Following are some of the delivery channels available to banks for providing service

to customers
Brick and mortar branches (most expensive)
ATMS (considerably cheaper)
Net banking (even cheaper)
Mobile banking (least expensive)
Banking Correspondents
ATM is meant to provide services on a 24 X7 basis.
ATMs started out as cash withdrawal machines
ATMs helps to increase customer satisfaction by providing the services of
cash withdrawal service at a large number of locations
beneficial to the bank as the cost of installing and maintaining an ATM is
much lower than maintaining a branch.
Functions available in ATMs
Cash withdrawal
Account information
Cheque deposit
Cash deposit
Cheque book request
Regular bill payment
Purchase of recharge vouchers for mobile phones
Procurement of mini or short statement
Loan account enquiry
Contribution to charity and provision of donations

ATM - PIN

Security is provided by way of a PIN.

. The characteristics of PIN are as follows:
It is a four-digit number
Most banks require customers to change it on first use

 It is blocked if the customer makes three attempts to use the card with a
wrong PIN
It can be compared to customers physical signature.
It is not for sharing with others.
ATM operations
1. Customer inserts the ATM card into the ATM.
2. PIN is keyed in and transaction type is selected.
3. The ATM transmits the details to the switch that sends the card number and
the PIN to the Host Security Module (HSM). HSM generates PINs for new
accounts and verifies when customer uses an ATM.
4. On receiving confirmation from the HSM that the PIN tallies with the card
number, the switch sends a message to Core Banking Solution (CBS) to debit
the customers account.
5. On getting the confirmation about the debit from CBS, the switch sends a
message to the ATM to dispense cash.

ATM card usage

Cards issued by banks in India may be used at ATMs of any bank within the
country.
Savings bank account holders can execute a maximum of five transactions
for free at other banks ATMs in a month (subject to change)
This includes all types of financial and non-financial transactions, beyond
which the customer can be charged by their bank.
Daily Cash Withdrawal Limits
The bank that issues the card sets the minimum and maximum cash
withdrawal limits per day.

These limits are displayed at the respective ATM locations.

The maximum limit per card is fixed to protect the customer against
unauthorized withdrawals.
Another purpose of limiting cash withdrawals is to ensure that the ATMs do
not run out of cash, fast.
Usually cash is replenished in ATMs only once a day or once in two days.

National Financial Switch(NFS)

 NFS is a national infrastructure with pan-Indian presence provides a switching

service for connectivity across ATMs of banks.
The National Financial Switch facilitates routing of ATM transactions through
inter-connectivity between the Banks Switches, thereby enabling the citizens
of the country to utilize any ATM of a connected bank.

In respect of all domestic transactions interchange

Visa/MasterCard need not be paid since NFS handles it.

charges

to

NFS has been implemented by the NPCI ltd which is an umbrella organization
for retail payments.
RuPay Card Scheme
RuPay is an Indian domestic card scheme conceived and launched by the
National Payments Corporation of India (NPCI).
It was created to fulfill the RBIs desire to have a domestic, open loop, and
multilateral system of payments in India.
RuPay facilitates electronic payment at all Indian banks and financial
institutions, and competes with MasterCard and Visa in India.

NPCI maintains ties with Discover Financial to enable the card scheme to
gain international acceptance.

RuPay cards are accepted at all ATMs across India under NFS,
under the NPCI's agreement with DFS, RuPay cards are accepted on the
international Discover network.

There are around 145,270 ATMs and more than 875,000 PoS terminals in
India under the RuPay platform.

RuPay cards are accepted at all PoS terminals in India.

To enable this, RuPay has certified 25 major banks in India to accept the
RuPay card at their respective PoS terminals located at different merchant
locations.

ATM Frauds

 Skimming, still the most frequent type of attack reported, uses devices
(skimmers) to capture cardholder data from the magnetic stripe on the
TRACK2 information on the magnetic stripe of the card.
a skimming device is installed over the top of the ATMs card reader,
sometimes installed inside the ATM. The skimmer will capture card data prior
to the ATM card reader, the data will be stored and transmitted to attackers.
The skimming is often combined with other devices, cameras, and a fake
keypad to capture the PIN number.
ATM Frauds
Currency trapping, fishing used to steal the cash, it can be through a false
dispenser (trapping attacks) or using wires, probes to prevent cash being
dispensed (fishing), the attacker will retrieve the cash as soon as the
consumer leaves the ATM.
Transaction reversal, attempt to create an error condition at the ATM resulting
in a transaction reversal due to reported inability to dispense cash.
ATM Frauds
Physical attacks are usually perpetrated to gain access to the cash and all
valuable ATM components such as the safe, the top hat, presenter and
depositor or in some other cases, the entire ATM. Depending on the
component targeted, the attacks can be described as below:
Because it contains the cash, the safe is still the first common target. The
perpetrators efforts concentrate on the locks, handles and hinges of the safe.
ATM Frauds
In some cases the top hat is targeted to steal the ATM hard drive or for
attaching skimming devices or USB devices to download malware.
The presenter and depositor can be subject to attacks where perpetrators
attempt to access an ATMs cash sources (deposits)
Therefore they will use several methods: cutting, drilling, burning devices
(torch), pulling the safe door, using bombs and other explosive devices.
Other physical attacks will attempt to remove the ATM, and move it to
another location, ramming the ATM with a car or truck, pulling it using a chain
and a car, or lifting it from its foundation with forklift.
ATM Frauds
Securing the ATMs infrastructure becomes one of the most challenging tasks.
The process requires business, IT and third party vendors involvement.

 ATM security is a combination of physical security, which is basically how to

secure the assets, logical security, or how to protect operating systems from
malware, and finally the fraud from skimming attacks.
Contactless cards
Contactless payment systems are credit cards and debit cards, smart cards or
other devices, including smartphones and other mobile devices, that use
radio-frequency identification (RFID) or near field communication (NFC) for
making secure payments.
The embedded chip and antenna enable consumers to wave their card, fob,
or handheld device over a reader at the point of sale terminal.
As with all payment devices, contactless cards have a number of security
features. Contactless runs over the same chip and PIN network as normal
credit and debit card transactions
EMV cards
EMV -- which stands for Europay, MasterCard and Visa -- is a global standard
for cards equipped with computer chips and the technology used to
authenticate chip-card transactions.

In the wake of numerous large-scale data breaches and increasing rates of

counterfeit card fraud, all. card issuers are migrating to this new technology
to protect consumers and reduce the costs of fraud.

If someone copies a mag stripe, they can easily replicate that data over and
over again because it doesn't change
Unlike magnetic-stripe cards, every time an EMV card is used for payment,
the card chip creates a unique transaction code that cannot be used again.
If a hacker stole the chip information from one specific point of sale, typical
card duplication would never work "because the stolen transaction number
created in that instance wouldn't be usable again and the card would just get
denied.
EMV technology will not prevent data breaches from occurring, but it will
make it much harder for criminals to successfully profit from what they steal.
White label ATMS
Traditionally, Automated Teller Machines (ATMs) have respective banks logo. So just
by looking, we can identify a particular banks ATM,
But White label ATM do not sport Bank logo.
RBI has given license / permission to non-bank entities to open such ATMs.
Any non-bank entity with a minimum net worth of `100 crore, can apply for white
label ATMs. (not just NBFC, any non-bank entity can apply.)

Late 80s: first ATM in India;

2012: RBI issues guideline for White label;
2013: RBI gives license/permission.
Tata Communications Payment Solutions Limited is the first company to get RBIs
permission to open White label ATMs.
They started their chain under brand name Indicash.
Brown label ATMS
When banks outsources the ATM operations to a third party.
The private company owns & operates the ATM machine, pays office rent.
They negotiate with the landlord, electric company, telecom company and so
on.
The bank (which has outsourced this work) provides cash for that ATM.
ATM sports logo of that bank (which has outsourced this work).
RBI not involved directly.
These outsourcing
respective banks.

companies

have

contractual

obligation

with

their

ATMS
On September 2, 1969, Chemical Bank installed the first ATM in the U.S. at its
branch in Rockville Centre, New York.

The first ATMs were designed to dispense a fixed amount of cash when a
user inserted a specially coded card.

As on date India has around 2.00 lakh ATMS