ATM Networks: The Magic that Makes it Happen

ATM Networks: The Magic that Makes it all Happen

ATM Networks

In a regular bank setting, we would walk up to the teller, request our cash, and then it would be counted by the teller and handed to us. We walk away assured that the teller debited our account for the correct amount.

A typical ATM transaction allows the cardholder at the ATM machine to withdraw funds from an account or deposit funds to an account. As a user, if withdrawing funds, we take our cash and walk away from the machine, never giving a thought as to what went into making the transaction happen. Little does the user know there is a network communicating all of the transaction information behind the scenes.

How Does an ATM Network Work?

ATMs operate through a network; most are commonly connected to an interbank network. These networks make it possible for a person to perform a transaction at an ATM that does not belong to their bank, and in some cases, out of the country where their bank is located. There are many types of interbank networks, including Cirrus, PLUS, NYCE, STAR, PULSE, BancNet, AFFN, among others.

Once a transaction is performed at a machine, the network communicates the information to the proper bank, where the information is recorded to the user’s account. The communication with the network happens much like our home computer would with an internet connection. Most ATMs connect to a host, or sometimes known as an ATM Controller, through an asymmetric digital subscriber line (ADSL) or through a dial-up modem, which would be run through a phone line. If using the dial-up modem method, this is usually a specifically designated or leased line, rather than sharing a telephone service line. The method that an ATM owner chooses to use should be based on the amount the machine is being used. If the machine is being continuously used throughout the day, a dial-up modem might be slower and not the most efficient way to get the user’s the quick cash they are looking for. After all, you want the customer to keep coming back and using your machine.

As technology advances, many new ATM owners are now using connections through virtual private networks (VPN), or commonly known as a high speed internet connection and new wireless devices such as cellular networks using dedicated wireless devices hidden in top of the ATM. There are still older methods of communicating to a bank that are still in use; some of these include Async, which is short for asynchronous communications, where transactions are communicated intermittently to the bank versus the immediate moment the transaction is completed; and Systems Network Architecture (SNA), which to date itself, was created by IBM in 1974, and is a method that interconnects the ATM with the bank.

All of this may be irrelevant for someone in a hurry, running in to the local convenient store to get the $40 they need for the night; but nonetheless, it is the network communications of the ATM and the bank that are making the transaction possible for this rushed money grabber.

If you plan to own and operate ATM Machines as a business or in your business, the cheapest way to access the ATM Networks via your ATM processor these days is to simply add the ATM to your high speed internet connection. A slow connection or high noise on the line may cause errors so consult your ATM company or your computer people prior to determining the best communication method. We are seeing most new ATMs deployed these days are using the latest wireless communication systems which are available for lease for less than the cost of a phone line. Ask your ATM company about the wireless communication options available for your ATM.

ATM Operating Rules and Regulations

Rules and Regulations of Operating an ATM

ATM Operating Rules and Regulations

As with most transactions dealing with banking, there are rules and regulations that must be followed. Operating an ATM (automated teller machine) is no different. If the machine is located on a bank’s premises or operated by the bank at different locations, both state and federal rules and regulations will apply. For privately owned ATMs, there are still regulations, but they vary from those of banks.

ATM Operating Rules and Regulations for a Bank Operated ATMs?

  •  Video Surveillance:  Banks using an analog video surveillance system must follow federal law requirements. The systems must use videotape that is of commercial or industrial grade. It is recommended that the tape only be used one time from beginning to end and within a 30-day period. Once the tape is full, the bank must retain the video surveillance for a period of at least 45 days. After this time, the tapes can be recorded over, but should not be used more than 12 times. Many ATMs are now sold with a built in surveillance system, most of which are digital recording systems.
  • Safety Regulations:  U.S. Federal Laws are in place for banks operating an ATM, mainly the Federal Electronic Funds Transfer Act and the Bank Protection Act. These laws are in place for security purposes; however, the laws address the security of the ATM itself, not the safety of the user. Although they must still abide by the U.S. Federal Laws, many states have but their own regulations into place for the safety of their customers. States such as, California, Florida, and New York, to name just a few; have passed laws of security standards for ATM operators. Standards have been set for lighting, visibility, security, and landscaping at ATM locations.
  • Fees: According to the Electronic Fund Transfer Act (Regulation E), the owner of an ATM was required to both post a physical notification and an on-screen notification that a fee is charged for providing the service of its machine. The physical notice was to be posted on the machine or somewhere visible to a user at the machine. This was most commonly in the form of a sticker on the ATM. On December 20, 2012, the December 2012 Statutory Amendment was approved, which only requires the on-screen disclosure now. Most ATMs still post the physical notice, but are no longer required to do so. Unlike the posted notification, an on-screen notification of fees must include the dollar amount of the charge. This notification offers the user to accept and continue the transaction or to deny the fee and end the transaction.

These are just some of the simple, most common regulations in place for bank owned ATMs. For more detailed information on these and other laws, you can research the Electronic Fund Transfer Act (EFTA), the Federal Electronic Funds Transfer Act and the Bank Protection Act, and U.S. Federal Laws regarding ATMs.

ATM Operating Rules and Regulations for Non-Bank Owned ATMs?

Non-bank owned ATMs have a different set of ATM operating rules and regulations to follow; and are a lot simpler.

  • These machines are only allowed to dispense cash; no deposits are accepted at these locations.
  • They must display, on the ATM, the logos of the types of cards that are accepted at their machine.
  • The owners of the ATM can charge customers a fee for their transaction; however it must clearly be posted at the machine as well as on-screen during the withdrawal transaction.
  • All non-bank owned machine owners are required to file an annual notice of ownership which is typically done through the ATM processor they signed up with.
  • Some States have their own set of non-bank regulations, check with your ATM Company to be sure they manage this process for you.

How Can an ATM Machine Attract Business?

We have all been in the situation where we have run out of money and need to fill our wallets or purse with cash. Credit and debit cards are almost accepted everywhere but nothing is better than having physical cash. Install an ATM machine to attract business and you can help provide people with easy access to cash.

Did you know that there are a variety of ways to attract business and make more money when you install an ATM machine into your business? Businesses owners are unaware of the benefits of owning an ATM machine.

 What are the Benefits of having an ATM?

How Can an ATM Machine Attract Business?

ATM machines are great additions to a business because they can naturally attract customers inside. When a sign is posted outside indicating that an establishment has an ATM machine you draw in more people to visit your store.

People will casually walk in just to get some cash and often will make a small purchase. This can help increase business since a lot of people will visit in a given day just to withdraw some cash.

Psychologically, immediately after someone withdraws funds and has cash in their pocket, they are more likely to spend it right away. Spontaneous shopping happens more often after a person adds more money to their wallet.

It is very common that once people get out cash using your ATM they feel the urge to spend some of the money they just withdrew, this often leads to impulse buying which would be spent in your store..

One cleaver trick that works well is to place the ATM machine in an area of the store where you often display specials or bargains you’re promoting, this encourages spontaneous shopping.  Small businesses find that after an ATM machine is installed they make hundreds of dollars in profits every week as a result.

Large businesses and certain types of businesses notice profits often increase dramatically from having an ATM machine available. Most of the time when people withdraw cash they like to break it down into smaller bills. When receiving a few twenties that an ATM typically dispenses customers like to have smaller increments and are likely to make a purchase to facilitate making change.  Customer that withdraw money are therefor more likely to buy something from your store if they need to break down a large bill.

Convenience stores, small markets, and similar businesses can profit considerably from many small transactions a day. A customer is more likely to purchase additional items when they need to break down larger bills so the potential to earn increases.

As the owner or operator of an ATM you also profit from the commission you receive on every ATM transaction that takes place on your machine. So even if people do not spend any money inside your business you are still generating a profit from the small space an ATM uses.

Customers opt for an ATM machine as opposed to using credit cards more often to avoid credit card charges and interest payments. Between 40% – 70% of credit card charges performed are done with a bank debit card and merchants are paying a high percentage to accept this type of payment. Offsetting Credit Card Fees alone is another way to convert fees paid into money made.

An ATM machine is a profitable investment for a business in many ways. If a community or shopping area lacks ATM machines and you install one, other businesses will send people into your store when their customers ask where the closest ATM machine is. You’ll be the business that has the solution to everyone’s need for cash.

Consider installing an ATM machine to help your business attract more customers and produce more profits daily, weekly, and monthly. You’ll be surprised at the amount of additional income once you add a new machine to your business, just remember to make people aware of its presence.

How to Increase Security for an ATM

Increase Security for an ATM

How Can You Increase Security for an ATM and Safeguard Against Theft?

We all know ATM’s are like candy to would be thieves, but that doesn’t mean your ATM has to be a target. People target these machines because they are small and they think they store a lot of money.

In reality most merchant owned free standing ATM’s (the ones in stores) don’t contain much cash and many store owners remove the cash each evening like a cash register.

As a store owner or ATM operator, there are certain precautions you can take to limit the chance that an ATM is stolen or broken into and increase security for an ATM.

It’s easy to ad a camera  monitor for your ATM machine to ensure that it puts a person at risk if they try and steal money from it. The more measures you take to secure your machine the less likely someone will attempt to steal money out of it.

  • Install surveillance cameras around your ATM. No one wants to be spotted on camera. Put one directly on top of the machine and another in a location that has a good view of the ATM. These camera systems are inexpensive and work great.
  • Hang a sign up in the area to let people know that it is under constant surveillance. Thieves will think twice before making an attempt to steal from the ATM when cameras are around. Several higher end machines come with cameras installed inside to help lower the chance of theft.  The some of the new Genmega series ATMs have surveillance deterrents pre-installed at the factory.
  • Put your ATM near a brightly lit area. The more lit the area where the ATM is located, the less chance someone is going to try and break into it. Make sure that the area directly above the machine and surrounding area has the proper lighting. This will also help customers feel more at ease when completing a transaction. No one wants to withdraw cash from an ATM in an area that is dark. Added security to a machine can help protect the money inside and help draw in customers.
  • Place the machine inside of your store. Properly secure windows and doors to prevent people from trying to break in and remove cash each evening like a cash register.
  • Install an alarm in your store so if someone tries to get inside they will trigger it. Your machine should be more secure if it is inside your business. An alarm usually makes criminals move to the next target where they don’t have alarms. Alarms are inexpensive these days and go a long way to make would be criminals think twice about breaking into your business to steal your ATM or any other valuables inside for that matter.

Protecting your investment is just good business. You do not need someone stealing from your ATM. Make sure your installer properly secures your machine to the floor or wall. Make sure the area surrounding your establishment is well-lit, and if you own and operate your ATM machines, simply remove the cash when you close and leave the safe door open is the best security measure. If the ATM in your store is operated by someone else, most of the suggestions above deter criminal activity. A few small protective measures is all it takes to increase security for an ATM and protect your valuables.