History, Types & Scams

1. Automated Teller Machine ( ATM )
What is Automated Teller Machine?
 An electronic banking outlet, which allows customers to complete basic
transactions without the aid of a branch representative or teller.
 an electronic telecommunications device that enables the customers of a financial
institution to perform financial transactions, particularly cash withdrawal, without the
need for a human cashier, clerk or bank teller.
History of ATM
 The “world’s first” ATM landed on a high street in Enfield, a suburb of London, at
a branch of Barclays bank; there’s even a blue plaque on the outside of the
building, still a Barclays, to memorialize the cash dispenser’s June 27, 1967,
debut. The story goes that John Shepherd-Barron, an engineer at printing
company De La Rue, came up with what was essentially a cash vending
machine one Saturday afternoon after he missed his bank’s open hours.
 In 1960, Simjian managed to persuade a New York City bank to take a few of his
automatic-deposit machines. So that customers could trust that they would see
their money again, there was a microfilm camera inside the Bankograph that
took a snapshot of every deposit. Customers received a copy of the photo as
their receipt. Still, the Bankograph did not catch on. “The only people using the
machines were prostitutes and gamblers who didn’t want to deal with tellers face
to face,” Simjian explained, and there were not enough of them to make the
machines a worthwhile investment.

2. Advantages & Disadvantages of ATM
Advantages
 You don’t have to carry cash around with you.
 If your card is stolen, the thief cannot get your money without your PIN.
 You can use it to pay at some retail shops.
 Keeps your money safe.
 You can withdraw cash at any time, day or night. The banks don’t need to be
open.
 ATMs offer the convenience of multiple locations. You can withdraw cash at any
bank that is part of the system to which your ATM card is linked.
 You don’t need to fill out withdrawal and deposit slips as is required at the bank.
 ATMs are faster than going to the bank—no long lines.
 You can withdraw cash at ATMs in foreign countries.
Disadvantages
 ATM may be off-line (system down).
 You may forget your PIN number.
 Risk of robbery when you leave the ATM.
 The ATM can break down or run out of cash.
 Fees charged to use ATMs of other banks can become expensive.

3. Types of ATM and their features
 White Label ATM
White Label ATMs are those ATMs which set up, owned and operated by non-
bank entities, which have been incorporated under Companies Act 1956, and
after obtaining RBI’s approval.
Provide alternative source of cash dispensing with regard to traditional automatic
banking machines (ABMs) from banks.
 Brown Label ATM
These ATMs are owned and maintained by service provider whereas bank
whose brand is used on ATM takes care of cash management and network
connectivity.
 Online ATM
Online ATMs: These ATMs are connected to the bank’s database at all times and
provide real time transactions online. The withdrawal limits and account balances
are constantly monitored by the bank. Online ATMs are always watching out for
you.
 Offline ATM
Offline ATMs: These ATMs are not connected to bank’s database- hence they
have a predefined withdrawal limit fixed and you can withdraw that amount
irrespective of the balance in your account.
So if you did not have balance in your account, and you went to a ‘offline ATM’
and withdrew money more than the balance – you’ll still get the cash at that time,
and later on will run afoul with your bank balance! Where banks may charge
some penalty for exceeding your balance!
 Stand Alone ATM
Stand Alone ATMs are not connected with any ATM network- hence their
transactions are restricted to the ATM’s branch and link branches only.

4.  Onsite ATM
Onsite ATMs: are the ATMs you find next to your Bank’s branch. They go side-
by-side! Or in proper terms, they are the ATMs installed within a branch’s
premises.
 Offsite ATM
Off-site ATMs are the ones which are installed anywhere, but withinthe branch
premises. That is these are not installed next to branch. So where are they installed?
Shopping Malls, shopping markets, airports, hospitals, business areas etc.

5. 5 ATM Scams That Can Break the Bank
1. Every Little Thing It Does Is Magic
The most common scheme begins when a bank customer swipes his or her debit card
in the device that opens the door to the ATM vestibule typically found in a bank's inner
doorway. Because most people are unaware of precisely what this magnetic reader
should look like, criminals can place a counterfeit device that reads and copies card
numbers on the outside door without being detected by customers.
Once the customer is inside, a hidden surveillance camera records PINs as customers
enter them on the ATM keyboard. The result of this information gathering is the illegal
creation of a duplicate card that thieves quickly use to withdraw all the funds in the
connected bank accounts as quickly as possible.
Detection of this particular fraud is difficult for the average consumer as there are
several dozen manufacturers of legitimate swiping devices. Attempting to distinguish a
real one from a fake is almost impossible.
2. Don't Stand So Close to Me
Another method of trickery involves the attachment of a false façade over the ATM
machine. Though the machine looks normal, in reality the attachment will "eat" your
card and display an error message. Your PIN is usually recorded by a hidden camera,
or in some cases, by a "helpful" person standing nearby who suggests that you try to
enter your PIN again. Of course, this person is actually a criminal, and moments after
you leave, he or she will retrieve your card from the false front of the ATM and walk
away with both your card and the access code.
3. Ghosts In the Machines
Freestanding ATMs are also subject to criminal activity. These devices are located in
areas as varied as airport terminals and self-service gasoline pumps. In some
situations, criminal hackers are able to capture account information by using WiFi
scanners and cracking programs to download transaction data when the systems fail to
be protected by high-level encryption software. (Not all plastic is created equal - credit
cards offer greater protection at the pump.

6. The most audacious of ATM scams is the installation of machines whose only purpose
is to steal information. This criminal confidence scheme was once a popular activity of
organized crime circles. Seemingly normal ATMs would be placed in small shops, bars
and other venues. The machines were never actually loaded with funds, but instead
were there solely to entice users to swipe their cards and enter their PINs. After
collecting this information, an error message would appear. These seemingly innocent
devices provided criminals with a steady flow of stolen banking information. Because of
their placement in high-traffic areas, users did not realize that all users were
unsuccessful at withdrawing funds.
4. Making the Best of What's Around
An old-fashioned scam that still reaps profits for criminals is the placement of a deposit
receptacle in an ATM vestibule with a sign over the automated machine stating it is out
of order. Here, the felon's goal is to capture cash deposits that were intended for the
more secure electronic banking machine. While it may seem obvious that depositing
money in this insecure fashion is a bad idea, the comfort and trust that people have
when entering a financial institution often allows them to suspend their suspicions as
they believe that there is no safer place than a bank.
5. Demolition Men
Finally, criminals who are too impatient to go through the complex process of stealing
bank accounts and personal identification numbers will simply steal an entire ATM.
Typically, this crime occurs in the overnight hours inside a business, such as a
supermarket. The thieves will break in, use the store's forklift (which is normally used for
the benign purpose of moving cases of beer and soda) to rip the ATM off the floor and
load it onto a waiting truck. As a fully loaded ATM can hold as many as 10,000 bills, the
total amount of dollars stolen can be in the tens of thousands.