31-01-2012, 10:28 AM
AUTOMATIC TELLER MACHINE
Introduction :
An Automatic Teller Machine (ATM) is a machine permitting a Bank’s customers to make cash withdrawals and check their account at any time and without the need for a human teller. Many ATMs also allow people to deposit cash or cheques and transfer money between their bank accounts.
You're short on cash, so you walk over to the automated teller machine (ATM), insert your card into the card reader, respond to the prompts on the screen, and within a minute you walk away with your money and a receipt. These machines can now be found at most supermarkets, convenience stores and travel centers. Have you ever wondered about the process that makes your bank funds available to you at an ATM on the other side of the country?
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
• Cash Machine
• Robotic Teller
• Cashpoint (in the United Kingdom particularly)
• Bancomat or Bankomat (particularly in continental Europe) Bancomat is a trademark of UBS AG
• Geldautomat Germany (Geld = money)
• Postmat, Switzerland (Swiss Post Bank ATM)
• 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)
• Ugly Teller
History
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 in some cases 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.
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.
ATM Charges
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.
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
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, OS/2 and Windows 98 bundled with Java. The newest use Windows XP or Windows XP embedded.
Reliabillity
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. Sometimes annoying software errors can occur which can appear as a dialog box on the screen which is impossible to close.
ATM CARD VS CREDIT CARD
The card you use at the ATM is known as a debit card. When debit cards first appeared it was easy to tell them apart from credit cards. Debit cards didn't have a credit card company logo on them; instead, they usually just had your bank name, your account number and your name.
Today debit cards look exactly like credit cards even carrying the same logos. Both types of cards can be swiped at the checkout counter , used to make purchases on the internet, or to pay for the fill-up at the gas pump.
When you use your debit card to make a purchase, it's just like using cash. The account that is attached to your debit card, in most cases your checking account, is automatically debited when you use your debit card. The cost of your purchase is deducted from the funds you have in that account.
On the other hand, when you use your credit card to make a purchase you are using someone's else's money, specifically the issuer of the credit card, usually a banking institution.
In effect, you agree to pay them back the money you borrowed to make your purchase. In addition you will also pay interest on the money "loaned" to you at the rate which you agreed to when you applied for their credit card. This is known as the annual percentage rate (APR).
While the two cards might act and look alike, the levels of consumer protection that each type of card provides can be different.
Under federal law, if someone steals your credit card you're only responsible to pay the first $50 of unauthorized charges. However, if you notify the credit card issuer before a thief is able to make any charges you may be free from all liability. If the credit card is not physically present when an unauthorized or fraudulent purchase is made, such as over the internet, you're also free from liability for those charges.
The protection offered to debit card fraud is similar but with a few exceptions. For example, your liability under federal law is limited to $50, the same as for a credit card, but only if you notify the issuer within two business days of discovering the card's loss or theft. Your liability for debit card fraud can jump up to $500 if you don't report the loss or theft within two business days.
And if you are the type of person that gives a passing glance to your monthly bank statement, you could be totally liable for any fraudulent debit card charges if you wait 60 days or more from the time your statement is mailed.
Additional protection against fraudulent use of your credit or debit cards may be available through your homeowner's or renter's insurance. Check your policy or with your agent for more information about your coverage.
Also be aware that you should contact your card issuer by certified letter, return receipt requested, after you've contacted them by phone to protect your consumer rights.
As for which card to use for what type of purchase, most experts agree that you should use your debit card for the same type of purchases you'd make as if you were using cash. Therefore, it makes more sense to use your debit card than your credit card at the grocery store or gas station (provided you have sufficient funds to cover these purchases of course).
You should avoid using your debit card for any online purchase or for something which is expensive. Why ? The main reason is that it is much easier to dispute a charge when you use your credit card. If your gold-plated, limited edition, hip-swinging Elvis wall clock arrives broken, your credit card company will remove the charge until the problem is resolved.
With your debit card you are stuck dealing with the merchant directly to resolve any problems with a purchase, even if your banking institution could really use a gold-plated, limited edition, hip-swinging Elvis wall clock of their very own.
