INTRODUCTION OF ATMAutomated Teller Machines (ATMs) have gainedprominence as a delivery channel for bankingtransactions in India. Banks have been deploying ATMsto increase their reach. As at the end of December 2007,the number of ATMs deployed in India was 32,342.According to a survey by Bank net India, 95% peoplenow prefer this modern channel to traditional mode ofbanking. Almost 60% people use an ATM at least once aweek.
Cont… 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.
Cont… 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. ATMs per million people approximately is 33 units is very low. Experts forecast that the growth rate (CAGR) 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.
HISTORY OF ATMThe first Automated Teller Machine (ATM) wasintroduced in the year 1967 by Barclays Bank inEnfield Town in North London. At that time a fewwould have anticipated excess in ATMs. The mainobjective of introducing the ATM was reducingcustomer’s time, lesser bank distribution cost andenhancing the efficiency of banking institutes.
How Do ATMs Work?An ATM is simply adata terminal with twoinput and four outputdevices. Like any otherdata terminal, the ATMhas to connect to, andcommunicate through, ahost processor
Cont… 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.
Settlement FundsWhen a cardholder wants to do an ATM tra-nsaction,he or she provides the necessary information bymeans of the card reader and keypad.ATM forwards this information to the host processor,which routes the transaction request to thecardholders bank or the institution that issued thecard.If the cardholder is requesting cash, the hostprocessor causes an electronic funds transfer to takeplace from the customers bank account to the hostprocessors account.
Cont… Once the funds are transferred to the host processors bank account, the processor sends an approval code to the ATM authorizing the machine to dispense the cash.
LOCATION OF ATMATMs are placed not only near or inside the premisesof banks, but also in locations such as shoppingcenters/malls, airports, grocery stores, petrol/gasstations, restaurants, or any place large numbers ofpeople may gather.
Parts of ATM Card Reader Keypad Speaker Display Screen Receipt Printer Cash Dispenser
Input Device 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 cardholders bank. 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 cardholders personal identification number (PIN) for verification. Federal law requires that the PIN block be sent to the host processor in encrypted form.
Output Device Speaker - The speaker provides the cardholder with auditory feedback when a key is pressed. 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. Receipt printer - The receipt printer provides the cardholder with a paper receipt of the transaction. 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.
SECURITYDont write down your PIN. If you must write itdown, do not store it in your wallet or purse.Make your PIN a series of letters or numbers that youcan easily remember, but that cannot easily beassociated with you personally.Avoid using birth dates, initials, house numbers oryour phone number.
BENEFITS OF ATMCash Withdrawal and Balance EnquiryCash /Cheque DepositBill PaymentsChange ATM pin
ATM for visually impairedThere are ATMs that areaccessible to blind andvisually impairedpeople. These machinesare located at kiosksrather than bank drive-thrus. And the keypadsat ATMs are equippedwith Braille.
Guideline related to fraud preventionIf you do not feel safe at any time, press the ATMcancel button, remove your card and leave the areaimmediately.Minimize your time at the ATM.Make smart deposits.Avoid using ATMs at night.Be aware of your surroundings.