Federal Reserve Bank of New York,
Citation Information: Review of Network Economics. Volume 2, Issue 2, Pages –, ISSN (Online) 1446-9022, DOI: 10.2202/1446-9022.1023, June 2003 Publication History:
Automated teller machines (ATMs) have altered the relationship between banks and their depositors, as well as the competitive relationships among banks. In this paper, I survey the literature to describe the ways that ATMs have influenced these aspects of banking markets, and conclude with suggestions for further research.
This chapter reviewed the available literatures written on this topic and in other related areas in this chapter. This was made possible by the identification, collection and review of these literatures from various sources such as text books, journals, reports and the internet. 2.2The Concept of ATM
ATM is typically made up of the CPU for controlling the user interface and transaction devices, magnetic or Chip card reader for identifying the customer, display which is used by the customer for performing the transaction, function buttons usually close to the display or a Touch screen used to select the various aspects of the transaction and a record printer which provides the customer with a record of a transaction (Cronin and Mary, 1997). Most ATMs are connected to inter bank networks, enabling people to withdraw and deposit money from machines not belonging to the bank where they have their account or in the country where their accounts are held thus enabling cash withdrawals in local currency (Maxwell, 1990). They are often identified by signs above them indicating the name of the bank owning them. 2.2.1Evolution of ATM
ATM is said to have evolved from early cash dispenser and is said to have first been introduced in the early 1970’s. The dispensers were operated by a token inform of a punch card. This enables a customer to withdraw as sachets of suitable values of bank notes. These sachets processes and then return the card to the customers. Another source has it that ATM concept was started around 1967, and that it was first installed in Endfield town, on the London Borough of Endfield by Barclays Bank. Thomas (1996). This is said to have been accredited to John Shepherded Baron, although George Simon registered patent in New York and Don Wetzel and two other Engineers from Docatel Company also registered patent in June/ April 1973. Brendan (1996). This in the second generation was improved to the extent that made it possible to count proved money. 2.2.2Operation of ATM
ATMs typically connect directly to their ATM Controller via either a dial-up modem over a telephone line or directly via a leased line. Leased lines are preferable because they require less time to establish a connection. Musiime and Biyaki, (2010). It is observed that, 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. Security is provided by the customer entering a personal identification number (PIN). For one to access ATM service, he/ she (the card holder) has to insert the card (magnetic strip card) into the machine (ATM), which then reads the strip and makes contact with the central computer to confirm the genuity of the card which is either accepted rejected depending on whether it is valid or not. When accepted, the customer then punches his/ her PIN number which is then verified according to its compatibility with the information stored in the card. After which it then perform the service requested of like (issuing cash, accepting cash/ cheque deposit, balance enquiry, mini-statement) etc, and finally ejects the card. 2.3Effectiveness of ATM
Without usage of technology the banking sector cannot provide customers with effective services...