Automatic teller machines at 200 sites in N.Z.

Press, 1 October 1983, Page 21

Automatic teller machines at 200 sites in N.Z.

By

NEILL BIRSS

The W'estpac Banking Corporation will introduce automatic teller machines on October 31, taking the total number of ATMs in the country to more than 200. The public are beginning to use the machines with enthusiasm. The Canterbury Savings Bank’s ATM at its Colombo Street branch was used for 10,000 transactions during August. “The machines have been extremely successful,” says Mr R. O. Young, the assistant general manager, administration, of the bank, which has 10, including one each at Nelson and Blenheim. The trustee savings banks now have more than 90 ATMs installed throughout the country, and new machines are being installed each month. The United Building Society, the first organisation in the country to install the machines, has 39; Autobank, which serves the Bank of New Zealand and the Australia and New Zealand Banking Group, has 18; and the Anytime Corporation has 45. Anytime ATMs are being used by the Post Office Savings Bank, the Countrywide Building Society, Broadbank, Marac, the Southern Cross Building Society, and the Southland Building and Investment Society. The National Bank will begin setting up its network of ATMs in the first half of 1984. The ANZ/BNZ network is run by Databank, the trad-ing-bank-owned firm which processes the country’s cheques and inter-bank transfers. It will also handle the National Bank network and Westpac’s. Databank has grown into a big enterprise, employing about 1300 people and using 17 computer centres. Cheques and other bank transfers still make up a proportion of its work (in March of this year it processed 365 million paper documents, mainly cheques, automatic debits and credits). But the emphasis is moving steadily towards online work. Already, Data-

bank has more than 3000 terminals on-line throughout the country. The trustee savings banks are still running their ATMs separately, but a national network is expected towards the end of October or early November, meaning Canterbury Savings Bank depositors will be able to withdraw funds from their accounts using ATMs at, say, Auckland. The trend is to longer hours, but according to one bank’s spokesman, an Australian survey showed that more than 90 per cent of transactions on ATM? were made between 10.30 a.m. and 7 p.m. The various networks of ATMs are now vying in the services they offer. The early introduced United machines, for example, offer cash withdrawals and deposits and account balances. But the new Westpac Handybank service will give the user a much wider range of choices including payment from account, cheque book request, and allow the customer to nominate which of his or her accounts the transaction is to be based on. It will even allow transfers between accounts.

Customers of ATM networks receive a card and a personal identification number (PIN). The number is closely guarded, and bank staff are not supposed to know it. To make a transaction, the customer inserts the card in the ATM, and then keys in his or her PIN. The thief with someoneelse’s card cannot get funds without knowing the person’s PIN. Most of the machines also “swallow" the card after three failed attempts to key in the PIN. The banks pay heavily for their machines. A typical ATM will cost $70,000, and $5OOO to install. They are virtually only tellers, with modems and lines needed to central computers, whose costs must also be contributed, too. Thus more than $2O million worth of ATMs have been installed already in New Zealand, without taking account of central processing costs.

Older bank customers sometimes worry about the security of using cards. But banks generally say that, provided customers heed their advice not- to write PIN numbers on cards or card containers, the deposits are secure. One further risk is if a card is lost and a finder were to telephone the card owner and lie that it is the bank calling, and then ask for the PIN name. (Banks will never make such a call.) The National Bank plans to avoid this potential problem by not having names on its new cards. The ATMs offering afterhours service at bank branches are the forerunners of a much wider automatic service. Undoubtedly point-of-sale ATMs will spring up in supermarkets, malls and airports. When the unions are won over, they will probably appear inside banks, too, allowing some routine enquiries to be made without consulting staff. The ATMs are made possible by a magnetic-stripe in the user card, allowing them to identify the customers at the keyboard. This technology is now outmoded compared with the “smart card” being pioneered in France and America. The smart card has its own microchip, and it can store details of transactions which can be read out later. The smart card, or chip card, can be read only with complex equipment that is near impossible to forge. In French experiments, retailers are using special electronic cash registers that capture from the card details about the customer and the transaction. These details are forwarded to a central processing centre at the end of each day. When a suitable chip with sufficient memory is available, according to “Fortune” magazine, a chip card, as well as itself recording details of the customer’s various transactions, will be able to serve as a birth certificate, driver’s licence, and carry other records.