone services changed the way people
transact .However ,India still lags behind in reach and technology in this space compared with
other emerging as well as developed countries .
 How have ATMs caught on in the Indian market?

It has been a cash-and-dash market largely, which means people go to ATMs mostly to withdraw cash
though an ATM machine can be used for various other functions. For instance, we recently rolled out a
system where a customer can walk up to an ATM machine and deposit cash and immediately get
credit. It is different from envelope deposit which most ATMs have. This is very useful for retailers who
collect cash throughout the day as Indian economy is mostly cash-driven.

Then, you can use ATMs to print or update your passbook. Apart from that, you can also make utility
bill payments. Though the technology has been there, banks do not encourage such transactions
mainly to curtail long queues.

Is this also because of shortage of ATM machines in India?

Yes. If you look at India today, we have about 74 ATMs per million of the population. In comparison,
China has over 200 machines per million and the US has 1,300 ATMs per million. So ATM penetration
is very low but then even bank penetration is low in India; 50% of the population is unbanked. This is
in sharp contrast with other emerging economies.
But by 2017, we are expecting ATM population in India to be 400,000 compared with around 140,000
at present. This will be largely driven by banks going to rural areas and government initiatives such as
direct benefit transfer. Today, we are seeing a 25% year-on-year growth in ATM penetration and this
will increase, but we have a long way to go.

As of now, you find ATMs in clusters at one location, mostly in metros and urban areas. These need to
be spread out across rural and semi-rural geography.

The white label ATMs (WLAs), for which the Reserve Bank of India has issued licences, will also help in
penetration. These will be private label ATMs and will not be any bank’s brand. For instance, Tata
Communications has launched Indicash and it is using our ATMs.

How will these WLAs charge?

The first five transactions are free anyway. Beyond that banks will take a call on charging customers.
WLAs will be paid by the banks whose cards are used at these ATMs.

Will this help banks to minimize ATM cost?

Yes. In fact, the ministry of finance took an initiative wherein it divided the country into 16 clusters
and said that all public sector banks will buy under a common platform and these clusters were
auctioned to service providers. These service providers were asked to deploy ATMs on an outsourced
model for public sector banks. The branding will be that of the bank, cash will be provided by the
bank, but it (the unit) will be managed by service providers

As of now, you find ATMs in clusters at one location, mostly in metros and urban areas. These need to
be spread out across rural and semi-rural geography.

The white label ATMs (WLAs), for which the Reserve Bank of India has issued licences, will also help in
penetration. These will be private label ATMs and will not be any bank’s brand. For instance, Tata
Communications has launched Indicash and it is using our ATMs.

How will these WLAs charge?

The first five transactions are free anyway. Beyond that banks will take a call on charging customers.
WLAs will be paid by the banks whose cards are used at these ATMs.

Will this help banks to minimize ATM cost?

 Yes. In fact, the ministry of finance took an initiative wherein it divided the country into 16
clusters and said that all public sector banks will buy under a common platform and these
clusters were auctioned to service providers. These service providers were asked to deploy ATMs
 on an outsourced model for public sector banks. The branding will be that of the bank, cash will
be provided by the bank, but it (the unit) will be The 16 clusters that I mentioned, where new
ATMs are being deployed, are all biometrics-enabled. The government came out with the
requirement of 63,000 such ATMs to be deployed in these clusters in the next two years. These
will have two levels of authentication. The machines that have already been deployed need to be
updated.managed by service providers.

We see BCs complementing our business rather than a challenge. We need penetration and this can
only happen through BCs. In the districts where BCs have gone, they have generated banking
transactions. They open accounts and then cards come into play. In a way they are a catalyst for us.

What challenges do you face in India?

The biggest challenge that we face while deploying ATMs in India is the availability of power. So we
use solar power in certain pockets.

Another challenge is environmental conditions. We have machines which work in even 45 degrees
Celsius temperature.

The other aspect is security. As ATM penetration increases, there will be chances of frauds and crimes.
Even now we see some rudimentary crime happening such as thieves picking up machines; so we now
bolt machines to the ground. We have also seen some sophisticated crime happening such as card
skimming, wherein your card data gets compromised. From the technology perspective, we are
coming up with anti-skimming devices.

2.7 ATM SERVICES

 ATM FEATURES
 Cash withdrawal the most popular service on ATMS enables customers to
withdraw up to daily limit of rs.40000/- limit on classic debit card .Higher value
cards permit daily a withdrawal up to rs.1 lakh.
 Fast cash service which enables you to withdraw your preferred amounts with
just a touch .The options in the denominations of 100 ,
200,500,1000,2000,3000,5000,10000 are available .
 Pin change uses this service to change your password at regular intervals .
 Balance enquiry expecting a inflow of funds in your account ? use this
service to check the current available balance in your account .
  Mini-statement gives you an insight into the last 10 transactions to your
account.
 Credit card payments ( visa )uses this service to pay the bill of any visa credit
card .
 Mobile top-up talk non stop and recharge your mobile prepaid connection from
any of our 43000+ ATMS is possible . A popular service amongst customers , it
ensures you never run out of time to catch up with your dear ones over the mobile
network .
 Cheque book request order your cheque book without visiting the branch or filing
in any transaction slips . Remember to update your registered address in the
branch as the cheque book will be delivered to the address registered in the
branch.
 Mobile banking registrations register / deregister your mobile banking application
using your ATM.
 Inter -mobile mobile payment system you can register for the imps service at all
our ATMS. This service allows you to transfer money to any other person with a
registered IMPS number instantly .
2.8 BENEFITS AND RISKS OF ATM

Automatic Teller Machines

The ATM, like a human bank teller, helps you perform your banking business. The
first ATM in 1969 was limited to dispensing cash. By 1980, the ATM had begun to
handle a range of transactions, including deposits and balance inquiries. With more
than 1 million AMTs worldwide, your choices include exterior walk-up and drive-up
ATMs, interior ATMs inside of banks and businesses, and ATMs inside closed
vestibules you access with your ATM card.

Benefits
Convenience is a major ATM benefit. You don’t need to get out of the car to use a
drive-up ATM.
You avoid long teller lines in banks and can use the ATM to withdraw cash, make
deposits and check account balances.
You can find an ATM quickly if you need cash when cards and checks won’t do.
Use of the ATM to get cash instead of swiping the debit card can help with budgeting
by controlling spending and providing a statement of transactions instead of a bunch
of receipts.
Traveling abroad? Enjoy favorable exchange rates when ATMs dispense foreign
currency and your bank debits your account in U.S. dollars.

Risks
Personal safety is a risk with ATMs in empty parking lots, poorly lighted places, or
behind bank buildings.
In these places, there's always the risk someone will be lurking nearby to rob you of
your money when you are finished.

There is also the risk that more clever thieves will swipe your PIN code.
This risk increases with poorly maintained or unfamiliar ATMs.
Consumer protection agencies warn that criminals attach mirrors to ATMs to capture
PIN numbers or tamper with the machines in other ways to get your cash or
information.
You will also be charged fees for using ATMs not connected to your bank or those in
foreign countries.
 CHAPTER 3

ATM INSTRUCTIONS AND SECURITY

3.1 12 GOLDEN RULES TO KEEP YOUR ATM TRANSACTIONS SAFE AND

SECURE
1. Please sign on the reverse of the card immediately on receipt.
2. Change your ATM Pin regularly
3. Never keep the PIN with the debit card or write on it . Always memorize it .
4. Do not provide the ATM CARD and PIN details to anyone ,including BANK/
IBA/ RBI/ GOVT.AGENCY/ FAMILY/ FRIENDS ETC.Bank or any other
institution will never ask for the information .
5. Do not let strangers come in to the ATM room or take their help to complete the
transactions .
6. Hide the keypad while keying in your PIN at ATM/POS Terminals.
7. Do not throw your transaction slip in the ATM room as it contains your account
information .
8. Always wait till the ATM returns to the idle mode and the green light is blinking
9. Insist on swiping your card in your presence in HOTELS/SHOPS/MALLS etc.
10. Never swipe your card at POS machine kept at unknown temporary stalls .
11. Block and destroy your old card ,when you get a new one .Register your mobile
number at the branch to get SMS alerts for all transactions .
12.HOTLIST your card immediately on losing it by calling your bank.
3.2 SECURITY
Security, as it relates to cash machines, has several dimensions. Cash machines also
provide a practical demonstration of a number of security systems and concepts
operating together and how various security concerns are addressed.
1.Physical
Early cash machine security focused on making the terminals invulnerable to physical
attack; they were effectively safes with dispenser mechanisms. A number of attacks
resulted, with thieves attempting to steal entire machines by ram-raiding. Since late
1990s, criminal groups operating in Japan improved ram-raiding by stealing and using
a truck loaded with heavy construction machinery to effectively demolish or uproot an
entire cash machine and any housing to steal its cash.

Another attack method, plofkraak, is to seal all openings of the cash machine
with silicone and fill the vault with a combustible gas or to place an explosive inside,
attached, or near the machine. This gas or explosive is ignited and the vault is opened
or distorted by the force of the resulting explosion and the criminals can break in. This
type of theft has occurred in
the Netherlands, Belgium, France, Denmark, Germany and Australia.These types of
attacks can be prevented by a number of gas explosion prevention devices also known
as gas suppression system. These systems use explosive gas detection sensor to detect
explosive gas and to neutralise it by releasing a special explosion suppression
chemical which changes the composition of the explosive gas and renders it
ineffective.

Several attacks in the UK (at least one of which was successful) have involved
digging a concealed tunnel under the cash machine and cutting through the reinforced
base to remove the money.

Modern cash machine physical security, per other modern money-handling security,
concentrates on denying the use of the money inside the machine to a thief, by using
different types of Intelligent Banknote Neutralisation Systems.

A common method is to simply rob the staff filling the machine with money. To avoid
this, the schedule for filling them is kept secret, varying and random. The money is
often kept in cassettes, which will dye the money if incorrectly opened.

.
2.Transactional secrecy and integrity
The security of cash machine transactions relies mostly on the integrity of the
secure cryptoprocessor: the cash machine often uses general commodity components
that sometimes are not considered to be "trusted systems".
Encryption of personal information, required by law in many jurisdictions, is used to
prevent fraud. Sensitive data in cash machine transactions are
usually encrypted with DES, but transaction processors now usually require the use
of Triple DES.Remote Key Loading techniques may be used to ensure the secrecy of
the initialisation of the encryption keys in the cash machine. Message Authentication
Code (MAC) or Partial MAC may also be used to ensure messages have not been
tampered with while in transit between the cash machine and the financial network.
Customer identity integrity
There have also been a number of incidents of fraud by Man-in-the-middle attacks,
where criminals have attached fake keypads or card readers to existing machines.
These have then been used to record customers' PINs and bank card information in
order to gain unauthorised access to their accounts. Various cash machine
manufacturers have put in place countermeasures to protect the equipment they
manufacture from these threats.
Alternative methods to verify cardholder identities have been tested and deployed in
some countries, such as finger and palm vein patterns, iris, and facial
recognition technologies. Cheaper mass-produced equipment has been developed and
is being installed in machines globally that detect the presence of foreign objects on
the front of ATMs, current tests have shown 99% detection success for all types
of skimming devices.

3.Device operation integrity

Openings on the customer side of cash machines are often covered by mechanical
shutters to prevent tampering with the mechanisms when they are not in use. Alarm
sensors are placed inside cash machines and their servicing areas to alert their
operators when doors have been opened by unauthorised personnel.
To protect against hackers, cash machines have a built-in firewall. Once the firewall
has detected malicious attempts to break into the machine remotely, the firewall locks
down the machine.

Rules are usually set by the government or cash machine 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 a
cash machine and the money either gets outside of the cash machine'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. Customers often commented that it is difficult to
recover money lost in this way, but this is often complicated by the policies regarding
suspicious activities typical of the criminal element

4.Customer security

In some countries,
multiple security
cameras and securit
y guards are a
common feature.In
the United States,
The New York
State Comptroller's Office has advised the New York State Department of Banking to
have more thorough safety inspections of cash machines in high crime areas.

Consultants of cash machine operators assert that the issue of customer security
should have more focus by the banking industry; it has been suggested that efforts are
now more concentrated on the preventive measure of deterrent legislation than on the
problem of ongoing forced withdrawals.

At least as far back as July 30, 1986, consultants of the industry have advised for the
adoption of an emergency PIN system for cash machines, where the user is able to
send a silent alarm in response to a threat.Legislative efforts to require an emergency
PIN system have appeared in Illinois, Kansas and Georgia,but none have succeeded
yet. In January 2009, Senate Bill 1355 was proposed in the Illinois Senate that revisits
the issue of the reverse emergency PIN system. The bill is again supported by the
police and denied by the banking lobby.

In 1998, three towns outside Cleveland, Ohio, in response to a cash machine crime
wave, adopted legislation requiring that an emergency telephone number switch be
installed at all outdoor cash machines within their jurisdiction. In the wake of a
homicide in Sharon Hill, Pennsylvania, the city council passed a cash machine
security bill as well. As of July 2009, cash machine security legislation is pending in
New York, New Jersey, and Washington D.C.

In China and elsewhere, many efforts to promote security have been made. On-
premises cash machines are often located inside the bank's lobby, which may be
accessible 24 hours a day. These lobbies have extensive security camera coverage, a
courtesy telephone for consulting with the bank staff, and a security guard on the
premises. Bank lobbies that are not guarded 24 hours a day may also have secure
doors that can only be opened from outside by swiping the bank card against a wall-
mounted scanner, allowing the bank to identify which card enters the building. Most
cash machines will also display on-screen safety warnings and may also be fitted with
convex mirrors above the display allowing the user to see what is happening behind
them.

As of 2013, the only claim available about the extent of cash machine-connected
homicides is that they range from 500 to 1000 per year in the US, covering only cases
where the victim had an ATM card and the card was used by the killer after the known
time of death.

3.3 FRAUD

As with any device containing objects of value, cash machines and the systems they
depend on to function are the targets of fraud. Fraud against ATMs and people's
attempts to use them takes several forms.

The first known instance of a fake cash machine was installed at a shopping mall
in Manchester, Connecticut in 1993. By modifying the inner workings of
a Fujitsu model 7020 cash machine, a criminal gang known as the Bucklands Boys
stole information from cards inserted into the machine by customers.

WAVY-TV reported an incident in Virginia Beach in September 2006 where a hacker

who had probably obtained a factory-default administrator password for a filling
station's white-label cash machine caused the unit to assume it was loaded with US$5
bills instead of $20s, enabling himself—and many subsequent customers—to walk
away with four times the money withdrawn from their accounts.THE type of scam
was featured on the TV series The Real Hustle.

Cash machine 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). In order to give customers access to
cash, customers may be allowed to withdraw cash up to a certain amount that may be
less than their usual daily withdrawal limit, but may still exceed the amount of
available money in their accounts, which could result in fraud if the customers
intentionally withdraw more money than what they had in their accounts.

1.Card fraud
In an attempt to prevent criminals from shoulder surfing the customer's personal
identification number (PIN), some banks draw privacy areas on the floor.

For a low-tech form of fraud, the easiest is to simply steal a customer's card along
with its PIN. A later variant of this approach is to trap the card inside of the cash
machine's card reader with a device often referred to as a Lebanese loop. When the
customer gets frustrated by not getting the card back and walks away from the
machine, the criminal is able to remove the card and withdraw cash from the
customer's account, using the card and its PIN.

This type of fraud has spread globally. Although somewhat replaced in terms of
volume by skimming incidents, a re-emergence of card trapping has been noticed in
regions such as Europe, where EMV chip and PIN cards have increased in circulation.

Another simple form of fraud involves attempting to get the customer's bank to issue
a new card and its PIN and stealing them from their mail.

By contrast, a newer high-tech method of operating, sometimes called card

skimming or card cloning, involves the installation of a magnetic card reader over
the real cash machine's card slot and the use of a wireless surveillance camera or a
modified digital camera or a false PIN keypad to observe the user's PIN. Card data is
then cloned into a duplicate card and the criminal attempts a standard cash
withdrawal. The availability of low-cost commodity wireless cameras, keypads, card
readers, and card writers has made it a relatively simple form of fraud, with
comparatively low risk to the fraudsters.

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 unauthenticated devices, and by attempting to
make the outside of their cash machines tamper evident. Older chip-card security
systems include the French Carte Bleue, Visa Cash, Mondex, Blue from American
Express and EMV '96 or EMV 3.11. The most actively developed form of smart card
security in the industry today is known as EMV 2000 or EMV 4.x.

EMV is widely used in the UK (Chip and PIN) and other parts of Europe, but when it
is not available in a specific area, cash machines must fall back to using the easy–to–
copy magnetic stripe to perform transactions. This fallback behaviour can be
exploited.However, the fallback option has been removed on the cash machines of
some UK banks, meaning if the chip is not read, the transaction will be declined.

Card cloning and skimming can be detected by the implementation of magnetic card
reader heads and firmware that can read a signature embedded in all magnetic stripes
during the card production process. This signature, known as a "MagnePrint" or
"BluPrint", can be used in conjunction with common two-factor authentication
schemes used in cash machine, debit/retail point-of-sale and prepaid card applications.

The concept and various methods of copying the contents of an ATM card's magnetic
stripe onto 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 more than £1 million by pointing high-definition video
cameras at cash machines from a considerable distance and recording the card
numbers, expiry dates, etc. from the embossed detail on the ATM cards along with
video footage of the PINs being entered. After getting all the information from the
videotapes, he was able to produce clone cards which not only allowed him to
withdraw the full daily limit for each account, but also allowed him to sidestep
withdrawal limits by using multiple copied cards. In court, it was shown that he could
withdraw as much as £10,000 per hour by using this method. Stone was sentenced to
five years and six months in prison.
3.4 CARD SKIMMING

‘CARD SKIMMING
’ is the illegal copying
of the information
from the magnetic
strip of a credit or
ATM card .It is more direct version of phishing scam.

The scammers try to steal your details so they can access your accounts .once
sccammers have skimmed your card ,they can create a fake card or cloned card with
your details on it .The scammer is then able to run-up charges on your account.

CARD SKIMMING is also a way for scammers to steal your identity ( your personal
details ) and use it to commit identity fraud .By stealing your personal details and
account numbers the scammer may be able to borrow money to take out loans in your
name .

3.5 ADVANTAGES OF ATM

Until now I was under the impression that Bank issues ATM cum Debit Card only for
withdrawing the cash from the ATMs. These interactions with my Relationship
Manager set me thinking if ATM cards have other uses also.
To my pleasant surprise I found that it is quite beneficial to have the ATM Debit Card
of your Bank. Therefore, I am sharing with you the Advantages and Benefits of using
Bank ATM Cards

 Advantages of using Bank ATM cum Debit Card

1. Quick Cash Withdrawal
As the name suggests and is well known to all, just insert your ATM Debit Card into
the Automated Teller Machine, punch the code and the amount you want to withdraw
and you get the cash in your hands.
In addition to the above there are many lesser known but useful features such as:
2.Anyone Can Have Bank Card
All you need is a Bank Account to get a debit card cum ATM card issued to you. This
is much easier than applying for a credit card as a debit card is simply linked to your
bank account.
3.Account balance inquiry
You can check your account balance at the ATM. Also there is a facility to get mini
statement of your bank account.
4. Details of recent transactions
Through the ATM card you can quickly get the mini statement giving the details of
recent transactions carried out in your bank account. Not only that, you can print this
statement too.
Of course, the information would be in brief and limited to the last 8 or 10
transactions only.
5. Deposit cash / cheques
Did you miss the banking hours or are you far away from the bank branch? Now there
is no need to go the branch to deposit cash or cheques. Just go to the nearest ATM and
do the needful. The ATM clearing times are displayed at the ATM.
6. Request for new cheque book
As in my case you can also make a request for a new cheque book through the ATM
24 x 7, instead of driving down to the branch and filling in the requisition slip.
7. Transfer funds between accounts within the same Bank
If you are holding the ATM card then most of the banks allow you to transfer the
funds from one account to another account on a real time basis. Some banks also let
you transfer funds from your accounts to any third party provided the account is with
the same bank.
8. Pay your Utility bills
Under this useful feature provided by most of the banks, you can make payment for
utility bills.
9. Make other payments too
Using your ATM card you can now make payment for your Credit Card Bill, Pay
Taxes, do Mobile Phone re charge etc

3.6 DISADVANTAGES OF ATM

1. Fraud
The potential for identity theft is a major disadvantage related to automatic teller
machines. Fraudulent card readers, called skimmers, are placed over the authentic
reader to transfer numbers and codes to nearby thieves. Spy cameras are also used by
password voyeurs to collect access codes. Lost access cards are another potential for
fraud. The Federal Trade Commission states that people are not responsible for
unauthorized use of a card, if it is reported immediately. If the loss is not noticed
immediately, consumers may lose all funds in an account, if notice is not given before
money transfers are made. Incorrect withdrawals noted on monthly statements must
be reported, or else consumers are responsible for the amounts, even when removed
by fraudulent means, according to the U.S. Federal Trade Commission.

2. Theft
ATMs are a magnet for easy theft. Robbers are guaranteed cash from consumers
visiting the money machines. Although ATM robberies are not common (only one
attack in every 2.5 million transactions), according to the California Banking Industry,
the U.S. Department of Justice (DOJ) reports that approximately 15 percent of people
attacked and robbed at ATM stations are killed or injured. The DOJ claims the average
loss is between $100 and $200.

3. Fiscal Planning Issues

As a safety measure, many ATMs list only the deposit or withdrawal amount and omit
the balance from the account. People using an ATM for frequent banking are not
informed of the total amount in the account when funds are withdrawn or deposited,
as opposed to traditional checking which provides a register to maintain a running
account of the balance. This lack of recording allows some customers to overdraw
accounts, adding penalty charges.
4. Operation Issues
ATMs located in busy locations may not have adequate funds for busy holiday
weekends when large numbers of people are taking out cash. Most machines require
envelopes to deposit checks and cash, and these may also be in short supply,
preventing customers from depositing funds. Damaged machines leave the bank client
with no alternative during non-banking hours.

5. Bank Fees
As bank consolidation continues, fewer companies own ATMs, and they limit access
to automated banking. U.S. Senator John Kerry states that two banks, Fleet Bank and
Bank Boston, operate nearly two thirds of all the ATMs in New England. This
monopoly reduces competition. Kerry warns that "policy makers should be watchful
of the capacity to which ATM surcharges become more prevalent." Reliance on
automatic teller machines for personal banking means increases in bank fees. Most
banks allow an unlimited number of withdrawals from same system ATMs, but charge
a fee between $2 and $5 for withdrawals from machines outside the system.

3.7 TYPES OF ATMS

1.AN ATM BASIC CARD
YOUR basic ATM card only has few uses .It can be used at any ATM machine for the bank that issued it
and sometimes at other banks for a fee .You can use your ATM card to withdraw and deposit money
,check your account balance and transfer funds .Some ATM CARDS also have a more uses like paying
loans and getting cash advances ,however ATM cards cannot be used to make purchases .
2.DEBIT CARD
DEBIT CARD has all the features of a regular ATM CARD with added features of a debit card .This card
can be used to make purchases at any store or online .Typically they will have the credit card logo on
them ,although they do not work the same way as credit cards .Every time an ATM debit card is
used ,money is taken out of the checking account which it is linked to.
3.ATM CREDIT CARD
A new type of DEBIT CARD is available at some banks .This type of card has all the features of the ATM
DEBIT CARD plus the features of credit card.This card is not only attached to checking account ,but also
to the line of credit .This means that if the person overdrafts on the account they will not incur any
fees and will instead have money taken out of their credit line to be paid back with interest when the
funds are made available.
4.IDENTIFICATION
There are many banks that offer ATM AND ATM DEBIT CARDS that also be used as a form of picture
ID.You can pay a small fee have your picture put on your card as added form of security .If your card is
lost or stolen to one else will be able to use it .Not all banks offer this card ,but they are becoming
more common .
5.DECORATIVE
Besides the added feature to an ATM CARD ,there are also options to change the appearance of
card .Some banks also give you the option of customizing your card .You can pick the image or images
you want to be in the background and they will create a card for you with the images you selected .
6.SECURITY
Unlike bank tellers ,ATM does not require the person performing the transaction to present picture
identification .Rather ,the person must only insert the bank card and enter a personal identification
number .If the bank card is stolen and the number ascertained ,an authorized person can easily access
the account .
7.INABILITY TO PERFORM COMPLEX TRANSACTIONS
ATMS can only perform relatively basic transactions .This means that people who need to complete
these longer transactions will be forced to use the teller ,restricting the use of ATM for people who
need to complete simple business . In this sense ,the ATM is rather like the express line in a
supermarket -faster for some ,but unavailable to others.
8.DIFFICULTY OF USE
The performance of business at an ATM is generally quicker than that at a human teller .However ,the
ATM is incapable of providing personalized instruction to the user in a way that a human teller can
.This can result in longer times if the user is currently using the machine is struggling to complete the
transaction .

9.EATING A CARD
Occasionally ,ATMS will malfunction and swallow a users ATM CARD .The customer will then be
directed to contact to contact a service number or their bank and wait for report technician to retrieve
this card .While this happens only rarely ,if it occurs on a weekend or at night ,the user may be left to
wait for several days before they can again use their card ,something that would not happen with a
human cashier .
 CHAPTER 4

ATM MACHINE INFORMATION

4.1 HOW TO WITHDRAW MONEY FROM AN ATM

Step 1 : Insert Card

Insert Card

ATM cards comes in two types — debit cards and credit cards. Debit cards are mostly used in ATMs,
and it offers you to withdrawal cash which you have in your savings account. Vise versa from credit
card you could credit money from your account.

But in today’s topic we will discourse about the process of withdrawal money from ATM through your
card.
Now first insert your ATM card in the ATM machine.(you may see a blinking green light in the machine,
where you have to put your card.) please mind to insert your card as the picture shows; otherwise the
machine could not be able to read your card.

Step 2 : Select your language

This is the most easiest task to do I think. Select the language you like.

Step 3 : Enter your PIN

Enter your pin

Now come the most important part. Use Keypad to enter your 4 digit pin.
Please make sure some things before you enter your pin

1. There is no camera or any person who can see your pin number
2. Always make sure that the pin is entering by you is the same pin of that
ATM card(otherwise the card could be locked).

Step 4 : Transaction Type

Transaction type

You can see now many types of options like Withdraw Money, Deposit Money, Balance Enquiry, Bill
Pay etc. For withdrawal cash you have to chose Withdraw Money option.

Step 5 : Account Type

ATM screen will show various types of account. Select your account type that may be saving or current
etc.

Step 6 : Enter Amount

It is also a easy task. Chose the amount you

want to withdrawal. But make sure that the
amount you are entering is not more than your
main balance.And press correct option.

Step 7 : Take Your Money

Now comes the most interesting part. The money comes from the cash dispenser machine. Take your
money before 30 second.
Take receipt

Then a question would appear on the and ask

you would like to take a receipt. Press yes to
proof that you withdrew money and check the
balance.

Step 8: Another Transactions

If you want another transaction, chose that option.

Step 9: Ending Your Session

Once you've completed your transaction press cross or cancel button before leave the machine
room.Don't forget to take your card and money!

4.2 PROCESS OF USING AN ATM CARD

1. Starting the Process

 . People using ATMs will occasionally be targets of robberies and other crimes, so you'll want to be
sure to be safe. First, make sure that the area is well lit and you are alone. Be on your guard if other
people show up. Stand so that your screen and key presses are masked.
 You'll also want to look at the machine itself. Devices called card skimmers are becoming more
common and, while there is no universal signal that an ATM is compromised, if something seems off
about how the card slot looks then you'll just want to find another machine to use.
 Only use ATMs during the day in well trafficked areas, if possible.

2.Insert your debit card into the ATM.

Mobile banking cards come in two varieties — debit cards and credit cards. Debit cards are most
frequently used in ATMs; they're linked to the exact amount you have in your bank account. Credit
 cards can be used in some cases, but fees and interest rates usually make them expensive to use.
Insert your card into the card slot, facing in the direction indicated by the image on the machine.
 Particular machines may have a special fee (usually when in a tourist area) which should be labeled on
the machine.
 If you travel out of the country, there may be additional fees associated with the distance or currency
change.

3. Try to use ATMs and debit cards that are issued by the same bank.

For example, if you own a Chase debit card, look for a Chase ATM or local branch. Although you can
use almost any debit card on almost any ATM, you will likely be charged an additional fee for
withdrawing money if the ATM is for a bank other than one you have an account with. Additionally,
some of the services offered by the ATM may not be available if your card and ATM don't match.

4 .Select your language

Most ATMs will offer transactions in several different languages, usually at least three or more
dependent on where you live. Where in the process you change the language can depend on the
machine, but it is usually directly after inserting your card.

5. A Enter your PIN when prompted.

"PIN" stands for "personal identification number," and it's a four-digit password people use to access
their bank account. Enter your PIN number when asked to by the machine, making sure to shield the
pad with your hand so that nearby onlookers can't see it. You should also watch out for cameras that
are placed on the ATM itself, as these can be placed by criminals in order to steal your card
information.

2.Completing Transactions
6.WITHDRAW MONEY
You can withdraw money for almost any ATM, regardless of the associated bank (though this may
incur fees). You will usually have two withdrawal options:
 Fast cash - which allows you to quickly withdraw a set amount as labeled on the machine. This is
usually either $40, $50, or $60.
 Targeted withdrawal - which allows you to specify how much you want to withdraw by typing in the
amount.
 Be careful of your limits. Most ATMs and banks limit how much you can withdraw from an ATM in a
given day. The limit varies widely based on your bank and your account type, but limits between $300-
$1000 are common.

7.DEPOSIT MONEY
You can deposit money as well, as long as you are using an ATM associated with your bank. You should
be presented with the choice of what account you want the money deposited in to. The funds may
not be immediately available, or only some of them may be immediately available. There are two ways
that you can deposit money:
 Deposit cash. This is usually fed into the machine, though sometimes a deposit envelope may be
required. If you are using a modern ATM, you should be able to insert a stack of bills, often between
30-50 bills at a time, and the machine will count them up automatically.
 Deposit checks. Older machines may require that you use a deposit slip in order to deposit a check,
but for most modern machines you can simply feed the check into the ATM. The ATM will provide you
with specific instructions, and a deposit envelope if you don't have one.
 If you do need to fill out a deposit envelope, it's better to get the envelope from the machine and then
exit out of the transaction, filling out the details and inserting the check into the envelop in your car or
other safe location. Simply return to the machine, reinsert your card, and start the process over again
once the envelope is prepared.

8.Check your account balance.

You should have the option to check your account balance, or how much money you have available in
your account, so long as you are using an ATM associated with your bank. This balance is often printed
out on a receipt or sheet of paper, although it may be displayed on the screen as well.

9.Transfer money or make payments.

Many bank's ATMs will allow you to transfer money between multiple accounts you hold with
the same bank, or even transfer money to other people's accounts. Occasionally you may also
have the option to make payments, such as paying pre-set up bills or fees on your bank
account itself.

.
3.Ending Your Session

1.Follow the prompts to end your session.

Once you've completed your transaction, you'll have to follow the on-screen prompts in order to exit
out and get your card back. Often times, a short cut can be to simply press the red X on the keypad,
which is similar to the "back" option on a computer.
2.Don't forget to take your card and money
It's easy to forget to take your money or card when you're in a hurry, but be careful and be extra sure
to take all of your belongings when you're done. This includes a cell phone you might have set down
on the machine!
3.Switch to mobile banking.
Be aware that for everything but withdrawing money, you can now use mobile banking if you bank
with one of the major banks. Mobile banking, which uses your smart phone, allows you to deposit
checks, check your balance, transfer money, and includes many of the other services of the ATM.
4.3 HOW TO CHECK THE ACCOUNT BALANCE THROUGH AN ATM CARD

Checking Bank Balances Using an ATM

1. Get your ATM/debit card.

Make sure you activate it and know your personal identification number (PIN) before going to
the ATM. In some cases, it will activate the first time you place it in the ATM.

2.Insert your ATM card into an ATM.

You can avoid fees by using your bank’s ATM, but most machines will allow you to check your
balance for free.

3.Type in your PIN on the machine.

Your “PIN” stands for personal identification number, a four-digit number you should have set
up when you opened your account. Then, look for the menu that gives you options. Scroll
through these options until you find one that includes the word “balance.

4.Select the option to view your balance.

Then, you will be able to go back and make a withdrawal or print that balance.

5.Opt to withdraw money from the ATM.

Ask for a receipt. Your checking balance will be printed onto your receipt for your records.

4.4 HOW TO GET CASH WITHOUT SWIPPING THE ATM CARD

Withdraw Money Without Using Debit Card:
Cardless Cash Withdrawal From ATM Machine

Many times it happens with us that we are in need of money, and we used to forget
our ATM card at home. Or many times the card will not work in the ATM machine or
does not accepted. It can happen to anyone. So some bank provides you facility to
withdraw money, without having ATM card. Now you may wonder how will the
money from ATM without an ATM card is withdrawn. But it’s possible. Without
having ATM or debit card you can able to withdraw money easily. For this, you will
go through a process. Let us know what’s the whole process.

1.Register yourself

To get this benefit or say feature you firstly have to register yourself in the bank. The
registration can be done or completed with help of bank branch or through Internet
banking too. Also you can also call to bank’s customer care for registration.

2.Get “MPIN” With 4 Digit

Once registered in the bank, you will able to get 4 digit user MPIN (Mobile Personal
Identification Number). It could be like your ATM PIN number but it is different one.
You can use it like Transaction security pin code or the Authority code too.After
registration process, you will have to download the bank related application on your
mobile phone. Users are also provided with the option of the SMS channel. Through
this, the bank will send the application on your mobile web link.

3. Similar Facilities like ATMs

To withdraw money from ATM machine without debit card is completely free, means
this is provided to users free of cost without charging any penny. After registration
you will get same facilities from Mpin like your ATM card. It the help of this user can
do things like: intra-bank, mobile-to-mobile, mobile-to-account fund transfers and net
electronic funds transfers easily. However, Interbank Mobile Payment Service
(Aimpis) will also be the feature of this mobile application.

4.Money Withdraw Limit Per Day (Fund Transfer)

You are thinking about daily money withdrawals limit without ATM Card in your
mind too, We are also happy to give you the answer. Indeed, with the help of Mpin
you can withdraw up to Rs 5000 per day limit.In Aimpis, the fund transfer limit will
be increased up to 30,000 per day.With respect to SMS, this limit is up to 4000 per
day. However, with the bill payment, transaction limit is Rs 20,000 every day.

5.How to Withdraw Money

After registration and getting Mpin, how the money will be withdraw. Firstly open
Indus mobile application. Then enter your Mpin, and click on cordless withdrawal
button. Note that before you proceed further, mention the amount or money as much
as you want to withdraw.After submission, the bank will send a temporary password
on your registered mobile number. Through the help of this password you have to
generate another password, into the application.

6.Select Cash on mobile

Now select cash on mobile option given on ATM machine screen. Then you are asked
to mention your mobile number, the amount, temporary password sent by the bank
and enter a password generated by yourself in required box.

By matching these four conditions, your entered amount will came out of the ATM
machine. This application will help you send money to a third party.

4.5 PARTS OF AN ATM MACHINE

Parts of the Machine

You're
probably
one of the
millions
who has
used an
ATM. As
you know,
an ATM has
two input
devices:

 Card
reader -
The card
reader captures the account information stored on the magnetic stripe on the back of an
ATM/debit or credit card. The host processor uses this information to route the transaction to the
cardholder's bank.
 Keypad - The keypad lets the cardholder tell the bank what kind of transaction is required (cash
withdrawal, balance inquiry, etc.) and for what amount. Also, the bank requires the cardholder's
personal identification number (PIN) for verification. Federal law requires that the PIN block be
sent to the host processor in encrypted form.

And an ATM has four output devices:

 Speaker - The speaker provides the cardholder with auditory feedback when a key is pressed.
 Display screen - The display screen prompts the cardholder through each step of the transaction
process. Leased-line machines commonly use a monochrome or color CRT (cathode ray tube)
display. Dial-up machines commonly use a monochrome or color LCD.
 Receipt printer - The receipt printer provides the cardholder with a paper receipt of the
transaction.
 Cash dispenser - The heart of an ATM is the safe and cash-dispensing mechanism. The entire
bottom portion of most small ATMs is a safe that contains the cash.

4.6 FUNCTIONS OF ATM MACHINES

 What Are the Functions of ATM
Machines ?
The automatic teller machine (ATM), used by banks and customers for a
variety of functions, was patented in 1939, but failed initially due to limited
functionality. Something more similar to the modern ATM emerged on the
streets of London in 1967, introducing a new era of banking convenience. The
functions of ATM machines include:

Withdrawals


Perhaps the most common function of the modern ATM, withdrawals are
usually allowed from a user's savings or checking account.


Deposits


Similarly, most (but not all) ATMs allow deposits to be made to both checking
and savings accounts. These deposit functions sometimes require cash or
checks in envelopes, although many ATMs allow you to deposit without the
use of envelopes.


Balance Inquiries


Another common function of the ATM is the ability to check account balance,
for savings or checking, and to print out that balance for future reference.


Account Transfers

 Account transfer is a popular function for those who carefully manage the
funds in more than one account, and can be used to move funds from one
account (for example, a checking account) to another (like a savings account).


Stamp Purchases


An increasingly popular function of modern ATMs is the ability to buy

stamps. Although this functionality is not available at all ATMs, its popularity
has been sufficient for its availability to expand.

CHAPTER 5
ATM VS DEBIT CARD AND CREDIT CARD

5.1 ATM VS DEBIT CARD AND CREDIT CARD : THE DIFFERENCE

The difference between all of those kinds of cards anyway? Let’s take a look:
• An ATM card is usually issued by your financial institution. The card allows you to
take money from your savings account or checking account from an ATM, depending
on which account it’s linked with. Generally speaking, you can use your ATM card to
withdraw money from any ATM machine. But be careful: Some of those withdrawals
will cost you. If an ATM machine is not part of your bank’s network, there’s a good
chance you’re going to have to pay a fee to access your money. Because The Milford
Bank is a member of the Allpoint ATM Network, our customers are able to withdraw
money from one of 55,000 machines across the world with no fees. You can find more
information about that here.
• A debit card—also known as a check card—is linked with your checking account
and generally has a Visa or MasterCard logo on it. As such, you can use these kinds of
cards anywhere credit cards are accepted. It’s important you realize that debit cards
are not credit cards, as the money that they draw from is the money that is on deposit
in your bank account. Because you’re using your own money to make purchases you
don’t have to pay interest on the things you buy with your debit card. But it’s
important that you remember to keep track of how much money you have in your
account because it is possible to spend more money than you have in your accounts,
causing you to overdraw your account. .
• A credit card allows you to purchase things with a lender—like American Express,
Visa or MasterCard—fronting you the money. The lender charges the merchant a per-
dollar percentage on each transaction. They will also charge you interest if you carry a
balance on your account. . Depending on your credit history, your credit limit may
vary. The better your history, generally speaking, the higher your limit.
Different kinds of cards are the preferred method of payment for different kinds of
people. There are some people who will only buy things with cash. When you pay
with cash, you know exactly how much of it you have in your wallet so you don’t risk
spending more than you have.
Other people turn to debit cards because they don’t like having cash on their person in
case they lose their wallet, for example. On top of that, you don’t have to worry about
carrying a high balance—though you might have to worry about overdrawing your
account if you’re not careful.
Because of the freedom and rewards that come with some credit cards, many people
feel comfortable buying with them. . It is important to try and pay your credit card
balance in full each month, however, if you wish to avoid hefty interest rates.
What is your favorite banking card to use and why? Keep the conversation going in
the comments section below!
5.2 FUTURE OF ATM IN INDIA
 Introduction
ATM channel provides opportunity for banks to go for competent and cost
effective models. There was a belief that internet banking channel will make
the ATM channel irrelevant. However, ATM Channel has dominated the public
technology segment, and future of ATM industry is also quite bright in India .The
technological innovations emerge in our society on a continuous basis. But the discusion of this
technological innovation by the members of the society determines its success and
continuation. In that sense, Automated Teller Machine (ATM) is not an exception. With the
advent of ATMs, banks are able to serve customers outside the banking halls. The most exciting
experience for the customers as well as the bankers, is that the plastic card is replacing all the
hassles of bank transactions, personal attendance of the customers, banking hour constraints,
and paper based validations. Now a customer can withdraw money, deposit money with and
without envelope, transfer fund from card to account, pay insurance bills, apply for loan, book
air and train tickets, movie tickets, and avail coupons. Even gold coins are possible to withdraw
from ATM counters.
Now there is a societal shift towards ATM, as a personalized delivery channel.
Multivendor software has brought a revolution in leading banks around the
globe. Here, banks do not depend on a single vendor to purchase software and
hardware equipments of ATM. As the technology supports to integrate multiple
parts of ATMs from different vendors, this arangement puts a competitive pressure
on ATM vendors. Multivendor software facilitates and independent decision
making for the banks in opting for hardware vendors, reduces the cost of ownership of
ATMs for the banks. Deployment of MVS (Multivendor Software) has also reduced
Infrastructure management issues in these banks. Definitely, it is a revolutionary
concept to execute a single software application in the entire ATM network. The
ATM technology has developed to such an extent that some ATMs can memorize
consumer preferences as per their past transactions, behavior, accordingly. In many cases, ATMs have
internet scope which facilitates two way communications with live agents, provide biometric options,
and have the ability to demonstrate personalized
advertisements. Maintenance of web enabled ATMs are easy. These ATMs can
be quickly connected to central monitoring
system of vendors.
Within two decades, ATM technology development is happening at an alarming
rate. Gone are the days when customers were limited to only withdrawing cash
from ATM’s. We have now reached an era, where we can use multi function and
biometric ATMs, equipped with touch sensitive and user friendly options to
transfer funds, book air and train tickets, go for mobile recharge, and even deposit
cheques with scanning .
 Growth of the Industry
As per the Global ATM Market and Forecasts to 2016, the maximum growth
of ATMs is happening in Asia pacific region. India and Indonesia are having one
fouth of the number of ATMs, and china is accounted for half of the New ATMs.
Worldwide growth of ATMs is steadily increasing The growth of ATMs
in Western countries and other advanced countries has reached at a mature stage.
However; there is a lot of scope of growth of ATM industry in developing countries
like India.
In India, ATM industry is growing at an exponential rate. So to say, ATM has
brought a self service revolution. ATMs were introduced to the Indian banking
industry during 1987 by HSBC Bank in Mumbai. Mr Jaivinder Gill, MD of NCR
India has stated, “As banks continue to open new branches, attract new
customers, and encourage existing and new account holders to use cards, the
Indian ATM industry is set to grow. Since many banks still operate proprietary
networks, the increasing number of banking customers is likely to spur ATM
growth.”ATM technology was used to reach the customers at a lower initial and
transaction cost with hassle free services.
As per an interaction with senior general managers (South Asia channel
partners and strategic alliance), ATM segment witnessed a growth rate of 30%
since last 5 years in India. ATM terminals
in India will be expected to grow at a compounded average growth rate of 25%.Between 2011 and
2015 .There is now a major focus on financial inclusion, which means ATMs now have a wider reach in
rural and remote corners of the country.
There is also a huge demand from the urban population who are looking for
instant services, alongside seeking to avail more value-based features.
. As per RBI, for ATM industry, India is a huge market. It is a place with 1.2 billion people,where 40% of
them were unbanked. ICICI Bank general manager OP Srivastava commented: "When we saw a man in
a dhoti in a remote town in South India withdraw money from an ATM, tuck it in the folds and ride
away on his cycle, we were truly inspired by the ATM growth in the country." As per the ATM Statistics
computed by Reserve Bank of India, total number of onsite and off site ATMs of all
Indian Banks are 100042 by July 2012.
 Conclusion and Future Directions
There is a huge opportunity for growth of ATM market in India. The future will see
multi vendor ATM popularity, which will provide personalized features and a user
friendly interface. ATM will be a popular “Public Technology”. Original equipment
manufacturers and vendors will get ample scope for handling ATM machines.
Modern ATMs are now capable of personalized branding, CRM applications,
integrated fraud alert, customer notifications, and flexible services. Though
ATM industry is growing rapidly, there are many challenges related to security issues
of the software, increase of rental costs by the day in major cities, housekeeping, and
replenishment of cash. Few banks have introduced biometric ATMs in rural India,
which are quite secure and easy to use by a common man. Banks are trying to shift
slowly from multi vendor to multi channel integration, so as to get a complete picture
of the activities of customers.
 CONCLUSION
You are on short on cash ,so you walk over to AUTOMATED TELLER MACHINE (ATM) ,insert your card into
card reader ,respond to the prompt on the screen ,and within a minute you walk away with your money
and receipt .These machines can now be found at most super -markets ,convenience stores ,and travel
centers.Have you ever wondered the process that makes your banks funds available to you at an ATM on
the side of other country!
In today’s E-BANKING world ,banks are playing very important role by providing maximum varieties of
services such as withdrawals ,balance inquiry ,fast cash , fund transfer and automated customer
complaints handling systems etc.through ATMS to the optional satisfaction of the customer.
The demand for ATMS in INDIA is increasing day by day as ATMS are playing a vital role in fast and
secured banking transactions for customers and banks as well.
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WEBILOGRAPHY

 WWW.ATMFORUM.COM
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 WWW.MONEYHOWSTUFFWORKS.COM
 WWW.MILIFORDBANK.COM
 WWW.RESEARCH.NET
 WWW.THETIMESOFINDIA.COM
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