An ATM is simply a data terminal with two input andfour output devices. Like any other data terminal, theATM has to connect to, and communicate through, ahost processor . The host processor is analogous toan Internet service provider (ISP) in that it is thegateway through which all the various ATM networksbecome available to the cardholder (the personwanting the cash).
British actor Reg Varney using the worlds first ATM in 1967, located at a branch of Barclays Bank, Enfield. The system was developed by De La Rue• A mechanical cash dispenser was developed and built by Luther George Simjian and installed in 1939 in New York City by the City Bank of New York, but removed after 6 months due to the lack of customer acceptance.• The ATM got smaller, faster and easier over the years. Thereafter, the history of ATMs paused for over 25 years, until De La Rue developed the first electronic ATM, which was installed first in Enfield Town in North London, United Kingdom  on 27 June 1967 by Barclays Bank. However, the modern, networked ATM was invented in Dallas, Texas, by Don Wetzel in 1968. Wetzel was a department head at an automated baggage- handling company called Docutel. In 1995 the Smithsonians National Museum of American History recognized Docutel and Wetzel as the inventors of the ATM.
ATMs are placed not only near or inside the premises of banks, but also in locations such as shopping centers/malls, airports, grocery stores, petrol/gas stations, restaurants, or any place large numbers of people may gather. These represent two types of ATM installations: on and off premise. On premise ATMs are typically more advanced, multi-function machines that complement an actual bank branchs capabilities and thus more expensive. Off premise machines are deployed by financial institutions and also ISOs (or Independent Sales Organizations) where there is usually just a straight need for cash, so they typically are the cheaper mono-function devices. In Canada, when an ATM is not operated by a financial institution it is known as a "White Label ATM".•
HARDWARE•Card reader - The card reader captures theaccount information stored on the magnetic stripe onthe back of an ATM/debit or credit card. The hostprocessor uses this information to route thetransaction to the cardholders bank.•Youre probably one of the millions who has used anATM. As you know, an ATM has two input devices:•Keypad - The keypad lets the cardholder tell thebank what kind of transaction is required (cashwithdrawal, balance inquiry, etc.) and for whatamount. Also, the bank requires the cardholderspersonal identification number (PIN) for verification.Federal law requires that the PIN block be sent tothe host processor in encrypted form.•
OUTPUT DEVICES:•Speaker - The speaker provides the cardholderwith auditory feedback when a key is pressed.•Display screen - The display screen promptsthe cardholder through each step of thetransaction process. Leased-line machinescommonly use a monochrome or color CRT(cathode ray tube) display. Dial-up machinescommonly use a monochrome or color LCD.•Receipt printer - The receipt printer providesthe cardholder with a paper receipt of thetransaction.•Cash dispenser - The heart of an ATM is thesafe and cash-dispensing mechanism. The entirebottom portion of most small ATMs is a safe thatcontains the cash.
SOFTWARETypical platforms used in ATM development include RMX, OS/2,and Microsoft operating systems (such as MS-DOS, PC-DOS,Windows NT, Windows 2000, Windows XP Professional, orWindows XP Embedded). Java, Linux and Unix may also be used inthese environments.Linux is also finding some reception in the ATM marketplace.
Settlement FundsWhen a cardholder wants to do an ATM transaction, 1) He or sheprovides the necessary information by means of the card readerand keypad.2) The ATM forwards this information to the host processor,which routes the transaction request to the cardholders bank orthe institution that issued the card.3) If the cardholder is requesting cash, the host processor causesan electronic funds transfer to take place from the customersbank account to the host processors account.4) Once the funds are transferred to the host processors bankaccount, the processor sends an approval code to the ATMauthorizing the machine to dispense the cash.
ALTERNATIVES USES:Although ATMs were originally developed as just cash dispensers, they have evolvedto include many other bank-related functions. In some countries, ATMs includemany functions which are not directly related to the management of ones ownbank account, such as:•Deposit currency recognition, acceptance, and recycling•Paying routine bills, fees, and taxes (utilities, phone bills, social security, legal fees,taxes, etc.)•Printing bank statements•Updating passbooks•Purchasing •Postage stamps. •Lottery tickets •train tickets •Shopping mall gift certificates.•Games and promotional features•Donating to charities
RELIABILITYBefore an ATM is placed in a public place, it typically hasundergone extensive testing with both test money and thebackend computer systems that allow it to performtransactions.ATMs and the supporting electronic financial networks aregenerally very reliable, with industry benchmarks typicallyproducing 98.25% customer availability for ATMs and up to99.999% availability for host systems. If ATMs do go out ofservice, customers could be left without the ability to maketransactions until the beginning of their banks next time ofopening hours.