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AUTOMATIC TELLER MACHINE

1 .1 INTRODUCTION :-

An automatic teller machine (ATM) is a machine permitting a bank's

customers to make cash withdrawals and check their account balances at any time and without
the need for a human teller. Many ATMs also allow people to deposit cash or cheques, transfer
money between their bank accounts or even buy postage stamps.

Automatic Teller Machine Kiosk

1.2 NAMES :-

ATMs are known by a wide variety of names, some of which being more common in
certain countries than others. Some examples are:
Automated Teller Machine
Automated Banking Machine
ATM Machine sic
Hole-in-the-wall
Cash Dispenser
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Cash Machine
Robotic Teller
Cashpoint (in the United Kingdom particularly)
Bancomat or Bankomat (particularly in continental Europe)
Geldautomat Germany (Geld = money)
Bank machine (in Canada)
MAC machine, or MAC, (for Money Access Center)
(particularly on the East coast in the United States, esp. New Jersey and Pennsylvania)

1.3 HISTORY:-

ATM, Don Wetzel invented the first successful and modern ATM in the As is
often the case with inventions, many inventors contribute to the history of an invention. In
the case of the USA, however he was not first inventor to create an ATM. In 1939, Luther
George Simjian started patenting an earlier and not-so-successful version of an ATM.

1.3.1Don Wetzel

An automatic teller machine or ATM allows a bank customer to conduct their

banking transactions from almost every other ATM machine in the world. Don Wetzel was
the co-patentee and chief conceptualist of the automated teller machine, an idea he said he
thought of while waiting in line at a Dallas bank. At the time (1968) Wetzel was the Vice
President of Product Planning at Docutel, the company that developed automated baggage-
handling equipment. The other two inventors listed on the patent were Tom Barnes, the
chief mechanical engineer and George Chastain, the electrical engineer. It took five million
dollars to develop the ATM. The concept of the modern ATM first began in 1968, a working
prototype came about in 1969 and Docutel was issued a patent in 1973. The first working
ATM was installed in a New York based Chemical Bank. (editor's note: There are different
claims to which bank had the first ATM, I have used Don Wetzel's reference.)

"No, it wasn't in a lobby, it was actually in the wall of the bank, out on the street. They put a
canopy over it to protect it from the rain and the weather of all sorts. Unfortunately they put
the canopy too high and the rain came under it. (laughing) One time we had water in the
machine and we had to do some extensive repairs. It was a walkup on the outside of the
bank. That was the first one. And it was a cash dispenser only, not a full ATM... We had a
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cash dispenser, and then the next version was going to be the total teller (created in 1971),
which is the ATM we all know today -- takes deposits, transfers money from checking to
savings, savings to checking, cash advances to your credit card, takes payments; things like
that. So they didn't want just a cash dispenser alone." - Don Wetzel on the first ATM
installed at the Rockville Center, New York Chemical Bank from a NMAH interview.

The first ATMs were off-line machines, meaning money was not automatically withdrawn
from an account. The bank accounts were not (at that time) connected by a computer
network to the ATM. Therefore, banks were at first very exclusive about who they gave ATM
privileges to. Giving them only to credit card holders (credit cards were used before ATM
cards) with good banking records. Wetzel, Barnes and Chastain developed the first real ATM
cards, cards with a magnetic strip and a personal ID number to get cash. ATM cards had to
be different from credit cards (then without magnetic strips) so account information could be
included.

The world's first ATM was installed in Enfield Town in the London Borough of Enfield,
London on June 27, 1967 by Barclays Bank.

In modern ATMs, customers authenticate themselves by using a plastic card with a

magnetic stripe, which encodes the customer's account number, and by entering a numeric
passcode called a PIN (personal identification number), which may be changed using the
machine. Typically, if the number is entered incorrectly several times in a row, most ATMs will
retain the card as a security precaution to prevent an unauthorised user from working out the PIN
by pure guesswork.

1.4 NETWORKING:-

Most ATMs are connected to interbank networks, enabling people to withdraw money
from machines not belonging to the bank where they have their account. (Deposits can only be
made at machines belonging to the bank that has the account.) This is a convenience, especially
for people who are travelling: it is possible to make withdrawals in places where one's bank has
no branches, and even to withdraw local currency in a foreign country, often at a better exchange
rate than would be available by changing cash.

1.5 ATM CHARGES:-

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Many banks in the USA charge fees for the use of their ATMs by non-depositors, for withdrawals
over the network by their own customers, or both; however, in the UK strong public reaction
soon persuaded banks not to do this. There is also now a flourishing business in the United States
of placing ATMs in grocery stores, malls, and other locations other than banks: some of these
machines have signs advertising "low" fees.

1.6 HARDWARE AND SOFTWARE :-

ATMs contain secure cryptoprocessors, generally within an IBM PC compatible host computer
in a secure enclosure. The security of the machine relies mostly on the integrity of the secure
cryptoprocessor: the host software often runs on a commodity operating system.

In-store ATM Machine

In store ATMs typically connect directly to their ATM Transaction Processor via a modem over a
dedicated telephone line, although the move towards Internet connections is under way.
Along with the move to the internet, ATMs are moving away from custom circut boards
(most of which are based on Intel 8086 architecture) and into full fledged PCs with
commercial operating systems like Windows 2000 and Linux. A good example of that is
Banrisul, the largest bank in the South of Brazil, which has replaced the MS-DOS
operating systems in its automatic teller machines with Linux. Also are used RMX 86,
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OS/2 and Windows 98 bundled with Java. The newest use Windows XP or Windows XP
embedded

1.6 RELIABILITY :-

ATMs are generally reliable, but if they do go wrong customers will be left without
cash until the following morning or whenever they can get to the bank during opening hours. Of
course not all errors are to the detriment of customers; there have been cases of machines giving
out money without debiting the account or giving out a higher denomination of note by mistake.
Sometims annoying software errors can occur which can appear as a dialog box on the screen
which is imposible to close.

1.7 SECURITY :-

Early ATM security focused on making the ATMs invulnerable to physical attack;
they were effectively safes with dispenser mechanisms. A number of attacks on ATMs resulted,
with thieves attempting to steal entire ATMs by ram-raiding.

Modern ATM physical security concentrates on denying the use of the money
inside the machine to a thief, by means of techniques such as dye markers and smoke canisters.
This change in emphasis has meant that ATMs are now frequently found free-standing in places
like shops, rather than mounted into walls.

ATM transactions are usually encrypted with DES but most transaction processors
will require the use of the more secure Triple DES by 2005.

There are also many "phantom withdrawals" from ATMs, which banks often
claim are the result of fraud by customers. Phantom withdrawals are considered to be a problem
generated by dishonest insiders by most other observers. Ross Anderson, a leading cryptography
researcher, has been involved in investigating many cases of phantom withdrawals, and has been
responsible for exposing several errors in bank security.

There have also been a number of incidents of fraud where criminals have used
fake machines or have installed fake keypads or card readers to existing machines. They have
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used these to record customers' PIN numbers and bank accounts and have then used this
information to create fake accounts and steal money from consumers.

A bank is always liable when a customer's money is stolen from an ATM, but there have been
complaints that banks have made it difficult to recover money lost in this way.

1.8 SOME ATM MANUFACTURERS :-

Diebold
IBM
NCR
Tidel
Triton
Wincor Nixdorf

Parts of the Machine

You're probably one of the millions who has used an ATM. As you know,
2.1AN ATM HAS TWOOUTPUT DEVICES:-
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2.1.0 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.

2.1.2 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.

2.3 AN ATM FOUR OUTPUT DEVICES:-

2.3.1 SPEAKER: - The speaker provides the cardholder with auditory feedback when a key is
pressed.
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2.3.2 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.

2.3.3 RECEIPT PRINTER: - The receipt printer provides the cardholder with a paper receipt of
the transaction.

2.3.4 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. The cash-
dispensing mechanism has an electric eye that counts each bill as it exits the dispenser. The bill
count and all of the information pertaining to a particular transaction is recorded in a journal. The
journal information is printed out periodically and a hard copy is maintained by the machine
owner for two years. Whenever a cardholder has a dispute about a transaction, he or she can ask
for a journal printout showing the transaction, and then contact the host processor. If no one is
available to provide the journal printout, the cardholder needs to notify the bank or institution
that issued the card and fill out a form that will be faxed to the host processor. It is the host
processor's responsibility to resolve the dispute.

Besides the electric eye that counts each bill, the cash-dispensing mechanism also
has a sensor that evaluates the thickness of each bill. If two bills are stuck together, then instead
of being dispensed to the cardholder they are diverted to a reject bin. The same thing happens
with a bill that is excessively worn, torn, or folded.
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The number of reject bills is also recorded so that the machine owner can be aware
of the quality of bills that are being loaded into the machine. A high reject rate would indicate a
problem with the bills or with the dispenser mechanism.

How Do Atms Work?

3.1INTRODUCTION:-An ATM is simply a data terminal with two input and four output
devices. Like any other data terminal, the ATM has to connect to, and communicate through, a
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host processor. The host processor is analogous to an Internet service provider (ISP) in that it is
the gateway through which all the various ATM networks become available to the cardholder
(the person wanting cash).

Most host processors can support either leased-line or dial-up machines. Leased-line machines
connect directly to the host processor through a four-wire, point-to-point, dedicated telephone
line. Dial-up ATMs connect to the host processor through a normal phone line using a modem
and a toll-free number, or through an Internet service provider using a local access number dialed
by modem.

Leased-line ATMs are preferred for very high-volume locations because of their thru-put
capability, and dial-up ATMs are preferred for retail merchant locations where cost is a greater
factor than thru-put. The initial cost for a dial-up machine is less than half that for a leased-line
machine. The monthly operating costs for dial-up are only a fraction of the costs for leased-line.
The host processor may be owned by a bank or financial institution, or it may be owned by an
independent service provider. Bank-owned processors normally support only bank-owned
machines, whereas the independent processors support merchant-owned machines.

ATM SECURITY
4.1INTRODUCTION:-Many banks recommend that you select your own personal identification
number (PIN). Visa recommends the following PIN tips:
Don't write down your PIN. If you must write it down, do not store it in your wallet or purse.
Make your PIN a series of letters or numbers that you can easily remember, but that cannot
easily be associated with you personally.
Avoid using birth dates, initials, house numbers or your phone number.
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Visa also recommends the following tips for safe ATM usage:

Store your ATM card in your purse or wallet, in an area where it won't get
scratched or bent.
Get your card out BEFORE you approach the ATM. You'll be more
vulnerable to attack if you're standing in front of the ATM, fumbling through your wallet for your
card.
Stand directly in front of the ATM keypad when typing in your PIN. This
prevents anyone waiting to use the machine from seeing your personal information.
After your transaction, take your receipt, card and money away. Do not
stand in front of the machine and count your money.
If you are using a drive-up ATM, get your vehicle as close to the machine
as possible to prevent anyone from coming up to your window. Also make sure that your doors
are locked before you drive up to the machine.
Do not leave your car running while using a walk-up ATM. Take your
keys with you and lock the doors before your transaction.
If someone or something makes you uncomfortable, cancel your
transaction and leave the machine immediately. Follow up with your bank to make sure the
transaction was cancelled and alert the bank to any suspicious people.

Many retail merchants close their store at night. It is strongly recommended that
they pull the money out of the machine when they close, just like they do with their cash
registers, and leave the door to the security compartment wide open like they do with an empty
cash-register drawer. This makes it obvious to any would-be thief that this is not payday.
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It's important to use a well-lit, public ATM machine at night.

For safety reasons, ATM users should seek out a machine that is located in a well-
lighted public place. Federal law requires that only the last four digits of the cardholder's account
number be printed on the transaction receipt so that when a receipt is left at the machine location,
the account number is secure. However, the entry of your four-digit personal identification
number (PIN) on the keypad should still be obscured from observation, which can be done by
positioning your hand and body in such a way that the PIN entry cannot be recorded by store
cameras or store employees. The cardholder's PIN is not recorded in the journal, but the account
number is. If you protect your PIN, you protect your account.
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Your ATM PIN should be a number that you could easily remember, but that would not be
readily available to thieves.

4.2New Innovations
Several companies are advertising ATMs for the blind. These machines would be
located at kiosks rather than bank drive-thrus. For several years, the keypads at ATMs were
equipped with braille for the blind or visually impaired.

New innovations in this technology will include machines that verbally prompt the
customers for their card, their PIN and the type of transaction they would like to make.

An ATM is simply a data terminal with two input and four output devices. Like any
other data terminal, the ATM has to connect to, and communicate through, a host processor. The
host processor is analogous to an Internet service provider (ISP) in that it is the gateway through
which all the various ATM networks become available to the cardholder (the person wanting the
cash).

Most host processors can support either leased-line or dial-up machines. Leased-line
machines connect directly to the host processor through a four-wire, point-to-point, dedicated
telephone line. Dial-up ATMs connect to the host processor through a normal phone line using a
modem and a toll-free number, or through an Internet service provider using a local access
number dialed by modem.
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Leased-line ATMs are preferred for very high-volume locations because

of their thru-put capability, and dial-up ATMs are preferred for retail merchant locations where
cost is a greater factor than thru-put. The initial cost for a dial-up machine is less than
half that for a leased-line machine. The monthly operating costs for dial-up are only a fraction of
the costs for leased-line.
The host processor may be owned by a bank or financial institution, or it may be
owned by an independent service provider. Bank-owned processors normally support only bank-
owned machines, whereas the independent processors support merchant-owned machines.

Conclusion:-
ATM is now introduced so many bank in almost all in the Globe.The commercial purpose of
ATM is now demanding all among like students,service man,business man and so general
people.Now it also preferred for blind man.User are save from danger like stealing money etc.
Due to its advantages is more then its disadvantages,the popularity is now increased .From the
above thesis ,the advanced future of ATM is almost bright.