C:\Documents And Settings\Schavan\My Documents\Euronet Training\Final\Intro To At Ms

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Global Development Team (GDT)A Center of Excellence

Presentation Title

Lesson 1: Introduction to ATMs

Approx. Time Duration: 15 minutes

GDT – Center of Excellence© Euronet Worldwide. All Rights Reserved. 1

Introduction to ATMs

Whenever you saw an ATM, or used one, did you ever wonder...

How does this little machine hand out money when it's not attached to a bank?

Is there a cash box in the middle?

Or does the money flow from a large room full of cash?

And who gets to fill these machines?


Over the next few screens, we will find out the answers to all these questions and more…

This lesson will introduce you to:

• What is an ATM?

• How does an ATM work?

• Components of an ATM

• Software for an ATM

• Types of ATMs

• Alternate Uses of ATM

Introduction to ATMs


What is an ATM?

An Automated Teller Machine (ATM) is a device that provides the clients of a financial institution with access to financial transactions without the need for a cashier or bank teller.

An ATM can dispense cash, take deposits, transfer money between bank accounts and provide many other basic financial services.


What is an ATM?

ATMs are known by various other names including:

- automated transaction machine - automated banking machine - cashpoint (in Britain) - money machine - bank machine - cash machine - hole-in-the-wall - Bancomat (in various countries in Europe and Russia) - Multibanco (after a registered trade mark, in Portugal), and Any Time Money (in India).


How an ATM Works

ATMs are activated by inserting a cash or credit card that contains the user's account number, card number on a magnetic stripe and some security information such as an expiry date or Card Verification (CVC).

Authentication is provided by the customer entering a personal identification number (PIN).

http://upload.wikimedia.org/wikipedia/commons/8/83/ATM_pinpad_in_german.jpg


How an ATM Works

1. Customer swipes Debit/ATM/Credit card through machine.

2. The ATM connects to the secure host network/ATM Controller via telephone modem.

3. The ATM Controller network contacts appropriate banking network to verify funding for the transaction.

4. The secure host network approves the transaction and cash is dispensed from the ATM to the customer.

Let us view the brief steps for a typical ATM transaction.


The ATM Network

Some features of the ATM Network are as follows:

• ATMs typically connect directly to their ATM Controller server / EFTPOS Switch via either a dial-up modem over a telephone line or directly via a leased line.

• Common lower-level layer communication protocols used by ATMs to communicate back to the bank include SNA over SDLC, 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.

• 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.

http://en.wikipedia.org/wiki/ISO_8583


Components of an ATM

This is the top half of the ATM consisting of the following components:



The Card Reader captures the account information stored on the magnetic strip on the back of the ATM/debit card or credit card.

The host processor uses this information to route the transaction to the cardholder's bank.



The Keypad lets the cardholder tell the bank what kind of transaction is required and for what amount. Also, the bank requires the cardholder's personal identification number (PIN) for verification.



The Display screen prompts the cardholder through each step of the transaction process.

Leased-line machines commonly use a monochrome or color CRT (cathode ray tube) display. Dial-up machines commonly use a monochrome or color LCD.



The Receipt Printer provides the cardholder with paper receipt of the transaction.



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)



The heart of an ATM is the safe and cash dispensing mechanism or Vault. The entire bottom portion of most small ATMs is a safe that contains the cash.


Mechanisms found inside the Vault may include:

• Currency Boxes or Cassettes that stores cash

• 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.



During cash dispensing Rubber rollers move one bill/note at a time from the currency box to the dispenser area.

A sensor determines if two or more bills are stuck together, or if the wrong denomination was pulled and causes them to be inserted into the reject box.


Click here to view a video on “How ATMs Work”

http://videos.howstuffworks.com/howstuffworks/3-how-atms-work-video.htm


Software for an ATM

Software

Front-End

• OS2, Linux, Unix, MS Windows

• Firmware (coded in C++/Java)

Back-End

DBMS - Oracle, MS SQL Server etc (Distributed databases situated at the bank's sites)


Types of ATMs

Next, let us take a look at the different types of ATMs currently available in the market!


Types of ATMs

On Site ATM – ATM is at the bank location


Types of ATMs

Off Site ATM – ATM is away from the bank location


Types of ATMs

Mobile ATM – This is portable ATM that can be used at different locations like local festivals, concerts, sports events etc.


Types of ATMs

Biometric ATM- These ATMs use finger print of the card holder or his eye retina scan etc for authentication


Types of ATMs

ATMs for the Blind - These ATMS have Braille-enabled function keys and guide labels for other functionalities. They also have voice control features and voice guidance for ease of transaction.


Types of ATMs

Drive-in ATMS – These ATMs enable customers to withdraw cash without leaving their vehicles.


Managing of ATMs

Managing ATMs involves a wide range of services that are provided to banks by various specialist companies.

Apart from deployment of the ATM, there exist services such as:- Installation and maintenance of support devices like generators and UPS

- Installation and configuration of networks and switches, VSAT devices for ATM-Bank-ATM, or other types of communications establishing and managing data centers

- Installation and maintenance of support devices like generators and UPS

- Cash forecasting

- Reconciliation

- Transaction Processing

- Managed Services


Manufacturers and ISOs

Some ATM Manufacturers are:

Some Independent Service Organizations (ISO) are:

These services are usually provided by ATM Manufacturers or Independent Sales Organization / Service Provider (ISO).

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http://www.diebold.com/brandmanual/logos/InnovationDelivered_Blue.jpg

http://www.wmszki.hu/honlap/sites/default/files/wincor_nixdorf_logo.png

http://images.google.co.in/imgres?imgurl=http://www.maximumpc.com/files/u46168/fujitsu-redps.jpg&imgrefurl=http://www.maximumpc.com/tags/takeover&usg=__h675UmqhMR-k_31W4vjrxcVQ9ng=&h=310&w=619&sz=17&hl=en&start=2&um=1&tbnid=EG6ptPUCX2oSsM:&tbnh=68&tbnw=136&prev=/images%3Fq%3DFujitsu%26hl%3Den%26rlz%3D1R2ADFA_enIN337%26um%3D1


Other Uses of an ATM

• Deposit currency recognition, acceptance, and recycling

• Paying routine bills, fees, and taxes

• Printing bank statements

• Updating passbooks

• Loading monetary value into stored value cards

Purchasing:

• Postage stamps

• Lottery tickets • Train tickets

• Concert tickets • Movie tickets • Gift certificates

• Games and promotional features

• Donating to charities

• Cheque Processing Module

• Adding pre-paid cell phone credit

•Targeted Advertising

•Loan Processing

Although ATMs were originally developed as just cash dispensers, they have evolved to include many other bank-related functions such as:


Summary

Thank you for completing the lesson Introduction to ATMs!

In this lesson you have learnt about:• How an ATM provides customers access to financial transactions

• Components of an ATM and their functions

• How an ATM machine works

• Front-end and Back-end software used by an ATM

• Types of ATM machines

• Managing of ATMs

• Uses of an ATM

For feedback or suggestions, please email [email protected]

C:\Documents And Settings\Schavan\My Documents\Euronet Training\Final\Intro To At Ms

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