ATM Machines: History, Security, and Features

ATM machines have a rich history that dates back to the 1960s. The first ATM was introduced in 1967 by John Shepherd-Barron, a Scottish engineer.

The first ATM was called the De La Rue Automated Cash System, and it was installed at a Barclays Bank in London. It was a mechanical machine that dispensed cash when a customer inserted a card and entered a code.

ATM machines have come a long way since their introduction, with modern machines offering a range of features and security measures. These include encryption, firewalls, and intrusion detection systems.

Security is a top priority for ATM machines, with many banks and financial institutions implementing advanced security measures to protect customers' sensitive information.

The concept of out-of-hours cash distribution was first put into practice in Japan, the United Kingdom, and Sweden.

In 1960, Armenian-American inventor Luther Simjian invented an automated deposit machine, called Bankograph, which accepted coins, cash, and cheques, but did not have cash dispensing features.

The first experimental Bankograph was installed in New York City in 1961, but was removed after six months due to a lack of customer acceptance.

Adrian Ashfield invented the idea of a card system to securely identify a user and control and monitor the dispensing of goods or services in 1962.

A Japanese device called the "Computer Loan Machine" supplied cash as a three-month loan at 5% p.a. after inserting a credit card in 1966.

The first ATM appeared at a branch of Barclays Bank in London in 1967, though there are reports of a cash dispenser in use in Japan in the mid-1960s.

Donald Wetzel pioneered the ATM in the U.S. in 1968, after looking firsthand at the experiences in Europe.

Here are the key players involved in the early development of ATMs:

Chemical Bank installed a prototype ATM in the U.S. at its branch in Rockville Centre, New York on 2 September 1969.

You can find ATMs at a wide range of locations, including bank branches, grocery stores, convenience stores, shopping malls, restaurants, and bars.

Most ATMs connect electronically with your bank account via the internet or phone line, allowing you to access your money from anywhere.

To use an ATM, you'll typically insert your debit card, ATM card, or credit card into a slot on the machine.

You'll be asked to enter a PIN on the ATM's keypad or touchscreen, usually four to six numbers.

The screen will then prompt you to choose which type of transaction you want to perform, such as withdrawing cash or checking your balance.

If you're withdrawing or depositing money, you'll be asked to enter the dollar amount.

Some ATMs will dispense cash and a paper receipt, while others may let you receive a receipt electronically, such as by email.

By law, you must be given the option to obtain an ATM receipt for any transaction over $15.

ATMs have various security systems in place to prevent unauthorized access and ensure the integrity of transactions.

Security cameras are a common feature, with most ATMs being equipped with at least one security camera.

The security of ATM transactions relies on the integrity of the secure cryptoprocessor, which is often a general commodity component that may not be considered a "trusted system".

Encryption of personal information is used to prevent fraud, with sensitive data in ATM transactions usually encrypted with DES, but transaction processors now require the use of Triple DES.

To ensure message integrity, Message Authentication Code (MAC) or Partial MAC may be used to verify that messages have not been tampered with while in transit between the ATM and the financial network.

ATMs have a built-in firewall to protect against hackers, which locks down the machine once malicious attempts to break in remotely have been detected.

Alarm sensors are placed inside ATMs and their servicing areas to alert operators when doors have been opened by unauthorized personnel.

Mechanical shutters cover openings on the customer side of ATMs to prevent tampering with the mechanisms when they are not in use.

Rules dictate what happens when integrity systems fail, and these rules are usually set by the government or ATM operating body.

Depending on the jurisdiction, a bank may or may not be liable when a customer's money gets outside of the ATM's vault or is exposed in a non-secure fashion during a failed transaction.

Customers often find it difficult to recover money lost in this way, and this difficulty is often complicated by policies regarding suspicious activities typical of the criminal element.

Data security is a top priority when it comes to ATMs. Most ATMs use general commodity components that are not considered "trusted systems" to perform transactions.

Encryption of personal information is used to prevent fraud, with sensitive data encrypted using DES, but transaction processors now usually require the use of Triple DES. This ensures that even if hackers try to intercept sensitive information, it will be unreadable to them.

ATMs often use Remote Key Loading techniques to ensure the secrecy of the initialisation of the encryption keys in the ATM. This adds an extra layer of security to prevent unauthorized access to sensitive information.

Message Authentication Code (MAC) or Partial MAC is also used to ensure messages have not been tampered with while in transit between the ATM and the financial network. This prevents hackers from intercepting and modifying sensitive information.

In addition to encryption, ATMs also have a built-in firewall to protect against hackers. The firewall locks down the machine once it has detected malicious attempts to break into the machine remotely.

To protect against skimming devices, some ATMs are equipped with cheaper mass-produced equipment that detects the presence of foreign objects on the front of ATMs. These devices have shown a 99% detection success rate in tests.

You can withdraw cash from an ATM using your debit card, but be aware that some third-party ATMs may charge a fee, even if your card doesn't.

ATMs typically connect directly to their host or ATM Controller on either ADSL or dial-up modem over a telephone line or directly on a leased line.

To complete a transaction, choose the type of transaction you're making, such as deposit or withdrawal, and select your account to follow the on-screen prompts.

You may be able to deposit cash or checks via an ATM, but be sure to endorse the back of any checks and note "For Deposit Only" to be safer.

Some common banking transactions that are often carried out at an ATM include withdrawals, deposits, and transferring funds between accounts.

Here are some general instructions for withdrawing money from an ATM:

Note that some interbank networks have expanded the definition of an ATM to include terminals that utilize the vault or cash drawer within the merchant establishment.

ATM fees can be a significant concern, especially when using out-of-network ATMs. The average total fees to withdraw cash from an out-of-network ATM was $4.55 in 2022, according to MoneyRates.com.

Using an ATM that's not owned by your bank, or one that's not in your bank's network, may result in fees imposed by both your bank and the bank that owns the ATM, with a combined average fee of $4.73 as of 2023.

Some banks will reimburse their customers for the fee, especially if there is no corresponding ATM available in the area. However, ATM fees can add up for users who make withdrawals regularly, with weekly withdrawals at an ATM that charges $4 and is not from your bank resulting in more than $200 a year in ATM fees.

Daily cash withdrawal limits for ATMs generally range from $300 to $5,000 a day, but these limits vary by financial institution, type of account, and relationship with the bank or credit union.

Most banks impose limits on the amount of funds you can withdraw at an ATM each day, typically ranging from $300 to $5,000 or more, as a security measure to curb fraud and protect your account.

The daily withdrawal limit can vary based on your bank and account status, with some banks allowing up to $1,500 per day, depending on your account type.

You may be able to get around these limits by calling your bank to request permission or upgrading your banking status by depositing more funds.

Some banks, like Citibank, offer higher limits for certain account types, allowing up to $1,500 per day.

It's worth noting that ATM withdrawal limits are in place to manage cash movement and prevent the machine from running out of cash.

Here are some common daily withdrawal limits for ATMs:

Keep in mind that these limits can change, and it's always a good idea to check with your bank for specific information about your account's withdrawal limits.

ATM fees can be a real pain, especially if you're not careful. The average combined fee for using an out-of-network ATM is a record high of $4.73.

Using ATMs outside of your bank's network can result in two fees: one from your bank and another from the ATM operator. These fees can range from $3 to $7.

Some banks will reimburse you for ATM fees, especially if you're a loyal customer. However, this is not always the case.

If you're a frequent ATM user, the fees can add up quickly. For example, making weekly withdrawals at an ATM that charges $4 can cost you over $200 a year.

Using ATMs in other countries can also come with hefty fees, usually ranging from 1% to 3% of the transaction amount.

An ATM typically contains the same basic parts, including a card reader, keypad, cash dispenser, printer, and screen. These parts work together to facilitate transactions and provide users with a record of their activity.

The design of each ATM may vary, but all include a card reader to identify the customer, a keypad for inputting information, and a cash dispenser to dispense bills. The keypad is used to input the type of transaction required and the amount of the transaction.

The ATM's hardware is made up of devices such as a CPU, magnetic or chip card reader, and display. These devices work together to control the user interface and transaction devices. The CPU is responsible for controlling the user interface and transaction devices, while the magnetic or chip card reader identifies the customer.

Here are the basic parts of an ATM:

ATMs often have a vault to store valuable items, which can include a dispensing mechanism, deposit mechanism, security sensors, locks, and journaling systems. The vault is typically attached to the floor to prevent theft.

In recent years, advancements in technology have led to the development of more sophisticated designs.

The integration of artificial intelligence (AI) has enabled systems to learn from user behavior and adapt to their needs.

This has resulted in more personalized user experiences, with features such as predictive text and image recognition.

For example, the ability to recognize and respond to voice commands has improved significantly, allowing for more seamless interactions.

The use of machine learning algorithms has also enabled systems to anticipate and prevent potential errors.

This has led to increased efficiency and reduced downtime, making systems more reliable and effective.

The development of more advanced materials has also enabled the creation of sleeker and more durable designs.

These advancements have not only improved the functionality of systems but also enhanced their overall aesthetic appeal.

An ATM's design may vary, but most contain the same basic parts. These include a card reader, keypad, cash dispenser, printer, and screen.

The card reader is used to read the chip on the front of your card or the magnetic stripe on the back. The keypad allows you to input your personal identification number (PIN) and select the type of transaction.

Cash is dispensed through a slot in the machine, which is connected to a safe at the bottom of the machine. The printer can be used to print receipts that record the transaction details.

The screen displays prompts that guide you through the transaction process and show information about your accounts and balances. Full-service machines often have slots for depositing paper checks or cash.

Here are the basic parts of an ATM:

The software used in design and development is crucial for bringing ideas to life.

Many designers and developers rely on graphic design software such as Adobe Creative Cloud to create visual elements.

The user interface (UI) of an application is often designed with software like Sketch or Figma.

These tools allow designers to create and test prototypes quickly.

The code behind a website or application is written in programming languages like HTML, CSS, and JavaScript.

These languages are used to build the structure, layout, and interactivity of a website or application.

Physical security of ATMs has been a major concern, with thieves attempting to steal entire machines by ram-raiding.

Criminals in Japan improved this method by using a truck loaded with heavy construction machinery to demolish or uproot ATMs and their housing.

Another attack method is plofkraak, where thieves seal all openings of the ATM with silicone and fill the vault with a combustible gas or place an explosive inside, attached, or near the machine.

This type of attack began in the Netherlands, but as the number of machines decreased and cash use was discouraged, the gangs moved to other countries like Belgium, France, Denmark, Germany, Australia, and the UK.

Despite anti-gas explosion prevention devices and reinforced ATMs being installed, thieves began using leaf blowers to remove smoke, and more powerful solid explosives.

In Germany, banks spent over €300 million on additional security, but the Federal Criminal Police Office estimated that as of 2024, 60% of ATM attacks in the country succeeded.

In the UK, some thieves dug concealed tunnels under the ATM and cut through the reinforced base to remove the money.

Modern ATM physical security focuses on denying the use of the money inside the machine to a thief, using Intelligent Banknote Neutralisation Systems.

To prevent staff from being robbed while filling the machine, the schedule for filling them is kept secret, varying and random.

ATMs can be found in a wide range of locations, including banks, shopping centers, airports, and gas stations.

On-premises ATMs are typically more advanced and expensive, while off-premises machines are simpler and cheaper.

Independent ATM deployers install and maintain white-label ATMs that are not affiliated with banks.

In the US, Canada, and some Gulf countries, banks may have drive-thru lanes providing access to ATMs using an automobile.

The world's highest ATM is located at the Khunjerab Pass in Pakistan, installed at an elevation of 4,693 metres (15,397 ft) by the National Bank of Pakistan.

There are different types of ATMs, each with its own set of features.

The complex machines can accept deposits, facilitate line of credit payments and transfers, and access account information.

You often need to be an accountholder at the bank that operates the machine to access the advanced features of the complex units.

Some ATMs now allow you to buy and sell Bitcoin and other crypto tokens via Bitcoin ATMs.

There are over 28,000 Bitcoin ATMs located around the world.

Contactless ATMs have a distinct symbol, a collection of four curved lines resembling a wave or a sideways Wi-Fi symbol. This symbol indicates that the ATM is equipped for contactless transactions.

To perform a contactless transaction, both your card and the ATM must display the contactless symbol. You can then tap the symbol or hold your card close to it.

Cardless ATMs use different technology, such as verification codes or fingerprints, to connect a mobile app on your phone to the ATM. This allows you to transact business without swiping or inserting your card.

ATMs are super important for teens and young adults because they allow you to access money at a moment's notice. This is especially convenient if you need cash for something like buying something from a cash-only booth at the farmer's market or taking a cash-only taxi home from a concert.

ATMs also give you the flexibility to see your bank account balance, which is a great way to keep track of your finances. They even let you transfer funds between accounts, deposit cash and checks, and use your debit card at any ATM with a Mastercard, Visa Interlink, or Maestro name or logo.

Using ATMs can be a lifesaver in emergency situations, and they're also super convenient for everyday purchases.