The world's first automated teller machine was installed in a branch of Barclays Bank in London back in 1967. Since then, ATMs have made it quick, easy and convenient for consumers to quickly get cash in their hands. There is a price to pay for this convenience. Naturally, ATMs don't have the human element you'll encounter with a teller. If there's a problem, you can't talk it out with the machine. Beyond that, ATM use can be costly, and can leave cardholders vulnerable to fraud and theft.
Criminals can fit skimming devices and small cameras to ATMs. These machines record account details and personal identification numbers, which the crook uses to withdraw money from those accounts. ATM skimming costs the U.S. banking system around $1 billion each year, or $350,000 a day, according to the Secret Service. In January 2012, Mike Urban, director of product management for Fiserv's Financial Crimes division, told "Bank Info Security" ATM skimming had reached "epidemic" levels and continued to grow.
Banks and machine owners draw a huge source of revenue from ATM fees. Cardholders can usually withdraw cash for free from ATMs owned by their bank, but typically have to pay to use machines owned by other companies. In 2011, the average fee was $2.40 according to Bankrate.com's Checking Survey.
If you go to a bank, you're likely walking into a secured area watched by multiple cameras or a life guard. Those elements encourage crooks to keep their distance from the bank. You'll find no such security blankets with an ATM. It also takes a little time to take a card out, insert it in the machine, access your account and get your cash. That can be enough time for a crook to attack, which is why some people won't use an ATM after dark or in secluded locations.
ATMs give, but they can also take. They can malfunction and simply not be available when you need them. Some will also retain damaged cards, or any card if its owner fails to enter a correct PIN after three attempts. A cardholder can usually reclaim her card if it's been retained by a machine owned by her bank. However, if the card is kept by another bank's ATM, there's no guarantee she'll ever see it again.
- BBC: The Man Who Invented the Cash Machine
- Alabama Cooperative Extension System: The Pros and Cons of ATM Banking
- Federal Reserve Bank of New York: ATM Surcharges
- Visa Security Summit 2012: Role of Regulator in Securing Payment Card Systems
- Bank Info Security: 2012: Year of the Skimmer
- CBS: U.S. Secret Service: ATM Skimmers Are Scamming More People Than Ever
- Bankrate.com: ATM Fees March Upward in 2011
- Goldsmiths University: Black Box Testing
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