Part 1: ATM Overview
An automatic teller machine or automated teller machine (ATM) is an electronic device that allows a bank's customers to make cash withdrawals and check their account balances without the need for a human teller. Many ATMs also allow people to deposit cash or cheques, transfer money between their bank accounts, top up their mobile phones' pre-paid accounts or even buy postage stamps.
History:
The world's first ATM was developed by De La Rue and installed in Enfield Town in North London on June 27, 1967 by Barclays Bank. This instance of the invention is credited to John Shepherd-Barron, although Luther George Simjian registered patents in New York, USA in the 1930s and Donald Wetzel and two other engineers from Docutel registered a patent on June 4, 1973. Shepherd-Barron was awarded an OBE in the 2005 New Year's Honors.
The first ATMs accepted only a single-use token or voucher, which was retained by the machine. These worked on various principles including radiation and low-coercivity magnetism that was wiped by the card reader to make fraud more difficult.
The idea of a personal identification number (PIN) stored on a physical card being compared with the PIN entered when retrieving the money was developed by the British engineer James Goodfellow in 1965, who also holds international patents regarding this technology.
The first Talking ATMs -- ATMS with private audible instructions for blind people -- were installed in Canada in 1999. The first Talking ATM in the United States was installed in San Francisco in October of that same year. By 2005 there were approximately 30,000 Talking ATMs in the United States.
Usage:
In most modern ATMs, the customer identifies him or herself by inserting a plastic card with a magnetic stripe that contains his or her account number. The customer then verifies his or her identity by entering a pass code (PIN) of four or more digits. If the number is entered incorrectly several times in a row (usually three), most ATMs will retain the card as a security precaution to prevent an unauthorized user from discovering the PIN by guesswork (these cards are sometimes destroyed after being removed from the machine to prevent bank staff from misusing them). In some cases, the customer's PIN may be changed using the machine.
Some ATMs use smartcards to store customer data.
Networking:
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 traveling: 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. Some examples of interbank networks include Hong Kong's JETCO and the Philippines' Expressnet.
ATMs rely on authorization of a transaction by the card issuer or other authorizing institution via the communications network.
ATM Charges:
Many banks in the United States charge fees for the use of their ATMs. In some cases, these fees are assessed solely for non-bank members, in other cases they apply to all users. Many oppose these fees because ATMs are actually less costly for banks than withdrawals from human tellers. Two charges exist in the consumer world of ATM usage, the surcharge, and the foreign fee. The surcharge fee may be imposed by the ATM deployer and will be charged to the consumer using the machine, this fee has been on the rise as ATM deployment continues to rise and ATM transaction volumes remain stagnant. The foreign fee or transaction fee is a fee charged by the card issuer (financial institution, stored value provider) to the consumer for conducting a transaction outside of their network of machines in the case of a financial institution, this fee is also on the rise as financial institutions seek more fee based income.
When the ATM surcharges emerged in the 1980s, they usually were on the order of $0.25. Quickly, however, they climbed. ATM fees now commonly reach $1.50, and can be as high as $5.00, especially around bars and casinos. In cases where fees are paid both to the bank and the ATM owner withdrawal fees could potentially reach $10. This would be an example of a foreign fee and a surcharge coming together.
ATMs are placed not only near banks, but also in locations such as shopping centers/malls, grocery stores, and restaurants. These represent two types of ATMs, on and off premise. On premise ATMs are usually more advanced machines and thus more expensive machines, off premise machines are deployed by financial institutions and ISO's or independent sales organizations. ISO's are the driving force in ATM deployment in the U.S. today representing over 60% of the 396,000 ATMs nationwide. Sometimes, ATMs are advertised for their fees. This is more of a cautionary statement. ATMs are required by law to inform you of the fees that the machine will charge you, this may come in the push through menu or it may be on a sticker on the machine. Your foreign fee, however, will not be listed as the ATM and its owner are not charging you that fee, your bank is!
In the United Kingdom, public reaction to proposed increases in fees was so strong that fees were removed altogether for using ATMs at banks, regardless of whether the user is a customer of that bank. However, there are a growing number of machines in locations such as garages, nightclubs and other venues which do charge. The fee is usually between £1.50 and £2.00, but occasionally they have been known to charge up to £5 and in one central London club £10. There has been some debate in recent years about the location of machines which charge in deprived areas, where the larger banks which would have provided free ATMs have closed branches.
In many places, one can circumvent ATM fees by using debit cards at retailers; this is known as a POS or point of sale transaction. Many stores allow a debit-card user to receive "cash back" with an order; that is, one can make a withdrawal by adding an additional amount of money onto the charge, with the retailer providing the difference in cash. The downside to this is that charging for these transactions is on the rise by financial institutions which treat the transaction as a foreign withdrawal. There are other drawbacks as well, namely the limitations on transaction types and the amount of the withdrawal. Most retailers limit a POS transaction to $40 (£50 in the UK), this is for a variety of reasons, mostly because carrying abundant sums of cash in convenience stores is a risky proposition due to theft issues internally and externally.
Alternate Uses:
Although ATMs were originally developed as 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:
Paying routine bills, fees, and taxes (utilities, phone bills, social security, legal fees, taxes, etc.)
Loading monetary value into pre-paid cards (cell phones, tolls, multi purpose stored value cards, etc.)
Ticket purchases (train, concert, etc.).
Many ATMs in the United States also allow users to purchase stamps.
In Japan, where banks charge for cash withdrawals, ATMs are not very popular. In the hopes of attracting more users, new Ogaki Kyoritsu Bank ATMs will include games of chance that allow users to waive these fees or win 1000 yen, while Bank of Tokyo Mitsubishi ATMs include biometric security technology.
Talking ATM:
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. By 2005, 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, supported by the federal Americans with Disabilities Act.
ATM Card vs. Check Card:
As an alternative to writing checks and using a credit card, most major banks have teamed up with major credit-card companies to issue check cards.
Check cards are different from straight ATM cards in a couple of ways. First, check cards are also known as debit cards because of how they work -- instead of getting credit for your purchase and receiving a monthly bill, like you do with a credit card, a check/debit card deducts money from your checking or savings account.
Also, while you can only use your ATM card at the ATM machine (and some grocery stores), you can use a check card at most retailers that accept credit cards, such as:
Grocery stores
Gas stations
Discount superstores
Book stores
Ticket counters (concert tickets, airline tickets, etc.)
Pharmacies
Hotels
E-tailors
Restaurants
There are exceptions. Some hotels and rental car services only accept credit cards because it's easier, cheaper, and less of a risk to them than check cards. Those that do accept check cards often put a certain amount of money in your bank account "on hold" (unavailable to you) -- usually the cost of the room or rental including taxes and other fees, plus a percentage of the total or a fee to cover possible damages. When you check out of the hotel or turn in your rental car, the difference between the "hold" amount and what you're actually billed is released back into your account. This is something to consider when using your debit card to reserve a hotel room or rent a car.
You can use your check card as either a credit card or a debit card -- either way; it comes out of your account. The only difference is that if you tell the clerk "credit card," you sign a slip, and if you tell the clerk "debit card," you enter your PIN number instead of signing. Some banks charge you a fee if you use your check card as a debit card (if it costs them more to process those transactions), but not if you use it as a credit card.
It's easy to tell the difference between a plain ATM card and a check card: A check card has your name, "credit" account number, the credit company's logo, the bank's logo and "Check Card" printed across the front of it; an ATM card has only your name, account number and bank's logo on the front of it. Both cards have strips on the back for the authorized cardholder to sign on. A check card company, such as Visa, has agreements with banks to issue what looks like a Visa credit card. A Visa check card can be used at any retailer that accepts Visa credit cards and at ATMs worldwide
An automatic teller machine or automated teller machine (ATM) is an electronic device that allows a bank's customers to make cash withdrawals and check their account balances without the need for a human teller. Many ATMs also allow people to deposit cash or cheques, transfer money between their bank accounts, top up their mobile phones' pre-paid accounts or even buy postage stamps.
History:
The world's first ATM was developed by De La Rue and installed in Enfield Town in North London on June 27, 1967 by Barclays Bank. This instance of the invention is credited to John Shepherd-Barron, although Luther George Simjian registered patents in New York, USA in the 1930s and Donald Wetzel and two other engineers from Docutel registered a patent on June 4, 1973. Shepherd-Barron was awarded an OBE in the 2005 New Year's Honors.
The first ATMs accepted only a single-use token or voucher, which was retained by the machine. These worked on various principles including radiation and low-coercivity magnetism that was wiped by the card reader to make fraud more difficult.
The idea of a personal identification number (PIN) stored on a physical card being compared with the PIN entered when retrieving the money was developed by the British engineer James Goodfellow in 1965, who also holds international patents regarding this technology.
The first Talking ATMs -- ATMS with private audible instructions for blind people -- were installed in Canada in 1999. The first Talking ATM in the United States was installed in San Francisco in October of that same year. By 2005 there were approximately 30,000 Talking ATMs in the United States.
Usage:
In most modern ATMs, the customer identifies him or herself by inserting a plastic card with a magnetic stripe that contains his or her account number. The customer then verifies his or her identity by entering a pass code (PIN) of four or more digits. If the number is entered incorrectly several times in a row (usually three), most ATMs will retain the card as a security precaution to prevent an unauthorized user from discovering the PIN by guesswork (these cards are sometimes destroyed after being removed from the machine to prevent bank staff from misusing them). In some cases, the customer's PIN may be changed using the machine.
Some ATMs use smartcards to store customer data.
Networking:
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 traveling: 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. Some examples of interbank networks include Hong Kong's JETCO and the Philippines' Expressnet.
ATMs rely on authorization of a transaction by the card issuer or other authorizing institution via the communications network.
ATM Charges:
Many banks in the United States charge fees for the use of their ATMs. In some cases, these fees are assessed solely for non-bank members, in other cases they apply to all users. Many oppose these fees because ATMs are actually less costly for banks than withdrawals from human tellers. Two charges exist in the consumer world of ATM usage, the surcharge, and the foreign fee. The surcharge fee may be imposed by the ATM deployer and will be charged to the consumer using the machine, this fee has been on the rise as ATM deployment continues to rise and ATM transaction volumes remain stagnant. The foreign fee or transaction fee is a fee charged by the card issuer (financial institution, stored value provider) to the consumer for conducting a transaction outside of their network of machines in the case of a financial institution, this fee is also on the rise as financial institutions seek more fee based income.
When the ATM surcharges emerged in the 1980s, they usually were on the order of $0.25. Quickly, however, they climbed. ATM fees now commonly reach $1.50, and can be as high as $5.00, especially around bars and casinos. In cases where fees are paid both to the bank and the ATM owner withdrawal fees could potentially reach $10. This would be an example of a foreign fee and a surcharge coming together.
ATMs are placed not only near banks, but also in locations such as shopping centers/malls, grocery stores, and restaurants. These represent two types of ATMs, on and off premise. On premise ATMs are usually more advanced machines and thus more expensive machines, off premise machines are deployed by financial institutions and ISO's or independent sales organizations. ISO's are the driving force in ATM deployment in the U.S. today representing over 60% of the 396,000 ATMs nationwide. Sometimes, ATMs are advertised for their fees. This is more of a cautionary statement. ATMs are required by law to inform you of the fees that the machine will charge you, this may come in the push through menu or it may be on a sticker on the machine. Your foreign fee, however, will not be listed as the ATM and its owner are not charging you that fee, your bank is!
In the United Kingdom, public reaction to proposed increases in fees was so strong that fees were removed altogether for using ATMs at banks, regardless of whether the user is a customer of that bank. However, there are a growing number of machines in locations such as garages, nightclubs and other venues which do charge. The fee is usually between £1.50 and £2.00, but occasionally they have been known to charge up to £5 and in one central London club £10. There has been some debate in recent years about the location of machines which charge in deprived areas, where the larger banks which would have provided free ATMs have closed branches.
In many places, one can circumvent ATM fees by using debit cards at retailers; this is known as a POS or point of sale transaction. Many stores allow a debit-card user to receive "cash back" with an order; that is, one can make a withdrawal by adding an additional amount of money onto the charge, with the retailer providing the difference in cash. The downside to this is that charging for these transactions is on the rise by financial institutions which treat the transaction as a foreign withdrawal. There are other drawbacks as well, namely the limitations on transaction types and the amount of the withdrawal. Most retailers limit a POS transaction to $40 (£50 in the UK), this is for a variety of reasons, mostly because carrying abundant sums of cash in convenience stores is a risky proposition due to theft issues internally and externally.
Alternate Uses:
Although ATMs were originally developed as 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:
Paying routine bills, fees, and taxes (utilities, phone bills, social security, legal fees, taxes, etc.)
Loading monetary value into pre-paid cards (cell phones, tolls, multi purpose stored value cards, etc.)
Ticket purchases (train, concert, etc.).
Many ATMs in the United States also allow users to purchase stamps.
In Japan, where banks charge for cash withdrawals, ATMs are not very popular. In the hopes of attracting more users, new Ogaki Kyoritsu Bank ATMs will include games of chance that allow users to waive these fees or win 1000 yen, while Bank of Tokyo Mitsubishi ATMs include biometric security technology.
Talking ATM:
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. By 2005, 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, supported by the federal Americans with Disabilities Act.
ATM Card vs. Check Card:
As an alternative to writing checks and using a credit card, most major banks have teamed up with major credit-card companies to issue check cards.
Check cards are different from straight ATM cards in a couple of ways. First, check cards are also known as debit cards because of how they work -- instead of getting credit for your purchase and receiving a monthly bill, like you do with a credit card, a check/debit card deducts money from your checking or savings account.
Also, while you can only use your ATM card at the ATM machine (and some grocery stores), you can use a check card at most retailers that accept credit cards, such as:
Grocery stores
Gas stations
Discount superstores
Book stores
Ticket counters (concert tickets, airline tickets, etc.)
Pharmacies
Hotels
E-tailors
Restaurants
There are exceptions. Some hotels and rental car services only accept credit cards because it's easier, cheaper, and less of a risk to them than check cards. Those that do accept check cards often put a certain amount of money in your bank account "on hold" (unavailable to you) -- usually the cost of the room or rental including taxes and other fees, plus a percentage of the total or a fee to cover possible damages. When you check out of the hotel or turn in your rental car, the difference between the "hold" amount and what you're actually billed is released back into your account. This is something to consider when using your debit card to reserve a hotel room or rent a car.
You can use your check card as either a credit card or a debit card -- either way; it comes out of your account. The only difference is that if you tell the clerk "credit card," you sign a slip, and if you tell the clerk "debit card," you enter your PIN number instead of signing. Some banks charge you a fee if you use your check card as a debit card (if it costs them more to process those transactions), but not if you use it as a credit card.
It's easy to tell the difference between a plain ATM card and a check card: A check card has your name, "credit" account number, the credit company's logo, the bank's logo and "Check Card" printed across the front of it; an ATM card has only your name, account number and bank's logo on the front of it. Both cards have strips on the back for the authorized cardholder to sign on. A check card company, such as Visa, has agreements with banks to issue what looks like a Visa credit card. A Visa check card can be used at any retailer that accepts Visa credit cards and at ATMs worldwide
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