Cash and ATMs continue to evolve as new technologies emerge. ATMs were first introduced in the late 1960s and initially only offered cash withdrawals from bank accounts. Over the past 50 years, ATMs have expanded their capabilities and now offer services like deposits, transfers, and bill payments. Emerging technologies may reduce reliance on cash as digital currencies and mobile payment options grow. However, cash remains deeply ingrained in many societies and economies worldwide.

1. Cash and ATMs: The Future
Chip Wickenden
FIS Global
© 2011 NACHA — The Electronic Payments Association®. All rights reserved. No part of this material may be
used without the prior written permission of NACHA. This material is not intended to provide any warranties, legal
advice, or professional assistance of any kind.

2. Definitions
• Cash Ready Money, Money in the form of bills or coins,
Money holding a defined or stated value.
• ATM Acronym for ―Automated Teller Machine‖,
Synonym: ABM, or ―Automated Banking Machine‖.
Unattended electronic machine at a bank or other
location that allows customers to perform cash
withdrawals and basic banking activities.
2
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© 2011 NACHA — The Electronic Payments Association®. All rights reserved.

3. A Brief History of ATMs
1969 2011
Image Deposit
and Currency
National recognition
networks form, deploys
network
PIN Debit consolidation,
at the POS card brands
Shared deposit
functionality enter
Surcharge model
emerges emerges
ATMs in the bank Additional
lobby, or at the Regional ATM dispensing and
bank entrance, networks form: transactional
connected to the mutual benefit services added
bank DDA model
system
Reduce Expand Improve Enhance Non- Card Increase
teller coverage, coverage the revenue customer Associations utilization of
transaction improve and utility model fee income define value non – cash
cost customer for smaller plays dispensing
usage FI’s functions
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© 2011 NACHA — The Electronic Payments Association®. All rights reserved.

4. ATM Use in the United States
Total U.S. ATMs Total U.S. ATM Types of U.S.
1999 227,000
Transactions ATM
Billions of Trnsactions Transactions
2000 273,000
1999 10.8
2001 324,000
2000 12.8
2002 352,000 2001 13.6 18
2003 371,000 2002 10.5 %
2003
9%
2004 383,000 10.8
2004 11.0 18 55
2005 396,000 %
2005 10.5 %
2006 395,000 2006 10.1
2007 415,321 2007 14.9
2008 11.8 Withdrawls
2008 425,010
2009
Deposits
2009 2010
Balance Inquiries
2010
-4.0 1.0 6.0 11.0 16.0 Other
The Payments Institute – July 10-13, 2011 – Washington, D.C. 4
© 2011 NACHA — The Electronic Payments Association®. All rights reserved.
Sources: Creditcards.com, Wired Magazine

5. How ATMs Work
Consumer Printer
Card Reader
Journal Printer
Internal Switches
Network Interface
/ HSM Processor
Currency Cassette
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© 2011 NACHA — The Electronic Payments Association®. All rights reserved.

6. How ATMs Work
ATM Processing
Device Controller Bank Marketing
• Handles Customer System
Interaction
• Validates Cards
• Manages screens
Bank Fraud
Monitoring
Transaction Switch
• Routes Transaction Bank Core
Requests and Responses
• Fraudulent Transaction Processing
Monitoring
ATM Network
Operational Monitor Gateways
• Monitors System Health Others
• Detects Anomalies
ATM Operations
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© 2011 NACHA — The Electronic Payments Association®. All rights reserved.

7. What’s on an ATM Card
Check Card – no POS
Hologram
Embossed Card Info
Card Type
Debit Card – POS
Network Logo
Magnetic Stripe
000
CVV / CVC
Signature Block
Legal Notice
Network Bugs
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© 2011 NACHA — The Electronic Payments Association®. All rights reserved.

8. What’s on an ATM Card?
Magnetic Stripe Data
Track 1 (IATA)
*** Track 1 Layout: *** | SS | FC | PAN | Name | FS | Additional Data | ES | LRC |
– SS=Start Sentinel "%―
– FC=Format Code
– PAN=Primary Acct. # (19 digits max)
– FS=Field Separator "^"
– Name=26 alphanumeric characters max.
– Additional Data=Expiration Date, offset, encrypted PIN, etc.
– ES=End Sentinel "?"
– LRC=Longitudinal Redundancy Check
Track 2 (ABA)
*** Track 2 Layout: *** | SS | PAN | FS | Additional Data | ES | LRC |
– SS=Start Sentinel ";"
– PAN=Primary Acct. # (19 digits max)
– FS=Field Separator "=" Additional Data=Expiration Date, offset, encrypted PIN, etc.
– ES=End Sentinel "?"
– LRC=Longitudinal Redundancy Check
Track 3 (Supplemental)
*** Track 3 Layout: **
Similar to tracks 1 and 2. Almost never used. Many different data standards used.
8
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9. A Word About EMV
. . . Or “Chip and PIN” as the Brits call it . . ,
Europay / MasterCard / Visa
• Smartcard technology
replaces magnetic stripe
• PIN validation transfers
fraud liability to issuer
• Encryption algorithms
provide much higher
security levels
• Form factor not limited to
a card
9
The Payments Institute – July 10-13, 2011 – Washington, D.C.
© 2011 NACHA — The Electronic Payments Association®. All rights reserved.
Source: MasterCard Worldwide

10. Cost Components of a Typical ATM System
Cash & Consumables
1.6%
Problem Recovery 4.0% 2.4%
4.0%
Hardware 36.0%
5.0%
Channel Management
12.0%
Telecommunications Ops
35.0%
Switch & Host Ops
Application Management
Installation/MACs
10
The Payments Institute – July 10-13, 2011 – Washington, D.C.
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Source: Various

11. The Quest for Revenue - Surcharging
• In order to promote their use, banks did not charge
customers for the use of ATMs
• Once cooperative networks had been established banks
began charging foreign ATM fees
– Offset network expense
– Source of revenue
• Surcharging was restrained by mutual consent in order
to continue promote network growth
– Charging everyone else’s customers had a great deal of appeal
11
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12. Image and Mixed Deposit and ATMs
• Customer inserts check, currency or both
• Terminal reads and validates
• Displays Image of checks and amounts
• Customer option to accept or decline
• If declined all items are returned
12
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13. Leveraging the Network – POS, Kiosks, and More
• PIN Debit pioneered Point of
Sale debits as a natural
extension of the network
• Debit POS drove a reduction
in ticket size from the credit
card base, but still increased
total average ticket
• Banks are continuing to work
with in branch and stand
alone kiosks
• Branch back counter devices
such as currency
counters/recylcers also
leverage the network
13
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14. ATM Fraud
• Objective: Gather and correlate
magnetic stripe and PIN data in order
to clone the card and drain the
account
• Challenge: PIN data is stored
separately
• Technique: Camouflaged skimmers
and cameras
• Countermeasures: Transaction
monitoring software; self aware
terminals
14
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15. Brazil
• the number of ATM • Check Balances
transactions per inhabitant • Get Cash
• Make a Deposit
increased by 44.9% • Transfer Funds
between 2001 and 2007, • Account to Account Transfers
with a 12.6% increase in • Reload Prepaid Card
• Pay Bills
the number of cash • Pay Taxes
transactions per terminal • Donate to Charity
in the same period. • Buy Tickets
• Top Up Prepaid Phone
• What else are they doing?
15
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16. Garanti Bank in Turkey has a Different Remittance
Solution
Money Transfer without Bank Account
• As with all other cardless Paramatik transactions, press the
“ENTER” button and select the “Withdraw/Send Money
Transfer without Bank Account” step from the ―Cardless
Transactions” menu,
• Enter your T.C. Identity number and mobile phone number,
followed by T.C. Identity number and the mobile phone number of
the person to whom you want to send money and deposit the
amount you want to send into Paramatik.
When you deposit money, a PIN will be sent to the recipient's
mobile phone via SMS.
• The recipient will press the “ENTER” button on Paramatik and
select the “Withdraw/Send Money Transfer without Bank Account”
step from the “Cardless Transactions” menu.
• After entering his/her T.C. Identity number, date of birth, mobile
phone number, followed by the PIN sent to his/her mobile phone,
the recipient will withdraw the money sent.
16
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17. These ATMs Have Taken Money Full Circle
• Commodity Barter
• Coins
• Currency
• Notional Accounts
• Electronic
Accounting
• Digital Currency
• Non-Cash
Currency
• Dispensing
Commodities
17
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Source: Finextra.com

18. ATM Security
You just can’t make this stuff up . . .
The Payments Institute – July 10-13, 2011 – Washington, D.C. 18
© 2011 NACHA — The Electronic Payments Association®. All rights reserved.

19. ATM Security
19
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© 2011 NACHA — The Electronic Payments Association®. All rights reserved.

20. The Lifecycle of Cash
Central
Bank ATM /
Banks
Branch
Inventory & Print &
Dispense /
Deposit / Transport Destroy Mint
Accept
Withdraw
Bank Cash
Individuals Vaults
Deposit / Inventory /
Hoard Pay / Withdraw Validate
Receive
Businesses
Accept
• A developed economy may spend 0.75% of GDP maintaining cash supplies
• An emerging economy may spend up to 2% of GDP
• Translates to 1 -5% of the face value of currency annually
The Payments Institute – July 10-13, 2011 – Washington, D.C. 20
© 2011 NACHA — The Electronic Payments Association®. All rights reserved.
Source: Payment System Advisors

21. Currency in Circulation
• Brazil: 2004 – 52,019 million real; 2008 - 77%
92,379 million
• Russia: 2001 - 487,225 million Russian 876%
rubles 2010 - 4,756,155 million
• India: 38,336,000,000 banknotes in 2004 47%
to 56,549,000,000 by 2010
• China: 22,039.08 million Yuan in 2005 to
408,139.93 million Yuan by 2010 1,751%
• United States: 2000 – $568,614 billion;
2011 – $1,005,288 * (67% offshore) 77%
Percentage of the world’s transactions in cash - 85%
* Including 90,000 ten thousand dollar bills
21
The Payments Institute – July 10-13, 2011 – Washington, D.C.
© 2011 NACHA — The Electronic Payments Association®. All rights reserved.
Sources: Various central banks, Wired Magazine

22. Are We Really Winning the War on Cash ?
U.S. Payments Volume by Type
Billions of Transactions
50 1100
Cash in Circulation
40 (RH Axis)
Annual Transaction Volume
30 Checks
ACH
Debit Card
20
Credit Card
Prepaid/EBT
10
0 0
2000 2003 2006 2009
The Payments Institute – July 10-13, 2011 – Washington, D.C. 22
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23. Cash on the Balance Sheet
The Payments Institute – July 10-13, 2011 – Washington, D.C. 23
© 2011 NACHA — The Electronic Payments Association®. All rights reserved.

24. Cash Vault Operations
Typical Cash Vault Services
• Deposit processing and verification
• Teller and cash drawer audits
• Currency inventory management
• Counterfeit Detection
• ATM cash replenishment
• Check imaging and processing
• Branch order preparation and fulfillment
• Federal Reserve Services
• Coin processing and wrapping
• Commercial order prep
• Retail deposit processing
The Payments Institute – July 10-13, 2011 – Washington, D.C. 24
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25. Cost of Cash to the Retailer
25
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Source: Nielsen Report 2009

26. Wouldn’t You ?
The Payments Institute – July 10-13, 2011 – Washington, D.C. 26
© 2011 NACHA — The Electronic Payments Association®. All rights reserved.
Source: The Daily Express

27. Oh, the Irony !
The Payments Institute – July 10-13, 2011 – Washington, D.C. 27
© 2011 NACHA — The Electronic Payments Association®. All rights reserved.
Sources: Change.org, Wired Magazine

28. Final Thought – What About the Branch ?
2002 2010 2016 E
5% 5%
5%
Deposit via
Mail
Deposit at 8% 25% 26%
0%
ATM
Depsit via 56%
87% 69% 13%
RDC 1%
Deposit at
Branch
11,400,000
5,221,374
7,977,099
4,344,512 3,468,304 2,610,687
2002 2010 2016 E
Retail Checks Deposit Transactions
As we continue to “win the war” on cash and checks, we need to think
very carefully about what will happen in the branch.
The Payments Institute – July 10-13, 2011 – Washington, D.C. 28
© 2011 NACHA — The Electronic Payments Association®. All rights reserved.
Source: Celent Research 2010

29. Thank You and Disclaimer
Chip Wickenden
Solutions Executive
FIS Global
Chip.wickenden@fisglobal.com
1-904-422-1321
Unnamed lawyers made us include the following: The views expressed herein are the speaker’s personal views and do not
necessarily reflect the views of NACHA - The Electronic Payments Association
29
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30. The Payments Institute – July 10-13, 2011 – Washington, D.C. 30
© 2011 NACHA — The Electronic Payments Association®. All rights reserved.

31. Do Products Like These Address a Significant Contactless
/ Mobile Threat?
• Slightly. For the simplest
contactless transactions, like
commuter tap & go
functions, the card can be
decremented, so a shield
offers protection
• POS transactions generally
have multiple interactions
now, which effectively
prohibit the ―pocket surfing‖
scenario
31
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32. Worldwide ATM Growth 2B to 3B in 5 Years
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33. Future ATM Distribution
The Payments Institute – July 10-13, 2011 – Washington, D.C. 33
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34. The Payments Institute – July 10-13, 2011 – Washington, D.C. 34
© 2011 NACHA — The Electronic Payments Association®. All rights reserved.

35. Ummm – Can Somebody Call Security . . .
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36. Actually – That’s a Poster ... Not the Latest Technology
The Payments Institute – July 10-13, 2011 – Washington, D.C. 36
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