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These days, almost 55 years have passed since the first automatic teller machine (ATM) served mankind. A device that certainly did not have such a mechanism in the beginning, nor a modern mechanism. But without a doubt, the most important motivation for the invention of such a tool was to reduce the confrontation with the counter clerk.
ATM’s full form is Automated Teller Machine which is a self-service banking outlet. You can withdraw money, check your balance, or even transfer funds. Different banks provide their ATM services by installing cash machines in different parts of the country. You can withdraw money from any of these machines irrespective of whether or not you are an account holder in the same bank.
Transactions are either free or bear a nominal charge depending upon the banks.
There are mainly two types of ATMs. One is a simple simple unit that allows you to withdraw cash, check your balance, change your PIN, receive small bills and receive account updates. More advanced units offer facilities for cash or check deposits, lines of credit and bill payments.
There are on-premise and off-premise ATMs: On-premise ATMs are inside the bank premises, unlike off-premise machines that are located in every corner of the country to ensure people have access to basic and immediate banking facilities.
ATMs can also be categorized based on the labels assigned to them. Some of these tags are listed below-
ATMs with green label – used for agricultural purposes
ATMs with yellow label – used for e-commerce transactions
ATMs with orange labels – used for stock transactions
ATMs with pink labels – exclusively for women to avoid long queues and waiting times
White Label ATMs – Introduced by the Tata Group, White Label ATMs are not owned by a particular bank but by entities other than banks.
Brown label banks – run by a third party other than the bank
There are also some automated biometric devices that require fingerprints and eye scanners to work.
When you need money from an ATM machine, you insert your credit or debit card into the ATM and enter a pin number assigned to you by your bank via the keypad. After approval of the Personal Identification Number (PIN) and card combination, prompts on the screen give you actions to select such as: withdraw cash, balance inquiry, or transfer. You select withdraw cash and select the amount using the keypad and screen. Upon your bank’s approval, money is dispensed from the ATM machine with an associated receipt.
In short, an ATM machine is a computer with a mechanical dispenser for cash that is connected to an ATM transaction processor through the internet or phone line. The ATM Transaction processor is able to connect to the ATM networks and, through these networks, to your bank.
This part controls the processing of the ATM. This houses the CPU, memory, and provides connection to all the other ATM parts.
This part reads account information that is stored on an EMV chip or magnetic strip. Most card readers and cards today are EMV-enabled. The EMV acronym stands for Europay, MasterCard, Visa. It is the global standard for chip-based debit and credit card transactions. The EMV chip creates a unique transaction code for that particular transaction.
This part provides instructions on how to use the ATM.
This part allows the customer to input information regarding the transaction that they would like to execute. The information provided by the customer may include the personal identification number (PIN), the type of transaction, and the amount of the transaction.
This part holds the ATM cash.
This part moves cash from the cassette to the cash tray.
This part prints the receipt for the customer.
This part connects the rest of the ATM to external power.
This part controls the communication with the processor through the internet or phone line.
This part executes the communication to the internet.
English actor Reg Varney was the first person to use the cash machine.
While there has been some debate, John Shepherd-Barron is credited with developing the first automated teller machine (ATM). He developed the automated cash dispenser out of frustration of not being able to cash his checks after the banks closed. John got the idea from chocolate vending machines. He worked with banknote manufacturer De La Rue to create the first six automated cash dispenser machines. They would later create an additional 50 automated teller machines.
The automated cash dispenser machines had similar features to cash machines that we use today. This includes a PIN to verify an individual’s identity. Mr. Barron originally designed the cash dispenser to operate using a six-digit personal identification number. He would later reduce the PIN to four digits because his wife felt it would be easier to remember. The original use of the automated teller machine was to dispense money. The original machine cash dispenser machines were never patented by John or De La Rue. John felt a patent would disclose to criminals how the machines worked.
The first automated teller machine used carbon 14 impregnated checks instead of plastic cards to initiate the transaction. Carbon 14 is a substance that is mildly radioactive. To start the transaction, a unique personal check was inserted into an automated cash dispenser. The machine would then detect the check and match it to an individual’s PIN. If everything matched, your money would be dispensed. The automated teller machine could dispense a maximum of GBP10 per transaction.
The first automated teller machines began to gain popularity in the late 1960s and the 1970s. This popularity continued to grow every year since. This led to vast improvements in physical design, features, and security. There are currently over 3.5 million automated cash machines worldwide.
Enfield, North London.
Chemical Bank
The first ATM had a large steel body and an overall clunky design. It had slots to accept checks and to dispense money. It had a very basic and functional look.
The first ATM worked by inserting a unique carbon 14 infused check into the machine to start the transaction. The ATM would then verify the check against the customer’s PIN before dispensing the money. The ATM could only dispense money.
The biggest advantage of ATM machines is that they allow access to cash at any time. In addition to having a limited amount of time to obtain cash, there was only one way of accessing it before 1967, through visiting the nearest bank.
ATM Link is a low cost provider of ATM transaction processing, products and services. Since 1999, we have been providing comprehensive ATM solutions nationwide – turnkey operations, cash services, ATMs, parts, paper rolls, signs and much more.
KAL is a world-leading provider of multivendor ATM platform, application and management software, specializing in solutions for bank ATMs, self-service kiosks, and bank branch networks.
Auriga is a top international software solutions company, specialized in end-to-end systems that integrate the various delivery channels used in retail and internet banking.
Vita Lansworth, an entity of Lansworth Enterprise Solutions, is an Authorized Distributor and Reseller for CIMA Teller Cash Recyclers, CPI’s CLS Coin Recycler and Coin Dispenser, as well as a Entrust Datacard’s Financial Instant Issuance solution.
Perativ is a market leader for cash distribution network and cash optimization solutions for retail banks.
There are bank ATMs in almost all developed and developing countries and these machines are used as a very convenient tool. One of the advantages of these devices is saving time, which can be used at any time and place. Of course, it also depends on the way of managing the banking systems and working honor.
source:corporatefinanceinstitute , paytm , history-computer , way2benefits , wikipedia , atmmarketplace
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