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Automated Teller Machine
History
HistoryAn old Nixdorf ATM
The idea of self-service in retail banking developed through independent and simultaneous efforts in Japan, Sweden, the United States and the United Kingdom. In the USA, Luther George Simjian has been wrongly credited with developing and building the first cash dispenser machine . There is no evidence to suggest that Simjian worked in this device before 1959 while his 132nd patent (US3079603) was first filled in June 30, 1960 (and granted 26 February 1963). The roll out of this machine, called Bankograph, was delayed a couple of years. This was partially due to Simjian's Reflectone Electronics Inc. being acquired by Universal Match Corporation . An experimental Bankograph was installed in New York City in 1961 by the City Bank of New York, but removed after 6 months due to the lack of customer acceptance. The Bankograph was an automated envelope deposit machine (accepting coins, cash and cheques) and it did not have cash dispensing features. The Bankograph, however, embodied the preoccupation by US banks in finding alternative means to capture core deposits, while the concern of European and Asian banks was cash distribution.
A first cash dispensing device was used in Tokyo in 1966 . Although little is known of this first device, it seems to have been activated with a credit card rather than accessing current account balances. This technology had no immediate consequence in the international market.
In simultaneous and independent efforts, engineers in Sweden and Britain developed their own cash machines during the early 1960s. The first of these that was put into use by Barclays Bank in Enfield Town in North London, United Kingdom, on 27 June 1967. This machine was the first in the UK and was used by veteran English comedy actor Reg Varney, at the time so as to ensure maximum publicity for the machines that were to become mainstream in the UK. This instance of the invention has been credited to John Shepherd-Barron, while disregarding other engineers at De La Rue Instruments who contributed to the design and development of that machine. Nevertheless, Shepherd-Barron was awarded an OBE in the 2005 New Year's Honours List.
The Barlcays-De La Rue machine (called De La Rue Automatic Cash System or DACS) beat the Swedish saving banks and a company called Metior's (a device called Bankomat) by nine days and Westminster Bank- Smith Industries- Chubb system (called Chubb MD2) by a month. The collaboration of a small start-up called Speytec and Midland Bank developed a third machine which was marketed after 1969 in Europe and the USA by the Burroughs Corporation. The patent for this device (GB1329964) was filed on September 1969 (and granted in 1973) by John David Edwards, Leonard Perkins, John Henry Donald, Peter Lee Chappell, Sean Benjamin Newcombe & Malcom David Roe.
Both the DACS and MD2 accepted only a single-use token or voucher which was retained by the machine while the Speytec worked with a card with a magnetic stripe at the back. Hence all this these worked on various principles including Carbon-14 and low-coercivity magnetism in order to make fraud more difficult. The idea of a PIN stored on the card was developed by a British engineer working in the MD2 named James Goodfellow in 1965 (patent GB1197183 filed on 2 May 2 1966 with Anthony Davies). The essence of this system was that is it enabled the verification of the customer with the debited account without human intervention. This patent is also the earliest instance of a complete urrency dispenser system in the patent record. This patent was filled on 5 March 1968 in the USA (US 3543904) and granted on 1 December 1970. It had a profound influence on the industry as a whole. Not only did future entrants into the cash dispenser market as both NCR Corporation and IBM licence Goodfellow PIN system, but a number of later patents references this patent as rior Art Device .
After looking first hand at the experiences in Europe, in 1968 the networked ATM was pioneered in Dallas, Texas, by Donald Wetzel who was a department head at an automated baggage-handling company called Docutel. In 1995, the Smithsonian's National Museum of American History recognised Docutel and Wetzel as the inventors of the networked ATM.
ATMs first came into use in December 1972 in the UK; the IBM 2984 was designed at the request of Lloyds Bank. The 2984 CIT (Cash Issuing Terminal) was the first true Cashpoint, similar in function to today's machines; Cashpoint is still a registered trademark of Lloyds TSB in the UK. All were online and issued a variable amount which was immediately deducted from the account. A small number of 2984s were supplied to a US bank. Notable historical models of ATMs include the IBM 3624 and 473x series, Diebold 10xx and TABS 9000 series, and NCR 50xx series.
Location
An ATM Encrypting PIN Pad (EPP) with German markings
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 branch's 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".
In North America, banks often have drive-thru lanes providing access to ATMs.
Many ATMs have a sign above them indicating the name of the bank or organization owning the ATM, and possibly including the list of ATM networks to which that machine is connected. This type of sign is called a topper.
Financial networks
An ATM in the Netherlands. The logos of a number of interbank networks this ATM is connected to are shown.
Most ATMs are connected to interbank networks, enabling people to withdraw and deposit money from machines not belonging to the bank where they have their account or in the country where their accounts are held (enabling cash withdrawals in local currency). Some examples of interbank networks include PULSE, PLUS, Cirrus, Interac, Interswitch, STAR, and LINK.
ATMs rely on authorization of a financial transaction by the card issuer or other authorizing institution via the communications network. This is often performed through an ISO 8583 messaging system.
Many banks charge ATM usage fees. In some cases, these fees are charged solely to users who are not customers of the bank where the ATM is installed; in other cases, they apply to all users. Where machines make a charge some people will not use them, but go to a system without fees.
In order to allow a more diverse range of devices to attach to their networks, some interbank networks have passed rules expanding the definition of an ATM to be a terminal that either has the vault within its footprint or utilizes the vault or cash drawer within the merchant establishment, which allows for the use of a scrip cash dispenser.
A Diebold 1063ix with a dial-up modem visible at the base
ATMs typically connect directly to their host or ATM Controller via either ADSL or dial-up modem over a telephone line or directly via a leased line. Leased lines are preferable to POTS lines because they require less time to establish a connection. Leased lines may be comparatively expensive to operate versus a POTS line, meaning less-trafficked machines will usually rely on a dial-up modem. That dilemma may be solved as high-speed Internet VPN connections become more ubiquitous. Common lower-level layer communication protocols used by ATMs to communicate back to the bank include SNA over SDLC, TC500 over Async, X.25, and TCP/IP over Ethernet.
In addition to methods employed for transaction security and secrecy, all communications traffic between the ATM and the Transaction Processor may also be encrypted via methods such as SSL.
Global use
There are no hard international or government-compiled numbers totaling the complete number of ATMs in use worldwide. Estimates developed by ATMIA place the number of ATMs in use at over 1.5 million as of August 2006[update].
For the purpose of analyzing ATM 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 ATMs per million people. and generally slowing growth rates. Despite the large number of ATMs,there is additional demand for machines in the Asia/Pacific area as well as in Latin America. ATMs have yet to reach high numbers in the Near East/Africa.
The world's most northerly installed ATM is located at Longyearbyen, Svalbard, Norway.
The world's most southerly installed ATM is located at McMurdo Station, Antarctica.
While India claims to have the world's highest installed ATM at Nathu La Pass, India installed by the Union Bank of India at 4310 meters, there are higher ATMs installed in Nagchu County, Tibet at 4500 meters by Agricultural Bank of China..
While ATMs are ubiquitous on modern cruise ships, ATMs can also be found on some US Navy ships.
In the United Kingdom, an ATM may be colloquially referred to as a "Cashpoint", named after the Lloyds Bank ATM brand, or "hole-in-the-wall", after which the equivalent Barclays brand was later named. In Scotland the term Cashline has become a generic term for an ATM, based on the branding from the Royal Bank of Scotland.
In the Republic of Ireland, ATMs are also commonly referred to as a "Banklink", named after the Allied Irish Bank brand of machines.
Hardware
A block diagram of an ATM
An ATM is the typically made up of the following devices:
CPU (to control the user interface and transaction devices)
Magnetic and/or Chip card reader (to identify the customer)
PIN Pad (similar in layout to a Touch tone or Calculator keypad), often manufactured as part of a secure enclosure.
Secure cryptoprocessor, generally within a secure enclosure.
Display (used by the customer for performing the transaction)
Function key buttons (usually close to the display) or a Touchscreen (used to select the various aspects of the transaction)
Record Printer (to provide the customer with a record of their transaction)
Vault (to store the parts of the machinery requiring restricted access)
Housing (for aesthetics and to attach signage to)
Recently, due to heavier computing demands and the falling price of computer-like architectures, ATMs have moved away from custom hardware architectures using microcontrollers and/or application-specific integrated circuits to adopting the hardware architecture of a personal computer, such as, USB connections for peripherals, ethernet and IP communications, and use personal computer operating systems. Although it is undoubtedly cheaper to use commercial off-the-shelf hardware, it does make ATMs potentially vulnerable to the same sort of problems exhibited by conventional computers.
Business owners often lease ATM terminals from ATM service providers.
Two Loomis employees refilling an ATM at the Downtown Seattle REI.
The vault of an ATM is within the footprint of the device itself and is where items of value are kept. Scrip cash dispensers do not incorporate a vault.
Mechanisms found inside the vault may include:
Dispensing mechanism (to provide cash or other items of value)
Deposit mechanism including a Cheque Processing Module and Bulk Note Acceptor (to allow the customer to make deposits)
Security sensors (Magnetic, Thermal, Seismic, gas)
Locks: (to ensure controlled access to the contents of the vault)
Journaling systems; many are electronic (a sealed flash memory device based on proprietary standards) or a solid-state device (an actual printer) which accrues all records of activity including access timestamps, number of bills dispensed, etc. - This is considered sensitive data and is secured in similar fashion to the cash as it is a similar liability.
ATM vaults are supplied by manufacturers in several grades. Factors influencing vault grade selection include cost, weight, regulatory requirements, ATM type, operator risk avoidance practices, and internal volume requirements. Industry standard vault configurations include Underwriters Laboratories UL-291 "Business Hours" and Level 1 Safes, RAL TL-30 derivatives, and CEN EN 1143-1:2005 - CEN III/VdS and CEN IV/LGAI/VdS.
ATM manufacturers recommend that vaults be attached to the floor to prevent theft.
Software
A Suncorp Metway ATM running OS/2
With the migration to commodity PC hardware, standard commercial "off-the-shelf" operating systems and programming environments can be used inside of ATMs. Typical platforms previously used in ATM development include RMX or OS/2. Today the vast majority of ATMs worldwide use a Microsoft OS, primarily Windows XP Professional or Windows XP Embedded. A small number of deployments may still be running older versions such as Windows NT, Windows CE or Windows 2000. Notably, Vista was not widely adopted in ATMs.[citation needed]
A Wincor Nixdorf ATM running Windows 2000
Linux is also finding some reception in the ATM marketplace. An example of this is Banrisul, the largest bank in the south of Brazil, which has replaced the MS-DOS operating systems in its ATMs with Linux. Banco do Brasil is also migrating ATMs to Linux.
Common application layer transaction protocols, such as Diebold 91x (911 or 912) and NCR NDC or NDC+ provide emulation of older generations of hardware on newer platforms with incremental extensions made over time to address new capabilities, although companies like NCR continuously improve these protocols issuing newer versions (eg. NCR's AANDC v3.x.y, where x.y are subversions). Most major ATM manufacturers provide software packages that implement these protocols. Newer protocols such as IFX have yet to find wide acceptance by transaction processors.
With the move to a more standardized software base, financial institutions have been increasingly interested in the ability to pick and choose the application programs that drive their equipment. WOSA/XFS, now known as CEN XFS (or simply XFS), provides a common API for accessing and manipulating the various devices of an ATM. J/XFS is a Java implementation of the CEN XFS API.
While the perceived benefit of XFS is similar to the Java's "Write once, run anywhere" mantra, often different ATM hardware vendors have different interpretations of the XFS standard. The result of these differences in interpretation means that ATM applications typically use a middleware to even out the differences between various platforms.
With the onset of Windows operating systems and XFS on ATM's, the software applications have the ability to become more intelligent. This has created a new breed of ATM applications commonly referred to as programmable applications. These types of applications allows for an entirely new host of applications in which the ATM terminal can do more than only communicate with the ATM switch. It is now empowered to connected to other content servers and video banking systems.
Notable ATM software that operates on XFS platforms include Triton PRISM, Diebold Agilis EmPower, NCR APTRA Edge, CR2 BankWorld, KAL Kalignite, Phoenix Interactive VISTAatm, and Wincor Nixdorf ProTopas.
With the move of ATMs to industry-standard computing environments, concern has risen about the integrity of the ATM's software stack.
Security
A Triton brand ATM with a dip style card reader and a triple DES keypad
Security, as it relates to ATMs, has several dimensions. ATMs also provide a practical demonstration of a number of security systems and concepts operating together and how various security concerns are dealt with.
Physical
A Wincor Nixdorf Procash 2100xe Frontload that was opened with an angle grinder
Early ATM security focused on making the ATMs invulnerable to physical attack; they were effectively safes with dispenser mechanisms. A number of attacks on ATMs resulted, with thieves attempting to steal entire ATMs by ram-raiding. Since late 1990s, criminal groups operating in Japan improved ram-raiding by stealing and using a truck loaded with a heavy construction machinery to effectively demolish or uproot an entire ATM and any housing to steal its cash.
Another attack method, plofkraak, is to seal all openings of the ATM with silicone and fill the vault with a combustible gas or to place an explosive inside, attached, or near the ATM. This gas or explosive is ignited and the vault is opened or distorted by the force of the resulting explosion and the criminals can break in.
Modern ATM physical security, per other modern money-handling security, concentrates on denying the use of the money inside the machine to a thief, by means of techniques such as dye markers and smoke canisters.
A common method is to simply rob the staff filling the machine with money. To avoid this, the schedule for filling them is kept secret, varying and random. The money is often kept in cassettes, which will dye the money if incorrectly opened.
Transactional secrecy and integrity
The security of ATM transactions relies mostly on the integrity of the secure cryptoprocessor: the ATM often uses commodity components that are not considered to be "trusted systems".
Encryption of personal information, required by law in many jurisdictions, is used to prevent fraud. Sensitive data in ATM transactions are usually encrypted with DES, but transaction processors now usually require the use of Triple DES. Remote Key Loading techniques may be used to ensure the secrecy of the initialization of the encryption keys in the ATM. Message Authentication Code (MAC) or Partial MAC may also be used to ensure messages have not been tampered with while in transit between the ATM and the financial network.
Customer identity integrity
A BTMU ATM with a palm scanner (to the right of the screen)
There have also been a number of incidents of fraud by Man-in-the-middle attacks, w
by: himfr