Automated Teller Machine (ATM), device used by bank customers to process account transactions. Typically, a user inserts into the ATM a special plastic card that is encoded with information on a magnetic strip. The strip contains an identification code that is transmitted to the bank’s central computer by modem. To prevent unauthorized transactions, a personal identification number (PIN) must also be entered by the user using a keypad. The computer then permits the ATM to complete the transaction; most machines can only dispense cash, but a few others accept deposits, transfer funds, and provide information on account balances. Banks have formed cooperative, nationwide networks so that a customer of one bank can use an ATM of another for cash access. Some ATMs will also accept credit cards for cash advances.
In most modern ATMs, the customer identifies him or herself by inserting a plastic card with a magnetic stripe or a plastic smartcard with a chip, that contains his or her account number. The customer then verifies his or her identity by entering a passcode (PIN) of four or more digits. 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 discovering the PIN by guesswork.
Most ATMs are connected to interbank networks, enabling people to withdraw and deposit money from machines not belonging to the bank where they have their account. This is a convenience, especially for people who are travelling: it is possible to make withdrawals in places where one’s bank has no branches, and even to withdraw local currency in a foreign country, often at a better exchange rate than would be available by changing cash. ATMs rely on authorization of a transaction by the card issuer or other authorizing institution via the communications network.
ATMs are placed not only near banks, but also in locations such as railway stations, shopping centres/malls, grocery stores, and restaurants.
ATMs contain secure cryptoprocessors, generally within an IBM PC compatible host computer in a secure enclosure. The security of the machine relies mostly on the integrity of the secure cryptoprocessor—the host software often runs on a commodity operating system.
ATMs typically connect directly to their ATM Transaction Processor via either a dial-up modem over a telephone line or directly via a leased line. The latter is preferable as the time required to establish the connection is much less. Such connections are rather expensive, though, meaning less-trafficked machines will usually rely on a dial-up modem. That dilemma may be solved as more ATMs use dedicated high-speed Internet connections, which are much cheaper than leased lines.
ATMs are generally reliable, but if they do go wrong customers will be left without cash until the following morning or whenever they can get to the bank during opening hours. Of course, not all errors are to the detriment of customers; there have been cases of machines giving out money without debiting the account, or giving out higher value notes as a result of incorrect denomination of banknote being loaded in the money cassettes. Errors that can occur may be mechanical (such as card transport mechanisms; keypads; hard disk failures); software (such as operating system; device driver; application); communications; or purely down to operator error.
Many ATMs usually print each transaction in a paper journal that is rolled into a roll of paper stored inside the ATMs, which allows both the users of the ATMs and the related financial institutions to settle things based on the records in the journal in case there is a dispute. In some cases, transactions are posted to an electronic journal to reduce the need for paper trails.
A Talking ATM is a type of ATM that provides audible instructions so that persons who cannot read an ATM screen can independently use the machine. All audible information is delivered privately through a standard jack on the face of the machine. A user plugs a standard headset into the jack, and can hear instructions such as “press 1 for withdrawal”, “press 2 for deposit.” There is an audible orientation for first time users, and audible information describing the location of features such as the number keypad, deposit slot, and card slot. The first Talking ATMs were installed in Canada in 1999, and the first U.S. Talking ATM was installed in October of that year in San Francisco. Now, there were over 30,000 Talking ATMs in the United States, and audible machines installed in other countries as well. The blind community in the United States advocated heavily for development and installation of Talking ATMs.
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