PROJECT REPORT ON

AUTOMATED TELLER MACHINE

SUBMITTED FOR THE PARTIAL FULFILLMENT OF

100 HOURS INFORMATION TECHNOLOGY TRAINING PROGRAMME

CONDUCTED BY INSTITUTE OF CHARTERED ACCOUNTANTS OF

INDIA

KOTTAYAM

SUBMITTED BY

NAME: JOJO THOMAS

REG NO: SRO0692872

UNDER THE GUIDANCE OF

ACKNOWLEDGEMENT

I express my humble gratitude to almighty god for the constant help

and providence with which he has accompanied me.

I would like to take this opportunity to express my profound

gratitude towards everyone who generously contributed their time, energy
and resources for their contribution towards the successful completion of
my project.

In addition, I address my special thanks to the ITT faculty, Mrs.

REVATHY.R and MRS. ATHIRA.P especially for their commitment to
guide throughout the research.

I am extremely grateful to the ALAPPUZHA branch of ICAI, the

chairman, CA. VENKITACHALAM J and other ICAI staff for providing
me with required facilities and support.
Contents
INTRODUCTION

An automated teller machine (ATM) is a computerised

telecommunications device that enables customers of financial
institutions to perform financial transactions, such as Cash Withdrawals,
PIN Change, Balance Inquiry at any time and without the need for direct
interaction with bank staff. According to the ATM Industry Association
(ATMIA), there are now close to 3.5 million ATMs installed worldwide.

On most modern ATMs, customers are identified by inserting a

plastic ATM card (or some other acceptable payment card) into the ATM,
with authentication being by the customer entering a personal
identification number (PIN), which must match the PIN stored in the chip
on the card (if the card is so equipped), or in the issuing financial
institution's database.

Using an ATM, customers can access their bank deposit or credit

accounts in order to make a variety of financial transactions such
as cashwithdrawals, check balances, or credit mobile phones. ATMs can be
used to withdraw cash in a foreign country. If the currency being
withdrawn from the ATM is different from that in which the bank account
is denominated, the money will be converted at the financial
institution's exchange rate.
History

The idea of out-of-hours cash distribution developed from bankers'

needs in Asia (Japan), Europe (Sweden and the United Kingdom) and
North America (the United States). Little is known of the Japanese device
other than that it was called "Computer Loan Machine" and supplied cash
as a three-month loan at 5% p.a. after inserting a credit card. The device
was operational in 1966.

Adrian Ashfield invented the basic idea of a card combining the key
and user's identity in February 1962. This was granted UK Patent 959,713
for "Access Controller" in June 1964 and assigned to W. S. Atkins &
Partners who employed Ashfield. He was paid ten shillings for this, the
standard sum for all patents. It was originally intended to dispense petrol
but the patent covered all uses.

In the US patent record, Luther George Simjian has been credited

with developing a "prior art device". Specifically his 132nd patent
(US3079603), which was first filed on 30 June 1960 (and granted 26
February 1963). The roll-out of this machine, called Bankograph, was
delayed by a couple of years, due in part to Simjian's Reflectone
Electronics Inc. being acquired by Universal Match Corporation. An
experimental Bankograph was installed in New York City in 1961 by the
City Bank of New York, but removed after six months due to the lack of
customer acceptance. The Bankograph was an automated envelope deposit
machine (accepting coins, cash and cheques) and did not have cash
dispensing features
ATM Cards

An ATM card is a payment card or dedicated payment card issued by

a financial institution which enables a customer to access automated teller
machines (ATMs). ATM cards are payment card size and style plastic
cards with a magnetic stripe or a plastic smart card with a chip that
contains a unique card number and some security information such as an
expiration date or CVVC (CVV). ATM cards are known by a variety of
names such as bank card, MAC (money access card), client card, key
card or cash card, among others. Most payment cards, such
as debit and credit cards can also function as ATM cards, although ATM-
only cards are also available. The use of a credit card to withdraw cash at
an ATM is treated differently to a POS transaction, usually attracting
interest charges from the date of the cash withdrawal. Interbank
networks allow the use of ATM cards at ATMs of private operators and
financial institutions other than those of the institution that issued the
cards.

Credit card

A credit card is a payment card issued to users (cardholders) to

enable the cardholder to pay a merchant for goods and services based on
the cardholder's promise to the card issuer to pay them for the amounts so
paid plus the other agreed charges. The card issuer (usually a bank)
creates a revolving account and grants a line of credit to the cardholder,
from which the cardholder can borrow money for payment to a merchant
or as a cash advance. In other words, credit cards combine payment
services with extensions of credit. Complex fee structures in the credit
card industry may limit customers' ability to comparison shop, helping to
ensure that the industry is not price-competitive and helping to maximize
industry profits. Due to concerns about this, many legislatures have
regulated credit card fees.

A credit card is different from a charge card, which requires the

balance to be repaid in full each month. In contrast, credit cards allow the
consumers a continuing balance of debt, subject to interest being charged.
A credit card also differs from a cash card, which can be used like currency
by the owner of the card. A credit card differs from a charge card also in
that a credit card typically involves a third-party entity that pays the
seller and is reimbursed by the buyer, whereas a charge card simply defers
payment by the buyer until a later date.

Figure 1 Credit Cards

Debit card

A debit card (also known as a bank card, plastic card or check card)
is a plastic payment card that can be used instead of cash when making
purchases. It is similar to a credit card, but unlike a credit card, the money
comes directly from the user's bank account when performing a
transaction.

Some cards might carry a stored value with which a payment is

made, while most relay a message to the cardholder's bank to withdraw
funds from a payer's designated bank account. In some cases, the primary
account number is assigned exclusively for use on the Internet and there is
no physical card.

In many countries, the use of debit cards has become so widespread

that their volume has overtaken or entirely replaced cheques and, in some
instances, cash transactions. The development of debit cards, unlike credit
cards and charge cards, has generally been country specific resulting in a
number of different systems around the world, which were often
incompatible. Since the mid-2000s, a number of initiatives have allowed
debit cards issued in one country to be used in other countries and allowed
their use for internet and phone purchases.

Unlike credit and charge cards, payments using a debit card are
immediately transferred from the cardholder's designated bank account,
instead of them paying the money back at a later date.

Debit cards usually also allow for instant withdrawal of cash, acting
as an ATM card for withdrawing cash. Merchants may also offer cashback
facilities to customers, where a customer can withdraw cash along with
their purchase.
Procedure for issuing ATM Cards

At the Central Office, there is a specially designed computer system

which has a specific software. The application form receive from the
customer is the input for the process and the output consists of file
containing data for preparation of ATM card. The software checks whether
the customer details provided in the application tally with the data
contained in the Central Data Base of the Core Banking Solution. Only
after the details tally, the output file is generated. The Personal
Identification Number is generated by the software and directly sent to the
equipment for printing the Pin Mailer. It is to be noted that the PIN
generated is not stored in the memory of any machine.

As a concurrent process, a natural PIN is generated and stored in

the database of the ATM switch. ATM Switch is a computer with a server
attached to it. Database resides on the server.

Natural PIN

There are different methods of generating a natural PIN. The natural PIN
is a number. One of the methods adopted is to encrypt the card number.
After encryption, the encrypted value of the card number is obtained. This
encrypted value is decimalized which in turn will produce a number with
several digits. The first four digits of the above number is called natural
PIN. The natural PIN is deducted from the PIN value. The value of the
natural PIN is deducted from the PIN value which gives the offset value.

PIN No (-) Natural PIN (=) Offset Value

Dimension

The size of ATM cards is 85.60 mm × 53.98 mm (3.370 in × 2.125 in)

and rounded corners with a radius of 2.88–3.48 mm, in accordance
with ISO/IEC 7810#ID-1, the same size as other payment cards, such as
credit, debit and other cards. They also have a printed or embossed bank
card number conforming with the ISO/IEC 7812 numbering standard.

ATM uses

All ATMs, at a minimum, will permit cash withdrawals of customers

of the machine's owner (if a bank-operated machine) and for cards that are
affiliated with any ATM network the machine is also affiliated. They will
report the amount of the withdrawal and any fees charged by the machine
on the receipt. Most banks and credit unions will permit routine account-
related banking transactions at the bank's own ATM, including deposits,
checking the balance of an account, and transferring money between
accounts. Some may provide additional services, such as selling postage
stamps.

Some ATM cards can also be used at a branch, as identification for

in-person transactions

The ability to use an ATM card for in-store EFTPOS purchases or

refunds is no longer allowed; however, if the ATM card is also a debit card,
it may be used for a pin-based debit transaction, or a non-pin-based credit-
card transaction if the merchant is affiliated with the credit or debit card
network of the card's issuer. Banks have long argued with merchants over
the fees that can be charged by the bank for such transactions. Despite the
fact that ATM cards require a PIN for use, banks have decided to permit
the use of a non-PIN based card (debit or credit) for all merchant
transactions.

Prior to the development of debit cards, ATM cards also sometimes

fulfilled a dual purpose by serving as a cheque guarantee card.

For other types of transactions through telephone or online banking,

this may be performed with an ATM card without in-person
authentication. This includes account balance inquiries, electronic bill
payments, or in some cases, online purchases.

Functioning of the ATM

 The customer swipes his ATM card and information provided in the
magnetic strip is read by the machine.
 The customer has to key his Personal Identification Number(PIN)
which he has received by means of PIN mailer sent by the bank.
 The PIN entered is immediately encrypted by the machine called
PIN machine. Sometimes this process is also achieved by means of
the software which resides in the ATM server. The encryption may
be done by means of a hardware or software. When it is done by the
hardware, there is a hardware security model (HSM); if this is done
by software, there is software security model (SSM). HSM or SSM
encrypts the PIN entered by the customer by means of an encryption
algorithm. This algorithm is loaded into the machine by the officers
of the bank. As it is necessary to ensure security, the loading process
is done under dual control by two officers each loading one half of
algorithm.
 When account number and PIN provided by the customer tally with
the data available at the database of switch and PIN generated by
the PIN machine, the customer is authenticated. It means that the
customer has been recognised as a genuine customer of the bank.
 It will be observed that the loss of ATM card alone is not a matter of
concern such as losing both the ATM card and the PIN information.
 Once the customer is authenticated, the process requested by the
customer is initiated.
 The activity of cash disposal is facilitated by the ATM switch. The
cash is then picked by the customer.
 After the cash has been dispensed and the customer has picked up
the cash, the ATM switch communicates with the Central Data Base
server so that the cash withdrawal is recirded and the balance is
accordingly reduced.
 As we all know, there are arrangements between banks by which
ATM card of one bank can be processed at the ATM kiosk of another
bank. This process is possible within the banks which have entered
into an agreement to this effect. The process that follows when the
ATM card of a different bank is swiped at the ATM kiosk is slightly
different. As the ATM card of different bank is swiped, the
information regarding the bank and the customer number are
available to the ATM. The information so obtained is directed to the
ATM switch of the other bank. The process thereafter is similar to
the process discussed above.
 It is possible that a customer did not or could not collect the cash
dispensed by the cash dispenser. In such a case, the cash dispensed
would be collected in a secure tray for collecting rejected cash. Also
the fact that cash was not collected would be reported by the ATM to
the switch. The switch in turn would request the host computer for
reversal of entry.
 The switch and host computer log all events, thus facilitationg
reconciliatoin of cash and entries.
Verification of PIN

The customer enters his PIN and there is a process which takes place
before the pin is accepted and authentic by the machine. The various steps
are as follows:

1. The customer inserts the card adn thereafter types the PIN.
2. The encrypted PIN is sent to the ATM switch.
3. The details of ATM card issued are already in the database and when
the ATM card is inserted the machine verified to see whether the
number in the database and satisfies itself of the exustence.
4. From the cardnumber, natural PIN is generated. As already discussed
natural PIN is generated by decimalizing the encrypted value of the
card and considering only the first four digits represent the natural
PIN.
5. The difference between the actual pin andn the natural pin is stored in
the atm switch as an initial step. Subsequently whenever the customer
inserts his ATM and keys his PIN in the machine, the correctness of the
PIN is verified by the system by adopting a process. The system has
stored the offset value.
6. When the card is inserted, the card number is encrypted by the HSM or
SSM. The enccrypted value is decimalised and the natural PIN is
obtained.
7. The value of the natural PIN obtained is added to the offset value
available already in the system. At this stage, the relevant PIN is
generated within the system.
8. The generated PIN as discribed above is compared with the PIN typed
by the customer; if they tally the customer is authenticated.
 Knowing the PIN alone will not facilitate a person to access the ATM
facility. It is a combined effect of the ATM card and the PIN which permits
access to the ATM.

Hardware

An ATM is typically made up of the following devices:

 CPU (to control the user interface and transaction devices)

 Magnetic or chip card reader (to identify the customer)
 PIN pad EEP4 (similar in layout to a touch tone or calculator
keypad), manufactured as part of a secure enclosure
 Secure cryptoprocessor, generally within a secure enclosure
 Display (used by the customer for performing the transaction)
 Function key buttons (usually close to the display) or a touchscreen
(used to select the various aspects of the transaction)
 Record printer (to provide the customer with a record of the
transaction)
 Vault (to store the parts of the machinery requiring restricted
access)
 Housing (for aesthetics and to attach signage to)
 Sensors and indicators

Due to heavier computing demands and the falling price of personal

computer–like architectures, ATMs have moved away from custom
hardware architectures using microcontrollers or application-specific
integrated circuits and have adopted the hardware architecture of a
personal computer, such as USB connections for peripherals, Ethernet and
IP communications, and use personal computer operating systems.
 Business owners often lease ATMs from service providers. However,
based on the economies of scale, the price of equipment has dropped to the
point where many business owners are simply paying for ATMs using a
credit card.

New ADA voice and text-to-speech guidelines imposed in 2010, but

required by March 2012 have forced many ATM owners to either upgrade
non-compliant machines or dispose them if they are not upgradable, and
purchase new compliant equipment. This has created an avenue for
hackers and thieves to obtain ATM hardware at junkyards from
improperly disposed decommissioned machines

The vault of an ATM is within the footprint of the device itself and is
where items of value are kept. Scrip cash dispensers do not incorporate a
vault.

Mechanisms found inside the vault may include:

 Dispensing mechanism (to provide cash or other items of value)

 Deposit mechanism including a cheque processing module and bulk
note acceptor (to allow the customer to make deposits)
 Security sensors (magnetic, thermal, seismic, gas)
 Locks (to ensure controlled access to the contents of the vault)
 Journaling systems; many are electronic (a sealed flash memory
device based on in-house standards) or a solid-state device (an actual
printer) which accrues all records of activity including access
timestamps, number of notes dispensed, etc. This is considered
sensitive data and is secured in similar fashion to the cash as it is a
similar liability.

ATM vaults are supplied by manufacturers in several grades.

Factors influencing vault grade selection include cost, weight,
regulatory requirements, ATM type, operator risk avoidance practices
and internal volume requirements

Figure 2 ATM Block Diagram

Software

With the migration to commodity Personal Computer hardware,

standard commercial "off-the-shelf" operating systems and programming
environments can be used inside of ATMs. Typical platforms previously
used in ATM development include RMX or OS/2.

Today, the vast majority of ATMs worldwide use a Microsoft

Windows operating system, primarily Windows XP Professional or
Windows XP Embedded. In early 2014, 95% of ATMs were running
Windows XP. A small number of deployments may still be running older
versions of the Windows OS, such as Windows NT, Windows CE, or
Windows 2000.

There is a computer industry security view that general public

desktop operating systems(os) have greater risks as operating systems for
cash dispensing machines than other types of operating systems like
(secure) real-time operating systems (RTOS). RISKS Digest has many
articles about ATM operating system vulnerabilities.

Linux is also finding some reception in the ATM marketplace. An

example of this is Banrisul, the largest bank in the south of Brazil, which
has replaced the MS-DOS operating systems in its ATMs with Linux.
Banco do Brasil is also migrating ATMs to Linux. Indian-based Vortex
Engineering is manufacturing ATMs which operate only with Linux.
Common application layer transaction protocols, such as Diebold 91x (911
or 912) and NCR NDC or NDC+ provide emulation of older generations of
hardware on newer platforms with incremental extensions made over time
to address new capabilities, although companies like NCR continuously
improve these protocols issuing newer versions (e.g. NCR's AANDC v3.x.y,
where x.y are subversions). Most major ATM manufacturers provide
software packages that implement these protocols. Newer protocols such
as IFX have yet to find wide acceptance by transaction processors.

With the move to a more standardised software base, financial

institutions have been increasingly interested in the ability to pick and
choose the application programs that drive their equipment. WOSA/XFS,
now known as CEN XFS (or simply XFS), provides a common API for
accessing and manipulating the various devices of an ATM. J/XFS is a
Java implementation of the CEN XFS API.

While the perceived benefit of XFS is similar to the Java's "Write

once, run anywhere" mantra, often different ATM hardware vendors have
different interpretations of the XFS standard. The result of these
differences in interpretation means that ATM applications typically use a
middleware to even out the differences among various platforms.

With the onset of Windows operating systems and XFS on ATMs, the
software applications have the ability to become more intelligent. This has
created a new breed of ATM applications commonly referred to as
programmable applications. These types of applications allows for an
entirely new host of applications in which the ATM terminal can do more
than only communicate with the ATM switch. It is now empowered to
connect to other content servers and video banking systems.

Notable ATM software that operates on XFS platforms include

Triton PRISM, Diebold Agilis EmPower, NCR APTRA Edge, Absolute
Systems AbsoluteINTERACT, KAL Kalignite Software Platform, Phoenix
Interactive VISTAatm, Wincor Nixdorf ProTopas, Euronet EFTS and
Intertech inter-ATM.
 With the move of ATMs to industry-standard computing
environments, concern has risen about the integrity of the ATM's software
stack.

Figure 3 ATM Running Windows 2000

Security of Automated Teller Machines

Automated Teller Machines (ATMs) were first introduced in 1939.

Nowadays, about 3 million units are installed worldwide. As the number of
ATM units increase, the machines are prone to hacker attacks, fraud,
robberies and security breaches. In the past, the ATM machines' main
purpose was to deliver cash in the form of bank notes and to debit a
corresponding bank account. However, ATM machines are becoming more
complicated, and they serve numerous functions, thus becoming a high
priority target to robbers and hackers. Modern ATM machines are
implemented with high-security protection measures. They work under
complex systems and networks to perform transactions. The data
processed by ATMs are usually encrypted, but hackers can employ discreet
hacking devices to hack accounts and withdraw the account's balance. As
an alternative, unskilled robbers threaten bank patrons with a weapon to
loot their withdrawn money or account.

Methods of looting ATMs

ATM vandals can either physically tamper with the ATM machine to
obtain cash, or employ credit card skimming methods to acquire control of
the user's credit card account. Credit card fraud can be done by inserting
discreet skimming devices over the keypad or credit card reader . The
alternative way to credit card fraud is to identify the PIN directly with
devices such as cameras concealed near the keypad.

Security measures of ATMs

Device operation integrity

Openings on the customer side of ATMs are often covered by

mechanical shutters to prevent tampering with the mechanisms when
they are not in use. Alarm sensors are placed inside ATMs and their
servicing areas to alert their operators when doors have been opened by
unauthorised personnel.

To protect against hackers, ATMs have a built-in firewall. Once the

firewall has detected malicious attempts to break into the machine
remotely, the firewall locks down the machine.

Rules are usually set by the government or ATM operating body that
dictate what happens when integrity systems fail. Depending on the
jurisdiction, a bank may or may not be liable when an attempt is made to
dispense a customer's money from an ATM and the money either gets
outside of the ATM's vault, or was exposed in a non-secure fashion, or they
are unable to determine the state of the money after a failed transaction.
Customers often commented that it is difficult to recover money lost in this
way, but this is often complicated by the policies regarding suspicious
activities typical of the criminal element.

Customer Identity Integrity

There have also been a number of incidents of fraud by Man-in-the-

middle attacks, where criminals have attached fake keypads or card
readers to existing machines. These have then been used to record
customers' PINs and bank card information in order to gain unauthorised
access to their accounts. Various ATM manufacturers have put in place
countermeasures to protect the equipment they manufacture from these
threats.

Alternative methods to verify cardholder identities have been tested

and deployed in some countries, such as finger and palm vein patterns,
iris, and facial recognition technologies. Cheaper mass-produced
equipment has been developed and is being installed in machines globally
that detect the presence of foreign objects on the front of ATMs, current
tests have shown 99% detection success for all types of skimming devices.

Figure 4 A BTMU ATM with a palm scanner (to the right of the screen)

PIN Validation schemes for local Transactions

 On-Line PIN Validation

The validation of on-line PIN occurs if the terminal in question is

connected to the central database. The PIN supplied by the customer is
always compared with the recorded reference PIN in the financial
institutions. However, one disadvantage is that any malfunction of the
network renders the ATM unusable until it is fixed.
  Off-Line PIN Validation

In off-line PIN validation, the ATM is not connected to the central

database. A condition for off-line PIN validation is that the ATM should be
able to compare the customer's entered PIN against the PIN of reference.
the terminal must be able to perform cryptographic operations and it must
have the required encryption keys at its disposal. The offline validation
scheme is extremely slow and inefficient. Offline PIN validation is now
obsolete, as the ATMs are connected to the central server under protected
wireless networks.

 PIN Validation for Interchange Transactions

There are three PIN procedures for the operation of a high security
interchange transaction. The supplied PIN is encrypted at the entry
terminal, during this step, a secret cryptographic key is used. In addition
to other transaction elements, the encrypted PIN is transmitted to the
acquirer's system. Then, the encrypted PIN is routed from the acquirer's
system to a Hardware Security Module. Within it, the PIN is decrypted.
With a cryptographic key used for interchange, the decrypted key is
immediately reencrypted and is routed to the issuer's system over normal
communications channels. Lastly, the routed PIN is decrypted in the
issuer's security module and then validated on the basis of the techniques
for on-line local PIN validation.

 Shared ATMs

There are different transaction methods used in shared ATMs with

regards to the encipherment of PIN, and message authentication among
them is the so called "ZONE ENCRYPTION". In this method, a trusted
authority is appointed to operate on behalf of a group of banks so they
could interchange messages for ATM payment approvals.
  Hardware Security Module

For a successful communication between banks and ATMs, the

incorporation of a cryptographic module, usually called security module is
a critical component in maintaining proper connections between banks and
the machines. The security module is designed to be tamper resistant. The
security module performs a plethora of functions, and among them is PIN
verification, PIN translation in interchange, Key management and
message authentication. The use of PIN in interchanges is causing
concerns in security as the PIN can be translated by the security module to
the format used for interchange. Moreover, the security module is to
generate, protect and maintaining all keys associated with the user's
network.

 Authentication and Data Integrity

The personal verification process begins with the user's supply of personal
verification information. These information include a PIN and the
provided customer's information which is recorded on the bank account. In
cases where there is a storage of a cryptographic key on the bank card, it is
called a Personal key (PK). Personal identification processes can be done
by the Authentication Parameter (AP). It is capable of operating in two
ways. The first option is where an AP can be time invariant. The second
option is where an AP can be time variant. There is the case where there is
an IP which is based on both time variant information and on the
transaction request message. In such a case where an AP can be used as a
message authentication code (MAC), the use of message authentication is
made recourse to find out stale or bogus messages which might be routed
both into the communication path and the detection of modified messages
which are fraudulent and which can traverse non-secure communication
systems. In such cases, the AP serves two purposes.
Customer security

In some countries, multiple security cameras and security guards

are a common feature. Consultants of ATM operators assert that the issue
of customer security should have more focus by the banking industry; it
has been suggested that efforts are now more concentrated on the
preventive measure of deterrent legislation than on the problem of ongoing
forced withdrawals.

At least as far back as July 30, 1986, consultants of the industry

have advised for the adoption of an emergency PIN system for ATMs,
where the user is able to send a silent alarm in response to a threat.
Legislative efforts to require an emergency PIN system have appeared in
Illinois, Kansas and Georgia, but none have succeeded yet. In January
2009, Senate Bill 1355 was proposed in the Illinois Senate that revisits the
issue of the reverse emergency PIN system. The bill is again supported by
the police and denied by the banking lobby.

In 1998, three towns outside Cleveland, Ohio, in response to an ATM

crime wave, adopted legislation requiring that an emergency telephone
number switch be installed at all outdoor ATMs within their jurisdiction.
In the wake of a homicide in Sharon Hill, Pennsylvania, the city council
passed an ATM security bill as well.

In China and elsewhere, many efforts to promote security have been

made. On-premises ATMs are often located inside the bank's lobby, which
may be accessible 24 hours a day. These lobbies have extensive security
camera coverage, a courtesy telephone for consulting with the bank staff,
and a security guard on the premises. Bank lobbies that are not guarded
24 hours a day may also have secure doors that can only be opened from
outside by swiping the bank card against a wall-mounted scanner,
allowing the bank to identify which card enters the building. Most ATMs
will also display on-screen safety warnings and may also be fitted with
convex mirrors above the display allowing the user to see what is
happening behind them.

As of 2013, the only claim available about the extent of ATM-

connected homicides is that they range from 500 to 1,000 per year in the
US, covering only cases where the victim had an ATM card and the card
was used by the killer after the known time of death
Uses of ATMs

ATMs were originally developed as cash dispensers, and have

evolved to provide many other bank-related functions:

 Paying routine bills, fees, and taxes (utilities, phone bills, social
security, legal fees, income taxes, etc.)
 Printing or ordering bank statements
 Updating passbooks
 Cash advances
 Cheque Processing Module
 Paying (in full or partially) the credit balance on a card linked to a
specific current account.
 Transferring money between linked accounts (such as transferring
between accounts)
 Deposit currency recognition, acceptance, and recycling

In some countries, especially those which benefit from a fully integrated

cross-bank network (e.g.: Multibanco in Portugal), ATMs include many
functions that are not directly related to the management of one's own
bank account, such as:

 Loading monetary value into stored value cards

 Adding pre-paid cell phone / mobile phone credit.
 Donating to charities
 Purchasing
 Concert tickets
 Gold
 Lottery tickets
 Movie tickets
 Postage stamps.
 Train tickets
 Shopping mall gift certificates

Figure 5 Gold Vending ATM in New York City

Reliability

Before an ATM is placed in a public place, it typically has undergone

extensive testing with both test money and the backend computer systems
that allow it to perform transactions. Banking customers also have come to
expect high reliability in their ATMs, which provides incentives to ATM
providers to minimise machine and network failures. Financial
consequences of incorrect machine operation also provide high degrees of
incentive to minimise malfunctions.

ATMs and the supporting electronic financial networks are generally

very reliable, with industry benchmarks typically producing 98.25%
customer availability for ATMs and up to 99.999% availability for host
systems that manage the networks of ATMs. If ATM networks do go out of
service, customers could be left without the ability to make transactions
until the beginning of their bank's next time of opening hours.

This said, 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 higher value notes as a result of incorrect
denomination of banknote being loaded in the money cassettes. The result
of receiving too much money may be influenced by the card holder
agreement in place between the customer and the bank

Errors that can occur may be mechanical (such as card transport

mechanisms; keypads; hard disk failures; envelope deposit mechanisms);
software (such as operating system; device driver; application);
communications; or purely down to operator error.

To aid in reliability, some ATMs print each transaction to a roll-

paper journal that is stored inside the ATM, which allows its users and the
related financial institutions to settle things based on the records in the
journal in case there is a dispute. In some cases, transactions are posted to
an electronic journal to remove the cost of supplying journal paper to the
ATM and for more convenient searching of data.

Improper money checking can cause the possibility of a customer

receiving counterfeit banknotes from an ATM. While bank personnel are
generally trained better at spotting and removing counterfeit cash, the
resulting ATM money supplies used by banks provide no guarantee for
proper banknotes, as the Federal Criminal Police Office of Germany has
confirmed that there are regularly incidents of false banknotes having
been dispensed through ATMs. Some ATMs may be stocked and wholly
owned by outside companies, which can further complicate this problem.
Bill validation technology can be used by ATM providers to help ensure
the authenticity of the cash before it is stocked in the machine; those with
cash recycling capabilities include this capability.

In India, whenever a transaction fails with an ATM due to network

or technical issue and if the amount does not get dispensed in spite of
account being debited then the banks are supposed to return the debited
amount to the customer within 7 working days from the day of receipt of
complaint. Banks are also liable to pay the late fees in case of delay in
repayment of funds post 7 days.
Figure 6 An ATM running Microsoft Windows that has crashed due to a peripheral
component failure

Fraud

As with any device containing objects of value, ATMs and the

systems they depend on to function are the targets of fraud. Fraud against
ATMs and people's attempts to use them takes several forms.

The first known instance of a fake ATM was installed at a shopping

mall in Manchester, Connecticut in 1993. By modifying the inner workings
of a Fujitsu model 7020 ATM, a criminal gang known as the Bucklands
Boys stole information from cards inserted into the machine by customers.
 WAVY-TV reported an incident in Virginia Beach in September 2006
where a hacker, who had probably obtained a factory-default
administrator password for a filling station's white-label ATM, caused the
unit to assume it was loaded with US$5 bills instead of $20s, enabling
himself—and many subsequent customers—to walk away with four times
the money withdrawn from their accounts. This type of scam was featured
on the TV series The Real Hustle.

ATM behaviour can change during what is called "stand-in" time,

where the bank's cash dispensing network is unable to access databases
that contain account information (possibly for database maintenance). In
order to give customers access to cash, customers may be allowed to
withdraw cash up to a certain amount that may be less than their usual
daily withdrawal limit, but may still exceed the amount of available money
in their accounts, which could result in fraud if the customers
intentionally withdraw more money than what they had in their accounts.

Card fraud

In an attempt to prevent criminals from shoulder surfing the

customer's personal identification number (PIN), some banks draw privacy
areas on the floor.

For a low-tech form of fraud, the easiest is to simply steal a

customer's card along with its PIN. A later variant of this approach is to
trap the card inside of the ATM's card reader with a device often referred
to as a Lebanese loop. When the customer gets frustrated by not getting
the card back and walks away from the machine, the criminal is able to
remove the card and withdraw cash from the customer's account, using the
card and its PIN.
 This type of fraud has spread globally. Although somewhat replaced
in terms of volume by skimming incidents, a re-emergence of card trapping
has been noticed in regions such as Europe, where EMV chip and PIN
cards have increased in circulation.

Another simple form of fraud involves attempting to get the

customer's bank to issue a new card and its PIN and stealing them from
their mail.

By contrast, a newer high-tech method of operating, sometimes

called card skimming or card cloning, involves the installation of a
magnetic card reader over the real ATM's card slot and the use of a
wireless surveillance camera or a modified digital camera or a false PIN
keypad to observe the user's PIN. Card data is then cloned into a duplicate
card and the criminal attempts a standard cash withdrawal. The
availability of low-cost commodity wireless cameras, keypads, card
readers, and card writers has made it a relatively simple form of fraud,
with comparatively low risk to the fraudsters.

In an attempt to stop these practices, countermeasures against card

cloning have been developed by the banking industry, in particular by the
use of smart cards which cannot easily be copied or spoofed by
unauthenticated devices, and by attempting to make the outside of their
ATMs tamper evident. Older chip-card security systems include the
French Carte Bleue, Visa Cash, Mondex, Blue from American Express and
EMV '96 or EMV 3.11. The most actively developed form of smart card
security in the industry today is known as EMV 2000 or EMV 4.x.

EMV is widely used in the UK (Chip and PIN) and other parts of
Europe, but when it is not available in a specific area, ATMs must fall
back to using the easy–to–copy magnetic stripe to perform transactions.
This fallback behaviour can be exploited. However, the fallback option has
been removed on the ATMs of some UK banks, meaning if the chip is not
read, the transaction will be declined.

Card cloning and skimming can be detected by the implementation

of magnetic card reader heads and firmware that can read a signature
embedded in all magnetic stripes during the card production process. This
signature, known as a "MagnePrint" or "BluPrint", can be used in
conjunction with common two-factor authentication schemes used in ATM,
debit/retail point-of-sale and prepaid card applications.

The concept and various methods of copying the contents of an ATM

card's magnetic stripe onto a duplicate card to access other people's
financial information was well known in the hacking communities by late
1990.

In 1996, Andrew Stone, a computer security consultant from

Hampshire in the UK, was convicted of stealing more than £1 million by
pointing high-definition video cameras at ATMs from a considerable
distance and recording the card numbers, expiry dates, etc. from the
embossed detail on the ATM cards along with video footage of the PINs
being entered. After getting all the information from the videotapes, he
was able to produce clone cards which not only allowed him to withdraw
the full daily limit for each account, but also allowed him to sidestep
withdrawal limits by using multiple copied cards. In court, it was shown
that he could withdraw as much as £10,000 per hour by using this method.
Stone was sentenced to five years and six months in prison.