Submitted To: Submitted By:Mr. abishak dixit Mr. mohitHod CSe Dept. Roll No-0939cs111007

be-cse 6th Semester

Seminar OnATM

Table of Contents

1. Introduction2.Names 3. History

4. Networking 5. ATM Charges

6. Hardware and Software 6.1 Reliability

7. ATM Card VS Credit Card 8. How ATM Works

8.1 Parts of Machine 8.2 Settlement funds

9. Security 9.1 Tips for Safe ATM usage

10. New Innovations Glossary

AUTOMATIC TELLER MACHINE

Introduction :

An Automatic Teller Machine (ATM) is a machine permitting a Bank’s customers to make cash withdrawals and check their account at any time and without the need for a human teller. Many ATMs also allow people to deposit cash or cheque and transfer money between their bank accounts.You're short on cash, so you walk over to the automated teller machine (ATM), insert your card into the card reader, respond to the prompts on the screen, and within a minute you walk away with your money and a receipt. These machines can now be found at most supermarkets, convenience stores and travel centers. Have you ever wondered about the process that makes your bank funds available to you at an ATM on the other side of the country?

ATMs are a quick, convenient way to access money in your accounts.

Names:

ATMs are known by a wide variety of names, some of which being more common in certain countries than others. Some examples are:

Automated Teller Machine Automated Banking Machine ATM Machine sic Hole-in-the-wall Cash Dispenser Cash Machine Robotic Teller Cash point (in the United Kingdom particularly) Bancomat or Bank mat (particularly in continental Europe Bancomat is a trademark of UBS AG Geld automat Germany (Geld = money) Post mat, Switzerland (Swiss Post Bank ATM) Bank machine (in Canada) MAC machine, or MAC, (for Money Access Center) (particularly on the East coast in the United States, esp. New Jersey and Pennsylvania) Ugly Teller

History

The world's first ATM was installed in Enfield Town in the London Borough of Enfield London on June 27, 1967 by Barclays Bank. In modern ATMs, customers authenticate themselves by using a plastic card with a magnetic stripe, which encodes the customer's account number, and by entering a numeric pass code called a PIN (personal identification number), which in some cases may be changed using the machine. Typically, if the number is entered incorrectly several times in a row, most ATMs will retain the card as a security precaution to prevent an unauthorized user from working out the PIN by pure guesswork.

Networking

Most ATMs are connected to interbank networks, enabling people to withdraw money from machines not belonging to the bank where they have their account. (Deposits can only be made at machines belonging to the bank that has the account.) This is a convenience, especially for people who are travelling: it is possible to make withdrawals in places where one's bank has no branches, and even to withdraw local currency in a foreign country, often at a better exchange rate than would be available by changing cash.  

ATM Charges

Many banks in the USA charge fees for the use of their ATMs by non-depositors, for withdrawals over the network by their own customers, or both; however, in the UK strong public reaction soon persuaded banks not to do this. There is also now a flourishing business in the United States of placing ATMs in grocery stores, malls, and other locations other than banks: some of these machines have signs advertising "low" fees.

Hardware and SoftwareATMs contain secure crypto processors, generally within an IBM PC

compatible host computer in a secure enclosure. The security of the machine relies mostly on the integrity of the secure crypto processor: the host software

often runs on a commodity operating system.

In-store ATM

In store ATMs typically connect directly to their ATM Transaction Processor via a modem over a dedicated telephone line, although the move towards Internet connections is under way. Along with the move to the internet, ATMs are moving away from custom circuit boards (most of which are based on Intel 8086 architecture) and into full fledged PCs with commercial operating systems like Windows 2000 and Linux. A good example of that is Banrisul, the largest bank in the South of Brazil, which has replaced the MS-DOS operating systems in its automatic teller machines with Linux. Also are used RMX 86, OS/2 and Windows 98 bundled with Java. The newest use Windows XP or Windows XP embedded.

 

ReliabilityATMs are generally reliable, but if they do go wrong customers will be left

without cash until the following morning or whenever they can get to the bank during opening hours. Of course, not all errors are to the detriment of

customers; there have been cases of machines giving out money without debiting the account or giving out a higher denomination of note by mistake.

Sometimes annoying software errors can occur which can appear as a dialog box on the screen which is impossible to close.

ATM CARD VS CREDIT CARD

The card you use at the ATM is known as a debit card. When debit cards first appeared it was easy to tell them apart from credit cards. Debit cards didn't have a credit card company logo on them; instead, they usually just had your bank name, your account number and your name.Today debit cards look exactly like credit cards even carrying the same logos. Both types of cards can be swiped at the checkout counter , used to make purchases on the internet, or to pay for the fill-up at the gas pump.When you use your debit card to make a purchase, it's just like using cash. The account that is attached to your debit card, in most cases your checking account, is automatically debited when you use your debit card. The cost of your purchase is deducted from the funds you have in that account.On the other hand, when you use your credit card to make a purchase you are using someone's else's money, specifically the issuer of the credit card, usually a banking institution. In effect, you agree to pay them back the money you borrowed to make your purchase. In addition you will also pay interest on the money "loaned" to you at the rate which you agreed to when you applied for their credit card. This is known as the annual percentage rate (APR).

While the two cards might act and look alike, the levels of consumer protection that each type of card provides can be different.

Under federal law, if someone steals your credit card you're only responsible to pay the first $50 of unauthorized charges. However, if you notify the credit card issuer before a thief is able to make any charges you may be free from all liability. If the credit card is not physically present when an unauthorized or fraudulent purchase is made, such as over the internet, you're also free from liability for those charges.

The protection offered to debit card fraud is similar but with a few exceptions. For example, your liability under federal law is limited to $50, the same as for a credit card, but only if you notify the issuer within two business days of discovering the card's loss or theft. Your liability for debit card fraud can jump up to $500 if you don't report the loss or theft within two business days.

And if you are the type of person that gives a passing glance to your monthly bank statement, you could be totally liable for any fraudulent debit card charges if you wait 60 days or more from the time your statement is mailed. Additional protection against fraudulent use of your credit or debit cards may be available through your homeowner's or renter's insurance. Check your policy or with your agent for more information about your coverage.Also be aware that you should contact your card issuer by certified letter, return receipt requested, after you've contacted them by phone to protect your consumer rights.

As for which card to use for what type of purchase, most experts agree that you should use your debit card for the same type of purchases you'd make as if you were using cash. Therefore, it makes more sense to use your debit card than your credit card at the grocery store or gas station (provided you have sufficient funds to cover these purchases of course).

You should avoid using your debit card for any online purchase or for something which is expensive. Why ? The main reason is that it is much easier to dispute a charge when you use your credit card. If your gold-plated, limited edition, hip-swinging Elvis wall clock arrives broken, your credit card company will remove the charge until the problem is resolved.

With your debit card you are stuck dealing with the merchant directly to resolve any problems with a purchase, even if your banking institution could really use a gold-plated, limited edition, hip-swinging Elvis wall clock of their very own.

How Do ATMs Work?An ATM is simply a data terminal with two input and four output devices. Like any other data terminal, the ATM has to connect to, and communicate through, a host processor. The host processor is analogous to an Internet service provider (ISP) in that it is the gateway through which all the various ATM networks become available to the cardholder (the person wanting the cash).

Most host processors can support either leased-line or dial-up machines. Leased-line machines connect directly to the host processor through a four-wire, point-to-point, dedicated telephone line. Dial-up ATMs connect to the host processor through a normal phone line using a modem and a toll-free number, or through an Internet service provider using a local access number dialed by modem.

Leased-line ATMs are preferred for very high-volume locations because of their thru-put capability, and dial-up ATMs are preferred for retail merchant locations where cost is a greater factor than thru-put. The initial cost for a dial-up machine is less than half that for a leased-line machine. The monthly operating costs for dial-up are only a fraction of the costs for leased-line. The host processor may be owned by a bank or financial institution, or it may be owned by an independent service provider. Bank-owned processors normally support only bank-owned machines, whereas the independent processors support merchant-owned machines.

Parts of the MachineYou're probably one of the millions who has used an ATM. As you know, an ATM has

two input devices:

Card reader - The card reader captures the account information stored on the magnetic stripe on the back of an ATM/debit or credit card. The host processor uses this information to route the transaction to the cardholder's bank.

Keypad - The keypad lets the cardholder tell the bank what kind of transaction is required (cash withdrawal, balance inquiry, etc.) and for what amount. Also, the bank requires the cardholder's personal identification number (PIN) for verification. Federal law requires that the PIN block be sent to the host processor in encrypted form. And an ATM has four output devices:

Speaker - The speaker provides the cardholder with auditory feedback when a key is pressed.

Display screen - 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.

Receipt printer - The receipt printer provides the cardholder with a paper receipt of the transaction.

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

The cash-dispensing mechanism has an electric eye that counts each bill as it exits the dispenser. The bill count and all of the information pertaining to a particular transaction is recorded in a journal. The journal information is printed out periodically and a hard copy is maintained by the machine owner for two years. Whenever a cardholder has a dispute about a transaction, he or she can ask for a journal printout showing the transaction, and then contact the host processor. If no one is available to provide the journal printout, the cardholder needs to notify the bank or institution that issued the card and fill out a form that will be faxed to the host processor. It is the host processor's responsibility to resolve the dispute.

Besides the electric eye that counts each bill, the cash-dispensing mechanism also has a sensor that evaluates the thickness of each bill. If two bills are stuck together, then instead of being dispensed to the cardholder they are diverted to a reject bin. The same thing happens with a bill that is excessively worn, torn, or folded.

The number of reject bills is also recorded so that the machine owner can be aware of the quality of bills that are being loaded into the machine. A high reject rate would indicate a problem with the bills or with the dispenser mechanism.

Settlement Funds

When a cardholder wants to do an ATM transaction, he or she provides the necessary information by means of the card reader and keypad. The ATM forwards this information to the host processor, which routes the transaction request to the cardholder's bank or the institution that issued the card. If the cardholder is requesting cash, the host processor causes an electronic funds transfer to take place from the customer's bank account to the host processor's account. Once the funds are transferred to the host processor's bank account, the processor sends an approval code to the ATM authorizing the machine to dispense the cash. The processor then ACHs the cardholder's funds into the merchant's bank account, usually the next bank business day. In this way, the merchant is reimbursed for all funds dispensed by the ATM.

So when you request cash, the money moves electronically from your account to the host's account to the merchant's account.

ATM SecurityEarly ATM security focused on making the ATMs invulnerable to physical attack; they were effectively safes with dispenser mechanisms. A number of attacks on ATMs resulted, with thieves attempting to steal entire ATMs by ram-raiding. Modern ATM physical security concentrates on denying the use of the money inside the machine to a thief, by means of techniques such as dye markers and smoke canisters. This change in emphasis has meant that ATMs are now frequently found free-standing in places like shops, rather than mounted into walls. Another trend in ATM security leverages the existing security of a retail establishment. In this scenario, the fortified cash dispenser is replaced with nothing more than a paper-tape printer. The customer requests a withdrawal from the machine, which dispenses no money, but merely prints a receipt. The customer then takes this receipt to a nearby sales clerk, who then exchanges it for cash from the till. ATM transactions are usually encrypted with DES but most transaction processors will require the use of the more secure Triple DES by 2005. There have also been a number of incidents of fraud where criminals have used fake machines or have installed fake keypads or card readers to existing machines. They have used these to record customers' PIN numbers and bank accounts and have then used this information to create fake accounts and steal money from consumers. A bank is always liable when a customer's money is stolen from an ATM, but there have been complaints that banks have made it difficult to recover money lost in this way.

Many banks recommend that you select your own personal identification number (PIN). Visa recommends the following PIN tips:

Don't write down your PIN. If you must write it down, do not store it in your wallet or purse. Make your PIN a series of letters or numbers that you can easily remember, but that cannot easily be associated with you personally. Avoid using birth dates, initials, house numbers or your phone number.

Visa also recommends the following tips for safe ATM usage:

Store your ATM card in your purse or wallet, in an area where it won't get scratched or bent.

Get your card out BEFORE you approach the ATM. You'll be more vulnerable to attack if you're standing in front of the ATM, fumbling through your wallet for your card.

Stand directly in front of the ATM keypad when typing in your PIN. This prevents anyone waiting to use the machine from seeing your personal information.

After your transaction, take your receipt, card and money away. Do not stand in front of the machine and count your money.

If you are using a drive-up ATM, get your vehicle as close to the machine as possible to prevent anyone from coming up to your window. Also make sure that your doors are locked before you drive up to the machine.

Do not leave your car running while using a walk-up ATM. Take your keys with you and lock the doors before your transaction.

If someone or something makes you uncomfortable, cancel your transaction and leave the machine immediately. Follow up with your bank to make sure the transaction was cancelled and alert the bank to any suspicious people.

Many retail merchants close their store at night. It is strongly recommended that they pull the money out of the machine when they close, just like they do with their cash registers, and leave the door to the security compartment wide open like they do with an empty cash-register drawer. This makes it obvious to any would-be thief that this is not payday.

For safety reasons, ATM users should seek out a machine that is located in a well-lighted public place. Federal law requires that only the last four digits of the cardholder's account number be printed on the transaction receipt so that when a receipt is left at the machine location, the account number is secure. However, the entry of your four-digit personal identification number (PIN) on the keypad should still be obscured from observation,

It's important to use a well-lit, public ATM machine at night

which can be done by positioning your hand and body in such a way that the PIN entry cannot be recorded by store cameras or store employees. The cardholder's PIN is not recorded in the journal, but the account number is. If you protect your PIN, you protect your account. New InnovationsSeveral companies are advertising ATMs for the blind. These machines would be located at kiosks rather than bank drive-thrus. For several years, the keypads at ATMs were equipped with Braille for the blind or visually impaired.

New innovations in this technology will include machines that verbally prompt the customers for their card, their PIN and the type of transaction they would like to make.

GLOSSARYSecure Crypto processor : A secure crypto processor is a dedicated computer for carrying out cryptographic operations, embedded in a packaging with multiple physical security measures, which give it a degree of tamper resistance.The purpose of secure crypto processor is to act as a keystone of a security sub-system, eliminating the need to protect the rest of the sub-system with physical security measures.

Modem : The word "modem", a portmanteau word constructed from "modulator" and "demodulator", refers to a device that modulates an analog "carrier" signal (such as sound), to encode digital information, and that also demodulates such a carrier signal to decode the transmitted information. The goal is to produce a signal that can be transmitted easily and decoded to reproduce the original digital data. Primarily used to communicate via telephone lines, modems can be used over any means of transmitting analog signals, from driven diodes to radio.

ACH Transfer : "ACH" is short for "automated clearing house." This bank terminology means that a person or business is authorizing another person or business to draft on an account.  It is common for fitness centers and other businesses to ACH a monthly membership fee from member accounts, and many small businesses use ACH for direct deposit of paychecks

Ram-Raiding : is the act of using a heavy vehicle such as a small truck to smash windows, tow away heavy objects, and other such actions.

DES : The Data Encryption Standard (DES) is a cipher (a method for encrypting information) selected as an official standard for the United States in 1976, though it subsequently enjoyed widespread use internationally. The algorithm was initially controversial, with classified design elements, suspicions about a National Security Agency (NSA) backdoor and a relatively short key length. DES consequently became the most intensely studied block cipher ever, and motivated the modern understanding of the subject. The cipher has since been superseded by the Advanced Encryption Standard (AES).