AUTOMATED TELLER MACHINE

Smaller indoor ATMs dispense money inside convenience stores and other busy areas, such as
this off-premise Wincor Nixdorf mono-function ATM in Sweden.
An automated teller machine (ATM), also known as automatic banking machine (ABM), Cash
Machine, or Cashpoint, is a computerised telecommunications device that provides the clients of
a financial institution with access to financial transactions in a public space without the need for
a cashier, human clerk or bank teller. On most modern ATMs, the customer is identified by
inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip, that
contains a unique card number and some security information such as an expiration date or
CVVC (CVV). Authentication is provided by the customer entering a personal identification
number (PIN).
Using an ATM, customers can access their bank accounts in order to make cash withdrawals,
credit card cash advances, and check their account balances as well as purchase prepaid
cellphone credit. If the currency being withdrawn from the ATM is different from that which the
bank account is denominated in (e.g.: Withdrawing Japanese Yen from a bank account
containing US Dollars), the money will be converted at a wholesale exchange rate. Thus, ATMs
often provide the best possible exchange rate for foreign travelers
[1]
and are heavily used for this
purpose as well.
ATMs are known by various other names including Automated Transaction Machine,
[2]

automated banking machine, cashpoint (in Britain), money machine, bank machine, cash
machine, hole-in-the-wall, Bancomat (in various countries in Europe and Russia), Multibanco
(after a registered trade mark, in Portugal), and All Time Money in India.
History

The idea of self-service in retail banking developed through independent and simultaneous
efforts in Japan, Sweden, the United States and the United Kingdom. In the USA, Luther George
Simjian has been rightly credited with developing and building the first cash dispenser
machine.
[3]
There is strong evidence to suggest that Simjian worked in this device before 1959
while his 132nd patent (US3079603) was first filed on 30 June 1960 (and granted 26 February
1963). The rollout of this machine, called Bankograph, was delayed a couple of years. This was
due in part to Simjian's Reflectone Electronics Inc. being acquired by Universal Match
Corporation.
[4]
An experimental Bankograph was installed in New York City in 1961 by the City
Bank of New York, but removed after 6 months due to the lack of customer acceptance. The
Bankograph was an automated envelope deposit machine (accepting coins, cash and cheques)
and it did not have cash dispensing features.
[5]
The Bankograph, however, embodied the
preoccupation by US banks in finding alternative means to capture core deposits, while the
concern of European and Asian banks was cash distribution.
A first cash dispensing device was used in Tokyo in 1966.
[6][7]
Although little is known of this
first device, it seems to have been activated with a credit card rather than accessing current
account balances. This technology had no immediate consequence in the international market.
In simultaneous and independent efforts, engineers in Sweden and Britain developed their own
cash machines during the early 1960s. The first of these that was put into use was by Barclays
Bank in Enfield Town in North London, United Kingdom,
[8]
on 27 June 1967. This machine was
the first in the UK and was used by English comedy actor Reg Varney, at the time so as to ensure
maximum publicity for the machines that were to become mainstream in the UK. This instance
of the invention has been credited to John Shepherd-Barron,
[9]
while disregarding other engineers
at De La Rue Instruments who contributed to the design and development of that machine.
Nevertheless, Shepherd-Barron was awarded an OBE in the 2005 New Year's Honours List.
[10]

His design used special checks that were matched with a personal identification number, as
plastic bank cards had not yet been invented.
[11]

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 (a device called Bankomat) by nine days
and Westminster Banks-Smith Industries-Chubb system (called Chubb MD2) by a month. The
collaboration of a small start-up called Speytec and Midland Bank developed a third machine
which was marketed after 1969 in Europe and the USA 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.
Both the DACS and MD2 accepted only a single-use token or voucher which was retained by the
machine while the Speytec worked with a card with a magnetic stripe at the back. Hence all this
these worked on various principles including Carbon-14 and low-coercivity magnetism in order
to make fraud more difficult. The idea of a PIN stored on the card was developed by a British
engineer working in the MD2 named James Goodfellow in 1965 (patent GB1197183 filed on 2
May 2, 1966 with Anthony Davies). The essence of this system was that is it enabled the
verification of the customer with the debited account without human intervention. This patent is
also the earliest instance of a complete currency dispenser system in the patent record. This
patent was filled on 5 March 1968 in the USA (US 3543904) and granted on 1 December 1970.
It had a profound influence on the industry as a whole. Not only did future entrants into the cash
dispenser market as both NCR Corporation and IBM licence Goodfellows PIN system, but a
number of later patents references this patent as Prior Art Device
[12]
.
After looking first hand at the experiences in Europe, in 1968 the networked ATM was pioneered
in Dallas, Texas, by Donald Wetzel who was a department head at an automated baggage-
handling company called Docutel. In 1995, the Smithsonian's National Museum of American
History recognised Docutel and Wetzel as the inventors of the networked ATM.
[13]

ATMs first came into use in December 1972 in the UK; the IBM 2984 was designed at the
request of Lloyds Bank. The 2984 CIT (Cash Issuing Terminal) was the first true Cashpoint,
similar in function to today's machines; 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. A small number of 2984s were supplied to a US bank. Notable historical models of
ATMs include the IBM 3624 and 473x series, Diebold 10xx and TABS 9000 series, and NCR
50xx series.

Location


An ATM Encrypting PIN Pad (EPP) with German markings
ATMs 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 any place
large numbers of people may gather. These represent two types of ATM installations: on and off
premise. On premise ATMs are typically more advanced, multi-function machines that
complement an actual bank branch's capabilities and thus more expensive. Off premise machines
are deployed by financial institutions and also ISOs (or Independent Sales Organizations) where
there is usually just a straight need for cash, so they typically are the cheaper mono-function
devices. In Canada, when an ATM is not operated by a financial institution it is known as a
"White Label ATM".
In North America, banks often have drive-thru lanes providing access to ATMs.
Many ATMs have a sign above them indicating the name of the bank or organization owning the
ATM, and possibly including the list of ATM networks to which that machine is connected. This
type of sign is called a topper.
Financial networks
Most ATMs are connected to interbank networks, enabling people to withdraw and deposit
money from machines not belonging to the bank where they have their account or in the country
where their accounts are held (enabling cash withdrawals in local currency). Some examples of
interbank networks include PULSE, PLUS, Cirrus, Interac, Interswitch, STAR, and LINK.
ATMs rely on authorization of a financial transaction by the card issuer or other authorizing
institution via the communications network. This is often performed through an ISO 8583
messaging system.
Many banks charge ATM usage fees. In some cases, these fees are charged solely to users who
are not customers of the bank where the ATM is installed; in other cases, they apply to all users.
Where machines make a charge some people will not use them, but go to a system without fees.
In order to allow a more diverse range of devices to attach to their networks, some interbank
networks have passed rules expanding the definition of an ATM to be a terminal that either has
the vault within its footprint or utilizes the vault or cash drawer within the merchant
establishment, which allows for the use of a scrip cash dispenser.

ATMs typically connect directly to their host or ATM Controller via either ADSL or dial-up
modem over a telephone line or directly via a leased line. Leased lines are preferable to POTS
lines because they require less time to establish a connection. Leased lines may be comparatively
expensive to operate versus a POTS line, meaning less-trafficked machines will usually rely on a
dial-up modem. That dilemma may be solved as high-speed Internet VPN connections become
more ubiquitous. Common lower-level layer communication protocols used by ATMs 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 ATM and the Transaction Processor may also be encrypted via methods such as
SSL.
[14]

Global use
There are no hard international or government-compiled numbers totaling the complete number
of ATMs in use worldwide. Estimates developed by ATMIA place the number of ATMs in use
currently at over 1.8 million.
[15]

For the purpose of analyzing ATM 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 ATMs per million
people.
[16]
and generally slowing growth rates.
[17]
Despite the large number of ATMs,there is
additional demand for machines in the Asia/Pacific area as well as in Latin America.
[18][19]
ATMs
have yet to reach high numbers in the Near East/Africa.
[20]

The world's most northerly installed ATM is located at Longyearbyen, Svalbard, Norway.
[21]

The world's most southerly installed ATM is located at McMurdo Station, Antarctica.
[22]

While India claims to have the world's highest installed ATM at Nathu La Pass, India installed
by the Union Bank of India at 4310 meters, there are higher ATMs installed in Nagchu County,
Tibet at 4500 meters by Agricultural Bank of China.
[23][24]
.
Israel claims to have the world's lowest installed ATM at Ein Bokek at the Dead Sea, installed
independently by a grocery store at 421 meters below (Mediterranean) Sea level.
[25]
.
While ATMs are ubiquitous on modern cruise ships, ATMs can also be found on some US Navy
ships.
[26]

In the United Kingdom, an ATM may be colloquially referred to as a "Cashpoint"
[27]
, named
after the Lloyds Bank ATM brand, or "hole-in-the-wall", after which the equivalent Barclays
brand was later named. In Scotland the term Cashline has become a generic term for an ATM,
based on the branding from the Royal Bank of Scotland.
In the Republic of Ireland, ATMs are also commonly referred to as a "Banklink", named after the
Allied Irish Bank brand of machines.
In Israel, ATMs are commonly referred to as "Kaspomat" (Hebrew: ), which is a
compound word meaning "automatic money" in Hebrew, named after the Bank Leumi & Israel
Discount Bank brand of machines.
Hardware


A block diagram of an ATM
An ATM is typically made up of the following devices:
CPU (to control the user interface and transaction devices)
Magnetic and/or Chip card reader (to identify the customer)
PIN Pad (similar in layout to a Touch tone or Calculator keypad), often manufactured as
part of a secure enclosure.
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 their transaction)
Vault (to store the parts of the machinery requiring restricted access)
Housing (for aesthetics and to attach signage to)
Recently, due to heavier computing demands and the falling price of computer-like architectures,
ATMs have moved away from custom hardware architectures using microcontrollers and/or
application-specific integrated circuits to adopting the hardware architecture of a personal
computer, such as, USB connections for peripherals, ethernet and IP communications, and use
personal computer operating systems. Although it is undoubtedly cheaper to use commercial off-
the-shelf hardware, it does make ATMs potentially vulnerable to the same sort of problems
exhibited by conventional computers.
Business owners often lease ATM terminals from ATM service providers.
The vault of an ATM 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
proprietary standards) or a solid-state device (an actual printer) which accrues all records
of activity including access timestamps, number of bills dispensed, etc. - This is
considered sensitive data and is secured in similar fashion to the cash as it is a similar
liability.
ATM vaults are supplied by manufacturers in several grades. Factors influencing vault grade
selection include cost, weight, regulatory requirements, ATM type, operator risk avoidance
practices, and internal volume requirements.
[28]
Industry standard vault configurations include
Underwriters Laboratories UL-291 "Business Hours" and Level 1 Safes,
[29]
RAL TL-30
derivatives,
[30]
and CEN EN 1143-1:2005 - CEN III/VdS and CEN IV/LGAI/VdS.
[31][32]

ATM manufacturers recommend that vaults be attached to the floor to prevent theft.
[33]

Software


A Suncorp Metway ATM running OS/2
With the migration to commodity PC hardware, standard commercial "off-the-shelf" operating
systems and programming environments can be used inside of ATMs. Typical platforms
previously used in ATM development include RMX or OS/2. Today the vast majority of ATMs
worldwide use a Microsoft OS, primarily Windows XP Professional or Windows XP Embedded.
A small number of deployments may still be running older versions such as Windows NT,
Windows CE or Windows 2000. Notably, Vista was not widely adopted in ATMs.
[citation needed]

Linux is also finding some reception in the ATM 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
ATMs with Linux. Banco do Brasil is also migrating ATMs to 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 ATM manufacturers provide software packages that
implement these protocols. Newer protocols such as IFX have yet to find wide acceptance by
transaction processors.
[34]

With the move to a more standardized 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 an ATM. J/XFS is a Java implementation of
the CEN XFS API.
[35]

While the perceived benefit of XFS is similar to the Java's "Write once, run anywhere" mantra,
often different ATM hardware vendors have different interpretations of the XFS standard. The
result of these differences in interpretation means that ATM applications typically use a
middleware to even out the differences between various platforms.
With the onset of Windows operating systems and XFS on ATM's, the software applications
have the ability to become more intelligent. This has created a new breed of ATM applications
commonly referred to as programmable applications. These types of applications allows for an
entirely new host of applications in which the ATM terminal can do more than only
communicate with the ATM switch. It is now empowered to connected to other content servers
and video banking systems.
Notable ATM software that operates on XFS platforms include Triton PRISM, Diebold Agilis
EmPower, NCR APTRA Edge, CR2 BankWorld, KAL Kalignite, Phoenix Interactive
VISTAatm, and Wincor Nixdorf ProTopas.
With the move of ATMs to industry-standard computing environments, concern has risen about
the integrity of the ATM's software stack.
[36]

Security

Security, as it relates to ATMs, has several dimensions. ATMs also provide a practical
demonstration of a number of security systems and concepts operating together and how various
security concerns are dealt with.
Physical
Early ATM security focused on making the ATMs invulnerable to physical attack; they were
effectively safes with dispenser mechanisms. A number of attacks on ATMs resulted, with
thieves attempting to steal entire ATMs by ram-raiding.
[37]
Since late 1990s, criminal groups
operating in Japan improved ram-raiding by stealing and using a truck loaded with a heavy
construction machinery to effectively demolish or uproot an entire ATM and any housing to steal
its cash.
[38]

Another attack method, plofkraak, is to seal all openings of the ATM with silicone and fill the
vault with a combustible gas or to place an explosive inside, attached, or near the ATM.
[39]
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. A plofkraak can be prevented with a gas protection
unit.
Transactional secrecy and integrity
The security of ATM transactions relies mostly on the integrity of the secure cryptoprocessor:
the ATM often uses commodity components that are not considered to be "trusted systems".
Encryption of personal information, required by law in many jurisdictions, is used to prevent
fraud. Sensitive data in ATM transactions are usually encrypted with DES, but transaction
processors now usually require the use of Triple DES.
[40]
Remote Key Loading techniques may
be used to ensure the secrecy of the initialization of the encryption keys in the ATM. Message
Authentication Code (MAC) or Partial MAC may also be used to ensure messages have not been
tampered with while in transit between the ATM and the financial network.
Device operation integrity


ATMs that are exposed to the outside must be vandal and weather resistant.
Openings on the customer-side of ATMs are often covered by mechanical shutters to prevent
tampering with the mechanisms when they are not in use. Alarm sensors are placed inside the
ATM and in ATM servicing areas to alert their operators when doors have been opened by
unauthorized personnel.
Rules are usually set by the government or ATM operating body that dictate what happens when
integrity systems fail. Depending on the jurisdiction, a bank may or may not be liable when an
attempt is made to dispense a customer's money from an ATM and the money either gets outside
of the ATM's vault, or was exposed in a non-secure fashion, or they are unable to determine the
state of the money after a failed transaction.
[45]
Bank customers often complain that banks have
made it difficult to recover money lost in this way, but this is often complicated by the bank's
own internal policies regarding suspicious activities typical of the criminal element.
[46]

Alternative uses


Although ATMs were originally developed as just cash dispensers, they have evolved to include
many other bank-related functions. In some countries, especially those which benefit from a fully
integrated cross-bank ATM network (e.g.: Multibanco in Portugal), ATMs include many
functions which are not directly related to the management of one's own bank account, such as:
Deposit currency recognition, acceptance, and recycling
[57][58]

Paying routine bills, fees, and taxes (utilities, phone bills, social security, legal fees,
taxes, etc.)
Printing bank statements
Updating passbooks
Loading monetary value into stored value cards
Purchasing
o Postage stamps.
o Lottery tickets
o Train tickets
o Concert tickets
o Movie tickets
o Shopping mall gift certificates.
Games and promotional features
[59]

Donating to charities
[60]

Cheque Processing Module
Adding pre-paid cell phone / mobile phone credit.
Paying (in full or partially) the credit balance on a card linked to a specific current
account.