ATM

Banking Terms -> ATM

• An automated teller machine or ATM is a computerized device which serves bank clients by providing access to financial transactions (e.g. money withdrawals). This is done without a bank teller, clerk, or cashier. With ATMs, clients access their bank accounts and can check their account balance, make cash advance or cash withdrawal, or buy prepaid phone credit. An additional benefit is that you can withdraw money in another currency, which is converted at the daily exchange rate. In fact, automated teller machines offer the best possible rate in many cases.
  
  Two main types of ATMs are available. The more basic unit allows clients to withdraw cash from their accounts and obtain reports of their account balances. The more complex type gives access to account information, enables credit card payments, accepts deposits, and more. In order to use these features, you have to be a client of the financial institution which owns the machine.
  
  Automated teller machines are found around cities and towns, at gas stations, and in other locations. These are travel centers, malls, convenience stores, supermarkets, airports, etc. They give bank clients easy and convenient access to their accounts. Any persons with a credit or debit card can withdraw money, make a deposit, or use another feature offered by ATMs. You are normally not charged if you use an ATM, owned by your financial institution. However, you may have to pay a fee if you access cash through a machine operated by a competing bank.
  
  The prototype of today’s ATMs was presented by Luther Simjian who patented it in 1939. Some experts, however, claim that the Scotsman James Goodfellow was the first to patent an automated teller machine in 1966. An ATM was installed by John Shepherd-Barron at Barclays in London in 1967. It was only in the mid 80s when automated teller machines became part of mainstream banking in various parts of the world.
  
  How can you use an ATM? You insert your debit or credit card into the ATM’s card reader and respond to several prompts on the screen. If you entered your PIN correctly, you will get cash and a receipt. An alternative to your ATM card is the check card. You can use it to make purchases at bookstores, grocery stores, ticket counters, discount superstores, and pharmacies. Other places are restaurants, e-tailers, and hotels.
  
  If you prefer to use an ATM, you may wonder how it works. The unit is equipped with an electronic eye, which serves to count bills exiting through the dispenser. All the information pertaining to a particular financial transaction (including the bill count) is recorded in a journal. Machine owners print out this information periodically and keep it for 2 years. If a card holder disputes certain transaction, they can request a printout which shows the transaction. The next step is to get in touch with the host processor. If a printout cannot be provided on a short notice, the client has to notify the financial institution, which issued the card. A form is filled out to be faxed to the host processor who is responsible for resolving the dispute.
  
  Apart from the electronic eye, the cash-dispensing mechanism is equipped with a sensor which checks bills’ thickness. If two or more bills get stuck together, they will not be dispensed but will go to a reject bin. This also happens if some bill is folded, torn, or warn. The ATM records the number of bills diverted to the reject bin so that the owner of the machine is informed of the quality of bills in the unit. If the reject rate is high, this may indicate a problem with the dispenser or the bills.

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