So, What Does ATM Stand For?
Automated Teller Machine? Wrong. Try Asynchronous Transfer Mode, a
network protocol.
Citicorp introduced the first ATM machine in 1971. Ten years
later, there were 20,000 in the United States alone. By 1990, that
number had quadrupled to more than 80,000 and more than 80 percent of
customers used ATMs for half of their bank transactions.
As you probably remember, ATMs were initially placed in banks,
were human tellers normally would be. Quickly, it became apparent
that the key to ATM success was to place ATMs where there was not a
bank. Soon, ATMs were popping up at grocery stores, race tracks,
casinos, movie theaters, airports, restaurants, and malls. Banks were
able to re-deploy their human resources by employing them to open
accounts, explain services, or make loans.
In 1994, *Computer Reseller News reported that the ATM card
market was expected to rise from $15 million in 1993 to almost $170
million in 1997. Well, it's 1997 and they were a little off. AT&T
Global Information Solutions reports the market to be $415 million.
Nevertheless, ATMs have had a lot of growing pains. For example,
in December 1994 Love Lee, of Queens, New York, made headlines when
he withdrew $5,900 at an ATM machine-$5,900 more than he had in his
account. Mr. Lee faced a $100,000 fine and a year in jail; it was a
federal case.
Other issues have caused problems, such as safety, security, and
cost. A study by Audits & Surveys Worldwide reported in December
that the percentage of people concerned about ATM safety went up from
12% in April 1996 to 21% in October 1996.
Today, consumers nationwide are expressing dissatisfaction with
ATM fees. In late February, Conrad Hewit, California Superintendent
of Banks, defended ATM fees. He was quoted in the San Francisco
Chronicle as saying, "Without fees from ATMs, banks will not
be as profitable, causing them to be financially unsafe and
unsound." He also argues that the fees are needed to pay for the
purchase, maintenance, and repair of ATMs. But, consumer groups argue
that there is not a basis for a surcharge on ATM transactions. In
fact, Consumer Reports found that there were more than 100 different
fees charged by banks, in March of 1996.
Fortunately, with the increased ATM fees there are increased
services, although not everywhere. ATMs are now capable of cashing
paychecks (albeit with limitations, such as pre-approval) and
dispensing stamps. Also, a press release in January announced a
research program by the Public Communication Networks Group of
Siemens AG, and Newbridge Networks and Broadband Networks Inc., to
address the digital wireless market for ATMs.
So, then the growth of ATMs will continue unabated, as we approach
the Millennium. Well, perhaps not. With the ever declining cost of
checks and the advent of cyber cash, stored value cards and, if
retailers have it their way, low cost debit, it is not unforeseeable
that ATMs will soon begin to dwindle. As cash becomes increasingly
uncommon, who will need an automatic teller machine, uh, Asynchronous
Transfer Mode, to dispense the cash?
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