ATM and Cash Deposit Machine
[ From chapter-10 of the book "Information Technology in
Banking" written by Abul Kashem Md. Shirin and Nusrat Tamanna Prianka
and published by Institute of Bankers, Bangladesh (IBB) ]
1. Automated
Teller Machine (ATM)
ATM is used for cash-delivery operations with plastic
cards. Besides, the ATM allows the holder of a card to receive the information
on the current status of the account (including an extract on a paper), and
also to transfer money from one account to another. Obviously, the ATM is
supplied with the device for reading a card, and with the display and the
keyboard for interaction with the card-holder. The ATM dispenser is equipped
with the personal computer which provides management of a cash dispenser and
the control of its status. The last is rather important, as the cash dispenser
is storehouse of cash. Monetary denominations in an ATM are placed in
cartridges which are in the special safe. The number of cartridges defines
number of the denominations which are given out by an ATM. At present the
majority of models is designed for job in on-line mode with magnetic strip
cards as well as smarts cards. For maintenance of communication functions ATMs
are equipped with modems or LAN Card.
The
use of ATM in Bangladesh is limited to urban cities only. Most of the ATMs are
installed in Dhaka, Chittagong and Sylhet cities. However, the number of ATMs
is increasing rapidly, the number increased from 100 in 2003 to 1900 in 2010.
Out of 1900 ATMs, Dutch-Bangla Bank installed 1200 ATMs alone. Next large ATM
acquirers are BRAC Bank and Q-Cash network with more than 200 ATMs each.
1.1. Services
from ATM
The
cardholders can perform many banking activities using an ATM as listed below:
•
Cash withdrawal
•
Cash / Cheque
deposit
•
Fund transfer
from one account to another
•
Balance enquiry
•
Printing
Statement of account
•
Cheque book
request
•
Utility Bill
Payment
1.2. How
ATM works?
All ATMs are connected to a Switching Software
at Data Centre of the Bank. When a card is inserted into the ATM, the card
reader reads card number, date of expiry, banks identification number etc from
the Meg-stripe or Chip of the card, take user input for PIN and amount to be
withdrawn, and passes these information to the Switching Software.
The
Switching Software then checks if the card is a on-us or off-us. If on-us and
the card is a debit card, the Switching Software checks the validity (card
number exists in the database, date does not expire etc), status (not a stolen
or hot card) and PIN of the card. If all the checks are passed, the
corresponding account number and amount are passed into the Core Banking system
of the Bank with a request to make debit in the account. If the Core Banking
System found adequate balance in the account and the account is otherwise
operative, it debit the account for the amount, and send a authorization
code to the ATM via Switch. ATM, then
count the money and present to the customer.
If
on-us and the card is a credit card, the Switch does not check anything but
passed the information to the Credit Card System. The Credit Card System checks
the validity (card number exists in the database, date does not expire etc),
status (not a stolen or hot card) and PIN of the card. If all the checks are
passed, and the Card account has sufficient available credit limit, the Credit
Card System debits the card account for the amount, and send an authorization
code to the ATM via Switch. ATM, then count the money and present to the
customer.
If
the transaction is not on-us, the Switch checks if the transaction is made by a
cardholder of a partner bank. The partner banks share the ATM network for a
mutually agreed interchange fee and thus establish a direct connectivity
between them. Thus the transactions are passed directly to the partner banks
without routing through payment association (MasterCard, VISA, Dinar Club,
Discover, JBC network. This arrangement can avoid payment of higher interchange
fee between the banks as imposed by the payment association, and also the
network use fee payable to the payment association.
The
Switching Software of the Partner Bank verifies the card validity, status, PIN
etc and obtains authorization code from the Core Banking System (if debit card)
or Credit Card System (if credit card) and passes this code to the ATM via
Switch of the acquiring bank.
If
the transaction is not on-us and the card does not belong to any of the partner
banks, it forwards the transaction to the appropriate payment association. The
payment association forward the transaction to its member bank, the Switch of
which verifies the card validity, status, PIN etc and obtains authorization
code from its Core Banking System (if debit card) or Credit Card System (if
credit card) and passes this code to the ATM via payment association and Switch
of the acquiring bank.
If
the authorization code is positive, the ATM counts the money and present to the
customer.
1.3. ATM
Specifications & related topics
1.3.1 ATM
specification
ATM Types: In Bangladesh two types of ATMs are available -
Lobby type and Through-The-Wall type. The Lobby type ATM requires small space
to install, whereas the Through-The-Wall type of ATM requires large space with
two compartments in a room. Front part is used for customers and has a separate
door and Air conditioning (AC) system. The back side is machine room and also
has a separate door and AC. The cash is loaded from the rear side. In case of a
Lobby type ATM, cash is loaded from the front side of the ATM and requires only
one room with one unit of AC.
ATM Manufacturers: The top three brands of ATMs are: Diebold, NCR and Wincor-Nixdorf
manufactured by Diebold, NCR and Wincor respectably at their plants in
Singapore, China, Europe and USA. The
available models in Bangladesh are: NCR – Persona 77 and Self Serv 22; Diebold
– 64ix, 71ix, Opteva 520, 720, 522 and 510; Wincor-Nixdorf – Procash 1500 xe
and Procash 1500 xe USB.
Figure: A NCR
ATM, a Diebold ATM and a Wincor-Nixdorf ATM
|
|
Computer: Each ATM has a computer in it. A latest processor is
used for the computer such as: Intel Pentium IV, 2.8 GHz or Inter Core 2 Duo 2.13GHz.
One GB RAM, 80 GB HDD, CDRW, 10/100 Base T Ethernet USB, Ethernet Adapter are
integrated with the computer. The computer starts the ATM, stores journal
records electronically, and communicate with the Switch using TCP/IP on leased
line, ISDN, CDMA, GSM and V-SAT network with 3DES chip Encryption /
verification / validation.
Display: 12” /15” / 17” color
display – LCD or Touch Screen.
Card Reader: The card reader is very
important parts of an ATM. It reads the customers card either from meg-stripe
or from the Chip (if EMV card). The features and capability of a card reader
are as follows:
1. Motorized Card Reader
capable to read Magnetic stripe card & capable to read Smart Cards, Chip
Cards, HYCO Cards
2. Capable to read track 1, 2
and 3, having adherence to ISO standard of Master/VISA, EMV (latest version)
standards and any other standard formats
3. Capability to write on
card chip
4. Card return on power
failure
5. Conformance to VISA and
MasterCard standards
6. Sensing gate to prevent wrong insertion of card or
to prevent and protect from foreign objects other than valid cards
Protocol: Two protocols – NDC+ and D912 are used to
communicate with the switch.
Key Pad:
Encrypted / EPP
(PCI Compliant) Standard keyboard with functional keys are used with ATM.
Printers: Two printers – a Consumer Printer and a Journal
Printer are provided with an ATM. The consumer printer prints the slip after
every transaction for the customers whereas the Journal Printer resides inside
the ATM and prints all the transactions with fail / successful status. The
disputes on cash delivery can be identified from this journal.
Dispenser: Dispenser is an unit which counts and dispenses
money. Dispenser uses vacuum pick (for NCR & Wincor) or Friction Pick (Diebold) technology
for counting and dispensing money.
Security: ATM vaults are provided with dual combination lock,
as two officers are required to open the vault. The safe is available in 2
standards – UL291 and CEN. CEN is stronger than UL291.
Passbook and Statement printing option: The ATM may have additional features for printing
passbook and account statement.
Cash Deposit Option: ATMs can have cash deposit option. The cash may be
deposited in envelope or as bundle. If cash is deposited in bundle, the ATM
counts the cash in different denominations and re-fills the dispensing
cassettes. This type of ATMs are called Re-Cycle
ATM.
1.3.2. Denomination
available at ATM
Number
of denomination available in ATM depends on the number of cassettes that can be
inserted in an ATM. If there are provision for housing 4 cassettes in an ATM, 4
types of currency notes can be loaded. However to avoid frequent cash loading,
the banks are normally provide only one or two denominations in the ATM, like
Taka 1000 notes in 2 cassettes and Taka 500 notes in another 2 cassettes. A
cassette can hold 2000 notes. Thus if two cassettes are loaded with Tk.500
notes and another 2 cassettes with Tk.100 notes, total amount of taka that can
be loaded into ATM at a time is Tk.2.20 million.
1.3.3. Cash
feeding by 3rd party
With
a size of 1000 ATM and 1 million cards, a bank needs to load Tk.500 million
everyday in the ATM. As the quality of note in our country is not good and note
contains holes, it is required to check all the notes one by one, reject the
bad notes manually and then arrange the notes in such a way that the hole of
two adjacent notes fall in two opposite sides. This requires a huge manpower
every day. Thus this job is outsourced to 3rd party.
1.3.4. Partial
Dispense of Cash and non-dispense of cash
Sometimes
due to error in dispenser or bad note quality, the ATM can’t count all the
notes requested by the customer. In such case ATM either dispenses part of the
money or none. In such a case, normally the ATM sends a reversal request to the
authorizer via Switch and the authorized credit the non-dispensed amount into
the customer account.
Sometime,
the reversal also fails and thus customer finds less money in his account. The
cardholder, in such case, must report to the card issuing bank. The cardholder
is not known to the acquiring bank, acquiring bank does not have access to the
customer account, and thus they can’t take any action in this regard.
1.3.5. Capture
of money
After
money is presented to the customer, the ATM beeps and waits for 45 seconds
(configurable). If the customer does not receive money within this time period,
the ATM captures the money and keeps in a cassette. If the money is captured,
it should be reported to the Acquiring banks.
1.3.6. Network
used for connectivity
The
ATM requires a small bandwidth to complete a transaction, only 16 Kbps. Thus
any type of communication media can be used for ATM transaction. Most easy and
cheap media for ATM transaction is mobile data network such as Zoom of CityCell
and Edge of Grameen Phone. However the modems available are for home use, not
for 24 hour’s continuous use, and thus they frequently goes out of order and
thus uninterrupted ATM services become a challenge if mobile data network is
used.
1.3.7. Card
Capture and hot card
For
security reason, if a cardholder inserts wrong PIN 3 times, the ATM captures
the card and the card become hot. In such case the customer should report to
his home branch. The cash loading team, during their next visit, will collect
the card and send to the cardholder’s home branch. If a hot card is inserted
into the ATM, the ATM will capture the card immediately. Therefore it is
required to call to the help desk of the bank and make the status of the card
normal before using a hot card. During your call the bank officer may ask you
several questions to be sure that you are the right person and thus the card is
with the proper person and thus can be make normal. Other reasons for capturing
cards are: power failure (or UPS backup exhausted) at ATM, card was blocked
earlier, problem of cards reader of the ATM.
1.3.8. Space
requirement for installation of ATM
•
Lobby type ATMs
•
Minimum 6’ X 9’
•
Suitable for
installation on the lobby like airport, international hotels, super markets,
Rail Station etc.
•
Also suitable for
off-side locations
•
Through-The-Wall
ATMs
•
8’ X 15’ (4’ for
machine in the middle, 4’ for cash replenishment & servicing at the back
side, 4’ as customer area at the front side and 3’ for queue)
•
Suitable for
off-side locations
1.3.9. One-time
and monthly expenditure for an ATM booth
The
one-time investments in an ATM booth are as follows:
·
Price of ATM
·
Advance to the
landlord
·
Price of UPS,
CCTV, Air Conditioner
·
Cost of
construction of booth, signage and decoration
The
monthly recurring expenditures are as under:
·
Rent of the booth
·
Electricity cost
·
Salary of 3
Security Guards in 3 shifts
·
Cash sorting and
feeding
·
Link charge
·
Maintenance
charge for ATM, UPS, CCTV, AC and booth
·
Proportionate
Switching System cost
·
Proportionate
Data Centre manpower cost
The
one-time cost may vary from Taka 2.00-2.50 million and the monthly recurring
cost may vary from Taka 60,000 - 70,000 per ATM.
1.3.10. Income
from an ATM
Normally
there is no transaction fee for the on-us transaction at ATM. However for the
off-us transactions, the Acquiring Bank receives Tk.12-40 for local
transactions and USD1.00-1.25 for international transactions. This is called
local and international ATM interchange fee respectively, and determined by the
respective payment associations. Annual fee on the debit card charged to the
cardholders may also be considered as fee income.
1.4. ATM
Fraud and remedy
ATM
fraud throughout the world has increased significantly over the past few years
and is becoming more sophisticated, incorporating technologies to record ATM
card and PIN information.
ATM
fraud generally comes in two varieties: card-reading devices and card-trapping
devices.
1.4.1. Card Reading Devices
Criminals
alter the ATM itself by adding a skimming machine and a mini-camera to it. The
skimming device, mounted on the card entry slot, reads the bar code of the
card. The mini camera records PIN as the cardholder enters his PIN. After the
cardholder completes his transaction, receive card, and walk away, someone else
has his card information and his PIN. Usually, the Fraudster makes a new card
and uses it to withdraw money from the customer’s account. The skimming devices
are not always easy to spot, especially if the customers are unfamiliar with
the look of ATMs.
1.4.2. Card-Trapping
Devices
An
alternative form of altering the ATM itself involves inserting a thin ribbon of
x-ray tape into the card slot. The loop traps the customer’s card and makes it
seem as though the card is not working. At this point, someone else, a Fraudster
comes along and tells the cardholder that he (cardholder) can retrieve his card
by re-entering his (cardholder’s) PIN code. The Fraudster watches while the
cardholder does so. After the card still refuses to emerge and the cardholder walks
away from the ATM, the Fraudster removes the device with the card, which he
then uses to withdraw money from the cardholder’s account.
In
order to prevent becoming the victim of such scams:
·
Avoid ATMs where
the card slots appear to have been mounted on the machine. Card entry slots
should be flush with the surface of the ATM or recessed from it. If you see a
card entry slot that is raised above the machine, it should raise your
suspicions and you should not use it.
·
If you find it
awkward to read the screen or enter your PIN, do not use the machine. It may
have been altered. Legitimate displays are never mounted in front of ATMs.
Anything that blocks or partially obscures a sign may house a camera.
·
Guard your PIN,
especially when entering it, by shielding the keypad with one of your hands.
·
If a machine
swallows your card, call the bank’s help desk and report it.
·
Change your PIN
from the original number given when you first got your card. Do not keep your
account number and PIN together.
2. Deposit
Machine
A
deposit machine is a machine installed by a Bank and used by the customers for
depositing money into it. Deposit machine is also called as KIOSK. A deposit
machine may have a card reader. If a cardholder sweep his card before making a
deposit, he does not require to type his account number or card number. The Deposit
machine can recognize the customer. The amount to be deposited is inserted into
a closed envelope and dropped inside the machine. The amount deposited needs to
be key-in using the keyboard of the deposit machine.
Some
time, the amount key-in and the physical amount inserted inside the envelope
may vary. The envelopes are opened by a team within the coverage of CCTV. If
dispute arises, the decision of the team (bank officials) will be final.
However if the customer disagree, the customer can view the CCTV record.
However
some banks, to avoid such disputes, engaged bank officers at each of the
deposit machines to ensure amount inside the envelope. The envelope should be
signed by both the officer and the customer.
The
important part of a deposit machine is vault, its specifications (UL or CEN)
and its note capacity. The vault capacity can be as large as to accommodate 700
envelops containing 500 notes in each Envelope.
The
deposit machine is also equipped with a computer, monitor and software.
Locally
manufactured deposit machine are available in Bangladesh.
3. Fast
Track
Fast
Track is an unique concept developed by Dutch-Bangla Bank for its customers.
The following are installed in a Fast Track:
·
Several numbers
(5-15) of ATMs
·
Several number
(1-3) of Deposit machines
·
One officer each
for two shifts
·
Several UPS
·
Links for several
network providers
ATMs
are normally become out of order due to the following reasons:
·
No link with the
bank server
·
No money inside
the ATM
·
Cash jam due to
soiled note which prevent withdrawing money by the next customers
·
ATM hardware
problem
·
UPS is out of
order
·
No electricity
To
arrest all the above problems, Dutch-Bangla Bank has installed Fast Track. BRAC
Bank and Standard Chartered Bank have also installed similar Centers with the
same concept, but with different name.
The
activities of a Fast Track are mentioned below
a) Cash Withdrawal:
Customers
can withdraw money from any of the 5-15 units of ATMs installed at Fast Track.
The ATMs are powered from different UPS and linked to Data Center through
various link providers which created redundancy for power failure and network
problem. Again due to multiple ATMs at Fast Track, further redundancy has been
ensured for ATM disorder, Cash shortage and Cash jam. This ensures that a
customer will be able to withdraw money from ATM at Fast Track without failure.
On the other hand, presence of an officer at FT helps the customer to solve any
ATM related problem such as Cash/Card capture.
b) Cash Deposit
A
customer can deposit money at Fast Track and avoid a long queue at the branch
counter for depositing money. The customer can also get service for the
extended hours from the Fast Track for depositing money. The official on duty
at Fast Track receives cash or cheque from the customers, counts, inserts into
an envelope, closes the envelope, and puts a sign on it. The customers also
sign on the envelope and drop it into the deposit machine.
c) Account Opening
The
officer on duty assists the customers to fill the account opening form,
receives the filled-in form along with necessary papers and sends the form to
the nearest branch for opening the account observing due formalities. The
customer can receive his deposit book and Card and/or PIN, and Cheque Book (if
requested) within 3 working days from the Fast Track.
d) Customer Request Form
Various
customer request forms are available at Fast Track. The duty offers provide the
appropriate form to the customer, assist to fill-in the forms, receive the form
from the customer and send to the relevant Division of the Head Office or
branch for execution of the customer's request. A list of such services is
given below:
i)
Customers can fill-in a “Account Transfer” form and hand over to the Fast Track
officer for fund Transfer to another account
ii)
Customers can fill-in a “New Card” form and hand over to the Fast Track officer
for getting a new Debit Card (MasterCard Debit / Maestro / Visa Debit/Visa
Electron) or Credit Card (MasterCard / Visa)
iii)
Customers can fill-in a “Card Replacement” form and hand over to the Fast Track
officer for getting a replacement Card (Debit/Credit) for any of the following
reasons:
• Card Lost / Stolen
• Incorrect name / spelling mistake on card
• Wrong photograph on card
• Card is physically damaged
• Magnetic Strip error/Faulty card
• Any other reason acceptable to Fast Track Officer
iv)
Customers can fill-in a “Block/unblock Card” form and hand over to the Fast
Track officer for blocking his Card / for reactivation of a blocked Card. Card
may be blocked for any of the following reasons
• Incorrect PIN entered at ATM or POS terminal
• Customer blocked the card over a phone request to
the Card Center
• Any other reason acceptable to Fast Track Officer
v)
Customer can place a request for re-issue of PIN. Re-issue of PIN may be
requested by a customer who have forgotten his PIN or in the fear that his PIN have
been compromised to another person.
vi)
Customer can place a request for linkage of a new account with his exiting card
vii)
Customer can place a request for the following services on Credit Card account:
• Auto debit
• Increasing card limit
• Limit transfer
• Obtaining Supplementary Card
• Early renewal
• Cancellation
• Card Cheque
• Any other service acceptable to the Fast Track
Officer
viii)
Customer can place a request for refund of Cash not dispenses from ATM but
account debited.
ix)
Customer can submit application form for availing Internet, SMS & Alert
facility on bank account
e) Delivery of Captured Card
If
a Card is captured into an ATM at the Fast Track, the duty officers open the
upper chamber of the ATM and deliver the captured card to the cardholder
instantly after checking his photograph and signature recorded at the back of
the card.
