Chapter One: Introduction (ATM at A Glance)
Automated Teller Machine (ATM)
The abbreviation ATM denotes Automated Teller Machine. An automated teller machine (ATM) can also be called as a cash machine or automated banking machine. ATM is an electrical banking outlet that enables the customers of a financial organization to complete financial dealings. It is an electronic telecommunication device, which allows customers to complete monetary dealings like cash drawing, without the aid of a bank representative, human cashier, clerk or a bank teller. Any person with a credit card or debit card, has the right to use most ATMs.
ATM as a part of Modern Life
At present, ATM is one of the most spontaneous ways of transaction. ATM is making people’s life very easy as they can acquire their money every time they need. People can use ATMs if they do not feel relaxed to convey huge amount of money. People do not want to carry either large sum of money or the cheque book all the time. So, they can easily get rid from this problem by using ATMs. At first they have to deposit money in the bank by opening an account. After that the bank will give an ATM card with a PIN number to them. By using those they can withdraw money from any ATM of that bank.
The Transaction Procedure
At first the customer has to insert the card in the machine and give the PIN number. Then the machine will show few instructions on the screen. By that time the main bank computer will verify the transaction by checking the PIN Number and Account Number as ATM is connected with the main bank computer. If the verification is correct then the customer will pick an instruction and the ATM will dispense the needed amount to the card holder.
ATM from the Viewpoint of Technologists
There is an enormous number of hypothesis developed regarding various phases of ATM Banking. On 2008, Bill Gates declared that “Banking is essential, banks are not”. This quotation means that the traditional bank branch is going be substituted by electronic banking to attract new users. “If the banks adopt new technology, they will be able to improve customer service level and connect their customers closer to the bank”, is believed by the banking sector.
The Evolution
In the previous decade, ATMs were simple cash dispensers. Through ATMs customers could only withdraw cash and receive details of their bank accounts. But at present ATMs have become the statement of technological development of the monetary institutions. The evolution of payments in recent history has gone from cash to cheques, and then to plastic money such as credit cards and debit cards. Interestingly, in several countries around the world the debit cards have become the most rapidly growing method of payments. Today, ATMs hold a strong position in the world, offering everyone a superior access to their money, be it in any corner of the world. ATMs can be found all over the world with ATMs on airports, newsagents, cruise and navy ships and petrol stations. Estimates developed by ATMIA states that there are currently more than 2.2 million automated teller machines are in use all over the world, or approximately per 3000 people in the world are using 1 automated teller machine.
Revolution in Modern Consumer Banking
The ATM was invented nearly 45 years ago. It was one of the greatest moments in the history of contemporary consumer banking. These machines transformed the way we thought about bank tellers and thus the way we spend money changed forever. Consumer could have limitless bills in their hand but at present when ATM has become a part and parcel of modern banking they can pay them within seconds with a simple swipe of a plastic card.
Future Expectations
Experts expect ATMs will become even more popular and forecast a growth in the number of ATM withdrawals. We are rapidly converting from a cash-based society to an all-digital, card-less and cash-less society. So, the ATM will also need to be transformed into a machine which is not only capable of processing plastic bank cards and dispense cash. Rather it has to be an all-in-one digital banking outpost which offers multi-channel uses to customers. ATMs can add new features and also develop the security issues to provide more supremacy than it is today.
Classifications of ATM
There are two primary types of ATMs.
1. Off-premise ATMs
2. On-premise ATMs
1. Off-premise ATMs: Off-premise ATMs are Basic units which allow customers to withdraw cash and collect reports of their account balances only.
2. On-premise ATMs: On-Premise ATMs are more complex machine which receives the deposits, offers credit card payment facilities, reports account information, prints tickets and provide many other advanced facilities. To access the progressive features of the complex units, a user must be an account holder at the bank that operates the machine.
ATM Ownership
In many cases, banks and credit unions own ATMs. However, individuals and businesses may also buy or lease ATMs, on their own or through an ATM franchise. When individuals or small businesses such as restaurants or gas stations own ATMs, the profit model is based on charging fees to the machine’s users. Banks also own ATMs with this intent, but in addition, the convenience of an ATM is a service banks use to attract clients. ATMs also take some of the customer service burden off bank tellers, saving banks money in payroll costs. Many automated teller machines have a sign above them, indicating the name of the bank or organization owning the terminal and possibly including the list of networks to which it is connected.
Locations of ATMs
1. Automated teller machines 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 anywhere frequented by large numbers of people like railway stations and metro stations.
2. In recent times, countries like India and some countries in Africa are installing automated teller machines in rural areas, which are solar powered and do not require air conditioning.
3. To simplify the analysis of automated teller machine usage around the world, financial institutions generally divide the world into seven regions, due to the penetration rates, usage statistics, and features deployed. Four regions (USA, Canada, Europe, and Japan) have high numbers of automated teller machines per million people. Despite the large number of automated teller machines, there is additional demand for machines in the Asia/Pacific area as well as in Latin America. Automated teller machines have yet to reach high numbers in the Near East and Africa.
4. One of the world’s most northerly installed automated teller machines is located at Longyearbyen, Svalbard, Norway. The world’s most southerly installed automated teller machine is located at McMurdo Station, located in New Zealand’s Ross Dependency, in Antarctica since 1997.
Facilities of ATMs:
1. General Facilities: Originally developed as cash dispensers, automated teller machines have evolved to include many other bank-related functions: Paying utility bills, phone bills, fees, and taxes, Printing bank statements, Updating passbooks, Cash advances, Cheque Processing Module, Paying the credit balance on a card linked to a specific current account, Transferring money between linked accounts, Deposit currency recognition, acceptance, and recycling
2. Advanced Facilities: In some countries, especially those which benefit from a fully integrated cross-bank network automated teller machines include many functions that are not directly related to the management of one’s own bank account, such as: Loading monetary value into stored value cards, Adding pre-paid cell phone / mobile phone credit, Purchasing concert tickets, gold, lottery tickets, movie tickets, postage stamps, train tickets, shopping mall gift certificates, Donating to charities.
3. Using ATMs Abroad: For travelers, ATMs make it simple to access their checking or savings accounts from almost anywhere in the world. When travelers use foreign ATMs, they receive a better exchange rate than they would at most currency exchange offices. Additionally, using an ATM is easier than cashing traveler’s checks, and arguably, it makes travel safer, as the traveler doesn’t have to carry a lot of cash. However, the account holder’s bank may charge a transaction fee or a percentage of the amount exchanged. Most ATMs do not list the exchange rate on the receipt, making it challenging to track spending.
4. ITM (the Intelligent Teller Machine): Increasingly, banks are seeking to use the automated teller machine as a sales device to deliver pre-approved loans and targeted advertising using products such as ITM (the Intelligent Teller Machine). ATMs can also act as an advertising channel for other companies.
5. More Innovative Technological Facilities: However, several different automated teller machine technologies have not yet reached worldwide acceptance, such as: Videoconferencing with human tellers, known as video tellers, Biometrics, where authorization of transactions is based on the scanning of a customer’s fingerprint, iris, face, Cheque/cash Acceptance, where the machine accepts and recognizes cheques and/or currency without using envelopes, Bar code scanning, On-demand printing of “items of value” (such as movie tickets, traveler’s cheques, etc.), Dispensing additional media (such as phone cards), Co-ordination of automated teller machines with mobile phones, Integration with non-banking equipment, Games and promotional features, CRM at the automated teller machine
6. Facilities Provided in Bangladesh: ATM services that are currently provided by different Banks of Bangladesh Withdraw cash 24 hours a day 7 days a week, Get a ‘mini-statement’ of the account, Pay credit card bills, Pay utility bills, Recharge mobile balance /Top up, Request for a cheque book., Funds Transfer (Intra Bank), Funds Transfer (Inter Bank), Change PIN whenever needed, Cash Deposit, Utility Bills, Mobile Bills, Broadband & Telecom Bills, School Bills, Updating Account Information.