Page 224 - DMGT303_BANKING_AND_INSURANCE

Unit 11: Innovations in Banking

11.4 Automated Teller Machine Notes

An automated teller machine (ATM) is a computerized telecommunications device that provides
the customers of a financial institution with access (reach) to financial transactions in a public
space without the need for a human clerk or bank teller.
On most modern ATMs, the customer is identified by inserting a plastic ATM card with a
magnetic stripe or a plastic smartcard with a chip, that contains a unique card number and some
security information, such as an expiration date or CVC (CVV). Security is provided by the
customer entering a personal identification number (PIN).
By using an ATM, customers can access their bank accounts in order to make cash withdrawals
(or credit card cash advances) and check their account balances. ATMs are known by various
casual terms including automated banking machine, money machine, cash machine, hole-in-
the-wall, cashpoint or bancomat.
1. Invention of ATM: Don Wetzel invented the Automated Teller Machine in the late 1960's,
while working for a company in Dallas called Docutel.

A graduate of the University of Loyola in New Orleans (Class of 1951), Wetzel played
professional minor-league baseball for three years after college before putting his bachelor's
degree in foreign trade to work at IBM. He joined Docutel in 1968 and received the patent
for the ATM in 1973.

2. Alternative Uses: Although ATMs were originally developed as just cash dispensers, they
have evolved to include many other bank-related functions. In some countries, especially
those which benefit from a fully integrated cross-bank ATM network (e.g.: Multibanco in
Portugal), ATMs include many functions which are not directly related to the management
of one's own bank account, such as:
(i) Deposit currency recognition, acceptance, and recycling
(ii) Paying routine bills, fees, and taxes (utilities, phone bills, social security, legal fees,
taxes, etc.)
(iii) Printing bank statements
(iv) Updating passbooks
(v) Loading monetary value into stored value cards

LOVELY PROFESSIONAL UNIVERSITY 219