INTRODUCTION

Viewed from a purely technical perspective, an ATM is simply a safe with an electromechanical input and output system which is itself controlled by a fully electronic user
interface.
Organization that manufacture ATMs include Fujitsu, IBM NCR and Siemens-Nixdorf
expended great effort on the user interface itself; taking into considerable care to maximize
the speed of the entire customer interaction and keeping the language the used for the
interaction process a clear and straightforward as feasible. Most ATMs nowadays use a
cathode-ray tube (CRT) for the visual interface, although some ATMs of an older design
make use of a system where by the different interface pages are scrolled mechanically behind
a glass screen. Incidentally, one reason why colors ATM screens have not taken off is because
no one has yet developed a reliable color screens which is easily visible in exterior daylight.
It is important that a ATMs user interface should not only be easy to use and clearly
understandable but should be designed so as to minimize the likelihood of the customer
leaving without taking from the machine all the things he needs to take. These are the cash,
paper receipt and above all, the card. There is no doubt that the card is the most likely items
to be forgotten by a customer, who sees the purpose of the interactive process being to obtain
cash. Consequently, ATMs usually have some kind of sound alarm, which only ceases when
the customer has removed his card from the slot. Some machines also provide visual message
to remind the customer to retrieve the card, especially if the functions is one where the
customer is not going to lingering by the machine until the cash has been dispensed.

In order to prevent security problem if the customer nevertheless forgets to retrieve

the card, the machine will swallow the card after a short period normally about 30 seconds.
The customer will then usually need to apply centrally to get the card returned, although if
ATM is situated in the lobby or through the wall of a branch where he is known, he can
sometimes get the card back from the ATM by asking for the branch to extract it.
The machines currently in use allow user to draw any sum of up to a limited account,
view the current position of their accounts and order a new cheque book. To obtain money
from the unit the customer need special ATM card and is notified of personal identification
number, which is not shown on the face of the card. The card must to be inserted into
machine and the personal number typed in. the machine will validate the code number and if
correct will allow access the banks computer to check the account balance and if there are
sufficient funds, to withdraw cash.
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.
According to the ATM Industry Association (ATMIA), there are now close to 3 million
cash machines installed worldwide.
On most modern cash machines, 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 a cash machine, customers can access their bank deposit or credit accounts in
order to make a variety of transactions such as cash withdrawals, check balances, or credit
mobile phones. If the currency being withdrawn from the cash machine is different from that
in which the bank account is denominated the money will be converted at an
official exchange rate. Thus, cash machines often provide the best possible exchange rates for
foreign travellers, and are widely used for this purpose.

HISTORY OF ATM
ATM can be traced back to the 1960s, when the first ATM machine was invented by
Scot John Shepherd-Barron and used by Barclays Bank in 1967. However, while ShepherdBarron has the major claim to fame, there have been many other individuals who have also
invented some version of the ATM. The machine itself has evolved over the years, with the
earlier versions restricted to only one or few banking functions. There has been much debate,
however, on who invented the first early versions of Automated Teller Machine. But the
history of ATM can be visibly traced back to the year of 1967.
In 1939, a rudimentary cash dispenser was invented by Luther George Simijian and
established by the City Bank of New York. However, the machine did not work much and had
to be removed within six months of putting up the machine. The early versions of the ATM
were restricted to cash withdrawal only. In the 1967 model, patented by Shepherd-Barron, the
plastic cards did not exist and instead a voucher with a strip of radioactive substance was
used for withdrawing cash. Consequently, the vouchers were matched with a particular
personal pin code used by the bank to identify the customer. The ATM was inaugurated by
renowned British actor, Reg Varney. The personal identification number was initially a six
numbered password, and was later changed to a four numbered password. However, this
automated teller machine was very different from the modern day teller machines, which is
based on an electronic system between the different branches of the bank. Thus, the history of
ATM has seen many changes over the span of 25 years since 1939.

Another co-patent to the invention of the ATM was Don Wetzel, the Vice President of
Product Planning at Docutel. While the conceptualization began in 1968, the patent was
issued only in 1973. This cash dispenser was first used by the New York based bank, namely,
the Chemical Bank. As was the case with the ATMs of during those years, they were hardly a
multi-functional unit. Moreover, they were not based on any electronic system. Hence, the
debit cards, distinct from credit cards, were given to only selected clients with good track
records. The first ATM cards, with magnetic strips were developed by three individuals,
namely Don Wetzel, Tom Barnes and George Chastain. While there were many developments
in the history of ATM, the service itself took a stronghold only in the 1970s. Today, the ATM
service has become indispensable to our modern day lives.

INVENTION OF ATM
Many people have claimed to be the inventor of the ATM. Some believe that Luther George
Simjian did it. Some believe that it was Don Wetzel. Still others say the inventor is John
Shepherd-Barron. John D. White has contacted ATMmachine.com and gave very convincing
evidence that he is the inventor of ATM and not Don Wetzel. James Goodfellow of Scotland
also contacted ATMmachine.com and gave us convincing evidence of inventing ATM. Since
the patent on an ATM as we know it was never applied until years after Simjian, confusion on
inventor till exists. One reason for confusion is that John Shepherd-Barron lived in the United
Kingdom, James Goodfellow in Scotland, while others lived in USA.

INTRODUCTION TO ATM CARD

An ATM card is any payment card issued by a financial institution that enables a
customer to access an automated teller machine (ATM) in order to perform transactions such
as deposits, cash withdrawals, obtaining account information, etc. ATM cards are known by a
variety of names such as bank card, MAC (money access card), client card, key card or cash
card, among others. Most payment cards, such as debit and credit cards can also function as
ATM cards, although ATM-only cards are also available. Charge and proprietary cards cannot
be used as ATM cards. The use of a credit card to withdraw cash at an ATM is treated
differently to a POS transaction, usually attracting interest charges from the date of the cash
withdrawal. Interbank networks allow the use of ATM cards at ATMs of private operators and
financial institutions other than those of the institution that issued the cards.
ATM cards can also be used on improvised ATMs such as "mini ATMs", merchants' card
terminals that deliver ATM features without any cash drawer. These terminals can also be
used as cashless scrip ATMs by cashing the receipts they issue at the merchant's point of sale.
The first ATM cards were issued in 1967 by Barclays in London.

ATM uses :
All ATM machines, at a minimum, will permit cash withdrawals of customers of the
machine's owner (if a bank-operated machine) and for cards that are affiliated with any ATM
network the machine is also affiliated. They will report the amount of the withdrawal and any
fees charged by the machine on the receipt. Most banks and credit unions will permit routine
account-related banking transactions at the bank's own ATM, including deposits, checking the
balance of an account, and transferring money between accounts. Some may provide
additional services, such as selling postage stamps.

Non-ATM uses :
Some ATM cards can also be used at a branch, as identification for in-person
transactions.
The ability to use an ATM card for in-store EFTPOS purchases or refunds is no longer
allowed, however, if the ATM card is also a debit card, it may be used for a pin-based debit
transaction, or a non-pin-based credit-card transaction if the merchant is affiliated with the
credit or debit card network of the card's issuer. Banks have long argued with merchants over
the fees that can be charged by the bank for such transactions. Despite the fact that ATM
cards require a PIN for use, banks have decided to permit the use of a non-PIN based card
(debit or credit) for all merchant transactions.
For other types of transactions through telephone or online banking, this may be
performed with an ATM card without in-person authentication. This includes account balance
inquiries, electronic bill payments, or in some cases, online purchases.

If you have a bank account there is a good chance that you have an ATM card, which
stands for Automated Teller Machine. This card gives you the ability to go to an ATM and
perform transactions. An ATM is a machine or computerized terminal that gives bank
customers the ability to access their funds without the need of a teller or bank employee.
Every customer has a four-digit pin code, as a matter of security that must be keyed in before
transactions can be performed. Customers have access to their funds 24 hours per day, seven
days per week.

TYPES OF ATM CARDS

More people use plastic to pay for items than cash. There are many different types of
cards used to make purchases or withdraw money and many people don't think about the
differences. There are significant differences between ATM, debit and credit cards. There are
several different types of cards that fall under the category of an ATM card.
Basic ATM Card :
Your basic ATM card only has a 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 few more uses like paying loans and getting cash advances, however ATM cards
cannot be used to make purchases.
Debit ATM Card :
An ATM debit card has all the features of a regular ATM card with the added features of a
debit card. This card can be used to make purchases at any store or online. Typically they will
have a credit card logo on them, although they do not work the same way as credit cards.
Every time and ATM debit card is used; money is taken out of the checking account it is
linked to.
ATM Credit Cards :
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 a credit card. This card is not only attached to a
checking account, but also to a line of credit. This means that if the person overdrafts on their
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 funds are made available.
8

WORKING OF ATM
There are mainly two types of ATMs which differ according to the way they operate. They
can be called as

Leased-line ATM

Dial-up ATM machines

Any ATM machine needs a data terminal with two inputs and four output devices. Of

course, for this to happen there should also be the availability of a host processor. The host
processor is necessary so that the ATM can connect and also communicate with the person
requesting the cash. The Internet Service Provider (ISP) also plays an important role in this
action. They act as the gateway to the intermediate networks and also the bank computer.
A leased-line ATM machine has a 4-wire, point to point dedicated telephone line
which helps in connecting it with the host processor. These types of machines are preferred in
places where the user volume is high. They are considered high end and the operating costs of
this type of a machine is very high.
The dial-up ATM machines only has a normal phone line with a modem and a toll free
number. As these are normal connections their initial installation cost is very less and their
operating costs only become a fraction of that of a leased-line ATM.
The host is mainly owned by the bank. It can also be owned by an ISP. If the host is
owned by the bank only machines that work for that particular bank will be supported.

PARTS OF ATM
There are mainly two input devices and four output devices for an ATM. The input
devices are:

Card Reader This is a part of the identification of your particular account number.
For this the magnetic stripe on the back of the ATM card is either swiped or pressed
on the card reader so that it captures your account information. To understand the
account information of the user, the data from the card is passed on to the host
processor. The host processor thus uses this data to get the information from the card
holders bank.

Keypad After the card is recognized, the machine asks further details like the type of
withdrawal you prefer, your balance enquiry, and your personal identification number
(PIN) and so on. Since each card has a unique PIN number, there is very little chance
for someone else to withdraw money from your account. There are also separate laws
to protect the PIN code while sending it to the host processor. So, the PIN number is
mostly sent in encrypted form.

If your pin number is correct the ATM makes the necessary transactions for the required
amount.
10

For this transaction, there are mainly four outputs. They are:

Speaker When a particular key is pressed, the speaker provides the feedback as

audio.
Display Screen The questions asked by the ATM machine regarding the transaction
and the input from the user is all displayed on the display screen. Each step of
withdrawal is shown by the display screen. A CRT screen or even an LCD screen is

commonly used as an LCD screen.

Receipt printer All the details regarding your withdrawal like the date and time and
the amount withdrawn and also the balance amount in the bank is also shown in the

receipt. Thus a paper receipt of the current transaction is obtained by the user.
Cash dispenser This is the central system of the ATM machine. This is from where
the required money is obtained. From this portion the person can collect the money.

Functions of the Cash Dispenser:

As the whole mechanism is regarding the withdrawal of cash, the cash dispenser
should be highly efficient. These are the main functions that are to be carried out by
the cash dispenser.
It is the duty of the cash dispenser to count each bill and give the required amount. If
there are cases where the bills are stuck together they should be rejected and instead
new notes should be taken. If the money is worn, or even folded, they will be moved
to another section called the reject bin. All these actions are carried out by highprecision sensors.
There may be cases where the sensors may go wrong. To know this, the person
responsible for the machine checks the number of rejected notes at a certain interval.
If the numbers of notes are a lot than expected, then it would indicate that either the
quality of the bills is not good or there is a problem with the cash dispenser.
A complete record of each transaction made by a particular ATM machine is recorded
each day and is kept as a journal. This journal is later collected and then printed out at
times. This information regarding the transaction is kept by the authorities for a period
of 2 years. As there may be cases regarding a particular transaction going wrong, the
account owner or also the bank officers have a right to see the transaction. With this
printout the account holder can contact the host processor.

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ATM NETWORKING
When a transaction is made, the details are inputted by the card holder. This
information is passed on to the host processor by the ATM machine. The host processor
checks these details with the authorized bank. If the details are correct, the requested cash by
the card holder is taken with the help of an electronic fund from the customers bank account
to the host processors account. After this function is carried out, the processor sends an
approval code to the ATM machine so that the cash can be transferred.
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).
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 utilizes 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 modem over 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.

12

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.

HOW TO USE AN ATM

ATMs, standing for "Automatic Teller Machines", are an easy, convenient way to
access your account from almost anywhere. If you're new to them, don't worry. It's easy. The
instructions are right there, on the machine.

Steps involved in Depositing Money:

1. Be alert.
As you approach the ATM, look around for other people. If it is night time, pick an ATM
in a well-lit location. If using a drive-up ATM, pull up close to it so no one can see you
enter your PIN (Personal Identification Number). If you are uncomfortable with the area
or the people around the machine, find a different machine or use the machine some other
time
2. Fill out a deposit slip, if needed.
Take an envelope and prepare any deposits you will make
ahead of time.
Fill out a deposit slip, if your bank requires one, and
include it in the envelope. Write the amounts of money you
are depositing in the space provided.
Write the total of all your cash on the first line.
13

3. Endorse your check.

To deposit a check, sign the back of the check ( called "endorsing" the check) with your
name as it is written on the front. Depending on the rules of your bank, you may also
write "for deposit only" and include your account number, as shown.
Write the amount of each check on a line of the deposit slip. Beside it, write the
"fraction". This number appears on the face of the check, often in the upper right corner
near the check number. It tells your bank where the check came from. Add up the
amounts you are depositing and write the number down where you can see it after you
seal the envelope. Then, seal the envelope.
4. Insert your ATM Card into the machine.
5. Select a language.
Note that this option often only comes up where your card is registered as being from
another country, unless you live in a country or region with languages other than English
are in major use.
6. Enter your PIN (Personal Identification Number), then press Enter.
7. Select a transaction.
8. Deposit money.
If you want to deposit (put in) money:
Enter the amount you will deposit. Confirm the amount.
Insert the envelope into the deposit slot when the machine opens it. Note that some ATMs
will not allow you to deposit money. In this case, you need to find one at a branch.

14

Steps involved in Withdrawing Money:

1. Insert your ATM Card into the machine
2. Select a language.
3. Enter your PIN (Personal Identification Number), then press Enter.
4. Withdraw money.
If you want to withdraw (take out) money, select or enter the amount to withdraw.
Most machines dispense money in fixed amounts. You may be given a choice between
common amounts or you may be asked to enter a number that is a multiple of 20 (20, 40,
60, 80, etc.).
Take the cash when the door opens. Put it directly into your wallet.
5. Choose whether to do an additional transaction. Select Yes or No.
6. Choose whether you want a receipt, select Yes or No. Take the receipt, if you
requested it.
7. Wait while the system processes your transaction(s).
When the machine beeps at you, take your card, cash, and receipt (if applicable). Always
make sure that you have both your cash and your card.
8. Use the receipt to record the transaction in your check register or passbook.

15

USES OF ATM

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.

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 traveling. 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.
Currency notes received as cash deposits are counted; soiled notes separated and deposited
cash dispensed to fulfill withdrawal transactions. However, regulatory concerns relating to
identification of counterfeit notes 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. Another reason
is the introduction of cheque deposit Kiosks by various Banks especially Private sector ones.
These are kept at each some important locations/branches where customers can deposit there
cheques which are collected at intervals which may be difficult in ATMs.

16

 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. This
service has the effect of improving customer satisfaction for both the bank as well as the billpayment service providers. Some Banks ATMs even accept charitable contributions to
Temples.

Sale of Paper sled 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. A number of banks including ICICI Bank, SBI and PNB have
ATMs at Mumbais local railway stations to dispense season tickets to commuters. Own-bank
customers pay no extra charge while other bank customers pay a fee of Rs. 50 for this
extremely useful service of anytime ticket purchase. Railway season tickets represent a highvolume mass-appeal product. As technical standards get established and product/service
sellers become aware of the ATM sales channel, niche-appeal high-margin products like
entertainment tickets will join the fray.

Kiosks:

Information Kiosks has been introduced by many Banks and also

by PSUs like Railways,

Tourist centers 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.
Union Bank has used technology to establish Village Knowledge Centers (VKCs), which
have proved to be a success in the 198 centers, where they have been set up. VKCs empower
the local rural population by giving them information on various vital inputs such as weather,
17

fertilizers, prices of crops, etc. The bank is also operating financial education centers offering
counseling at 51 of these VKCs.

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.

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. In line with international trends, ATMs can be made
capable to dispense printed money orders or initiate wire transfers against a charge on
customers bank accounts. After addressing regulatory hurdles, these services can even be
made available to non-account holders through cash payments using the currency acceptors
built into ATMs. 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.

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 banks ATMs or by sending a
SMS. The amount for recharging the mobile phone would be debited from the subscribers
Bank account and the subscription would be directly recharged accordingly. The mobile topup facility provides convenience on ATMs and through mobile phones using SMS.

18

FRAUD PREVENTION (FOR CONSUMERS)

Most ATM frauds happen due to the negligence of customers in using, and more importantly,
negligence of banks in educating their customers about the matters that should be taken care
of while at an ATM.
The number of ATM frauds in India is more in regard to negligence of the Personal
Identification Number (PIN), than by sophisticated crimes like skimming. Banks need to
develop a fraud policy the policy should be written and distributed to all employees,
borrowers
and
depositors.
The most important aspect for reducing ATM related fraud is to educate the customer.
Here is a compiled list of guidelines to help your customer from being an ATM fraud victim:

Look for suspicious attachments:

Criminals often capture information through ATM skimming using devices that steal
magnetic strip information. At a glance, the skimmer looks just like a regular ATM slot, but
its an attachment that captures ATM card numbers. To spot one, the attachment slightly
protrudes from the machine and may not be parallel with the inherent grooves. Sometimes,
the equipment will even cut off the printed labels on the ATM. The skimmer will not obtain
PIN numbers, however. To get that, fraudsters place hidden cameras facing the ATM screen.
Theres also the helpful bystander (the criminal) who may be standing by to kindly inform
19

you the machine has had problems and offer to help. If you do not feel safe at any time, press
the ATM cancel button, remove your card and leave the area immediately.

Minimize your time at the ATM:

The more time you spend at the ATM, the more vulnerable you are. If you need to
update your records after a transaction, one is advised do it at home or office, but not while at
the ATM. Even when depositing a cheque at the ATM, on should not make/sign the cheque at
the ATM. After the transaction, if you think you are being followed, go to an area with a lot of
people and call the police.

Make smart deposits:

Some ATMs allow you to directly deposit checks and cash into your accounts without
stuffing envelopes. As for the envelope-based deposits, make sure they go through if it gets
jammed and it doesnt fully go into the machine, the next person can walk up and take it out.
After having made the ATM deposit, compare your records with the account statements or
online banking records.

Avoid using ATMs at night:

While robberies are less prevalent than fraud at ATMs, theres still risk, especially at
night. And if you have to use an ATM late at night, use one at a bank itself. Financial
institutions have to follow certain guidelines and regulations as far as lighting is concerned.
They also have cameras on all the ATMs.

Be aware of your surroundings:

Before you slide your card into the machine, look around if the area appears safe or if
there is anybody who can see the PIN pad. Having the card ready before entering is ATM
premises is better than searching for it though the purse at the machine. While you are
fumbling with a wallet or purse, you are easy prey for a thief. A good rule of thumb is to
always shield your card, no matter how comfortable you are with the place. If your card is
stuck inside an ATM, be suspicious of anyone offering help. Immediately report the incident
to the bank.

20

 Keep your receipts and card before leaving the place:

Before you leave the machine, make sure you have your card. Also, do not leave your
receipt behind at the ATM. Keep copies of your receipts and compare them with your
monthly statement. As much as 83 percent of all ATM and debit fraud results from stolen
cards and discarded receipts bearing card/account numbers.

Memorize your PIN:

Many cardholders walk up to an ATM and pull out a piece of paper containing four
numbers. If you are not sure, make it a point that you dont keep the PIN and ATM card
together in your wallet If someone comes up and hits you over the head, theyre going to
have all your information right there. But ideally, one should never write down the PIN
number it should be memorized.

Never disclose your PIN to anyone:

Even bank officials do not require an ATM PIN neither to process an issue involving
ATMs, nor to remove a card stuck in the machine. Always change the PIN as soon as you
receive it. Preferably, change it every quarter. This habit will also help remind you of
changing the PIN if you find a suspicious activity.

Never provide information via e-mail:

About 3.5 percent of ATM and point-of-sale debit fraud originates from phasing emails. Phi hers attempt to obtain information about your bank account by asking for your
PIN, account number and personal information. Much like ATM skimming equipment, these
e-mails appear legitimate. If you click on a link, you will be sent to a Web site that looks
exactly like the one the phi hers are imitating. Reputable companies do not ask for
information through e-mail. If you receive one of these e-mails, inform the organization. And
if you believe your accounts have been compromised, inform your financial institution and
cancel the account.

21

ADVANTAGES AND DISADVANTAGES

ATM Advantages :

Ability to draw cash outside normal banking hours.

Cheaper where bank charges are incurred and often quicker than using normal cashier

services.
Does not just operate as a medium for obtaining cash.
Amount up to a set limit per day is available.
All customers can apply for the joint accounts two separate cards can be issued.
Although ATMs are primarily located on bank premises, some are available

elsewhere.
Where an incorrect PIN is used several times in succession (say where a thief has

stolen the card), the ATM will retain the card.

ATM service is available for 24 hours a day,7 days in a week.
It helps to check the balance in an account.
It is easy, saves time of customers.

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ATM disadvantages :

If person who does not have sufficient money in its account, then in this case the

ATM may not recognize his card.

May be ATMs may not be situated near by when it is urgently required.
If some one watches or hacks ATM machine then details of customers can be misused.
Banks have maintained a limit of Rs. 10,000/- per transaction. This information is
displayed on the ATM. The maximum limit is Rs. 25000/- per day. No one can
withdraw money beyond this limit.

SCOPE OF ATM IN INDIA

Automated Teller Machines (ATMs) have gained prominence as a delivery channel
for banking transactions in India. Banks have been deploying ATMs to increase their reach.
As at the end of December 2007, the number of ATMs deployed in India was 32,342.
From first day of April 2009, entire ATM network is now available to customers from
any bank for transactions for no fee at all, irrespective of the banks in which they have their
accounts, Now Customers will not be levied any fee on cash withdrawals using ATM and
debit cards issued by other banks. This will in turn increase usage of ATMs in India
More people are now moving towards using the automated teller machines (ATM) for
their banking needs. According to a survey by Bank net India, 95% people now prefer this
modern channel to traditional mode of banking. Almost 60% people use an ATM at least once
a week
Increased ATM usage is also helped by the fact that customers have now the flexibility
of using ATMs of other banks, as most of the banks are part of major interbank networks like
National Financial Switch (NFS), Mitr, BANCS, Cash tree and Cash net. The interbank
networks have brought together ATMs of several banks so that consumers would gain access
to any of the participating banks ATMs. Banks find it cheaper to pay membership fees to
these networks as against setting up additional units in expensive-to-deploy areas.
ATMs are now seen to be more than mere cash dispensing machines. Customers use
ATMs to recharge their mobile phone pre-paid connections, pay their utility bills, even
mutual fund transactions making them at par with flexibility given in internet banking
only more secure. Of the value-added services provided at ATMs, bill-payment is the most
used service, followed by prepaid mobile talk-time recharges. However, still about one third
of the respondents do not use any value added services at ATMs.
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The ATM market in India is not yet saturated. Though the concentration of ATMs is
greater in metros, the demand is increasing for other cities and even rural areas. ATM's per
million people approximately is 33 units is very low. Experts forecast that the growth rate is
expected to grow 18 percent up by 2013. Banks going into a self service model can have huge
saving potential for banks and may also increase the convenience for the customers.
Many ATM vendors have devised specialized machines, embedded with biometric
devices for authentication. Catering to the rural population, these machines have enabled
them to interact with the machine in their local language and on a graphical user interface.
The rural customer has seemed to accept this new medium. This has the potential to further
widen the scope of ATM usage in the interior parts of the country. There is also interest
towards white-label ATMs. Many companies are interested in this model, where the
ownership of the ATM will not be with the banks but with third parties who deploy them and
make money on fees charged on every transaction. The concept is prevalent in the American
continent Wide acceptance of ATMs by consumers, introduction of biometric ATMs, and
increasing scope of value-added ATM services will maintain growth in the industry.
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 once 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."
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. The ATM technology has developed to
such an extent that some ATMs can memorize consumer preferences as per their past
transactions, behavior, and tailor services 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. Though ATM industry is growing rapidly, there are
many challenges related to security issues of the software, increase of rental costs by
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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 multichannel
integration, so as to get a complete picture of the activities of customers.

CONCLUSION
In this era of growing competition among the banks, ATMs have played a vital role in
helping the bank to sustain in the market. The ATMs have gained worldwide popularity
within a few years. ATM machines are easy to operate and hence, attract more and more
customers. There are quite of innovations, which are being taken place in the ATM machine.
The locations of ATMs are the key location of any particular area. ATMs is a form of easy
banking. The aim of banks of setting of ATMs is to cater to the needs of the customers. The
flexibility of the ATMs has increased so much that now-a-days, have been reached the
doorsteps of the customers. The customers using the ATM machine are satisfied with the
service and have very less complaints about the machines.
Thus the ATMs i.e. any time money machine has fulfilled the customers needs to its
greatest extent. In the near future the banks have also promised to come up with new
innovations in the ATMs.

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