History of Increase
From 1996 to 2002, ATM's (automated teller machines) have been installed at an annual growth rate of 15.5 percent. This compares to a 9.3-percent growth rate from 1983 to 1995. This increase is due to the popularity of installing ATM's in grocery stores, gas stations, airports, movie theaters and numerous other locations outside of banks, not only in the U.S. but around the world. Most banks and credit unions in the U.S. automatically offer an ATM card when you open a checking or savings account.
Convenience
ATM cards are a convenient way of getting cash, making deposits and transfers and checking on account balances. According to the Consumer Information Center, U.S. General Services Administration, ATM's allow consumers to essentially create their own banking hours.
Transaction
An ATM transaction typically involves withdrawing cash from an ATM machine with the use of a bank-issued ATM card. The consumer inserts his card into the machine and enters a personal identification number (PIN) to verify his identity. Once it's determined that there are adequate funds to meet the withdrawal request, your cash is sent out through a slot in the machine.
Purchasing Power
In recent years additional features have been added to many ATM cards so that you may shop with them at merchants that enroll with the same networks. According to MasterCard International, at the present time there is only one international service, (Maestro) that allows the use of ATM cards for purchases at participating merchants both in the U.S. and abroad.
Protection
A magnetic stripe on the back of an ATM card contains your account number and other information that is encoded by the issuing bank. When you use your ATM card, the transaction is electronically safeguarded to protect the privacy of the user. When you enter your PIN into the ATM, it is scrambled electronically and only your bank or credit union can decode it. If your card is lost or stolen, your card is declared inactive. This protects your money from unauthorized withdrawals, and you will subsequently be issued a replacement card.
Fees
There are a number of fees associated with an ATM transaction. The consumer may have to pay a foreign fee to his or her bank if a transaction takes place at an ATM that is not owned by the financial institution that issued the card. The owner of the ATM may also charge the user a surcharge fee.
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