Page 2: Creating an ATM system in the UK
Today the UK’s ATMs are linked together through the LINK network. LINK is a system joining together 40 of the UK’s major financial institutions (banks, building societies and independent ATM operators). In the modern world in which customers dominate the way in which services are provided, it is essential that account holders in any bank or building society are able to access their money at the most convenient location. The creation of LINK means that a Halifax account holder, for example, is able to withdraw cash from an ATM belonging to any one of the other members of LINK.
Although the concept of a shared cash machine network is simple, the technology behind LINK is amongst the most sophisticated in the world. LINK has two computer systems – a central computer system and a back-up or disaster recovery site. Both systems are so powerful that each is capable of processing 10,000 transactions every minute.
When a LINK cardholder requests money from a LINK machine, a message is sent via LINK to their bank to make sure that their Personal Identity Number (or PIN) has been entered correctly and that the cardholder has sufficient money in the account to cover the withdrawal. These messages are transmitted in 'real time' to ensure the tightest security. Speed is of the essence and LINK is able to verify within seven tenths of a second that a Bank A customer seeking to withdraw cash from a Bank B ATM has input correct details and that they have the funds in their account. LINK also calculates the settlement amount to be credited or debited from each member bank or building society to cover the value of cash machine withdrawals during the previous day. Because it is a closed network, the overall settlement has to come to zero every day.
LINK is a company limited by shares. The 40 financial institutions which use its services are the key stakeholders, although only 22 of them own the company. LINK has two Boards: The Company Board (owners) controls the overall direction and running of the company. The Network Board consists of representatives from each financial institution and meets bi-monthly to establish the ground rules for shared transactions and the arrangements for LINK membership. It is important to remember that only about 40% of ATM transactions involve LINK because the remaining 60% involve customers of a particular bank using the ATM facility of their own bank. LINK only handles the shared transactions but there are about 86 million of these each month and the numbers are steadily rising.
Cash machine technology has improved over the years and many of today’s machines are now available 24 hours a day, 365 days a year. 94% of machines in the UK are now full function, with only 6% being simple cash dispensers. This means that almost all cash machines offer cash withdrawals, balance enquiries and will produce a receipt either on demand or automatically. Other services include the ability to order a chequebook, PIN change and account to account transfer, although these services are typically only available on a customer’s own bank machine. Colour screens are increasingly regarded as a standard requirement as is full graphic capability. Chip card readers are now being incorporated into both new and existing machines to enable the reloading of electronic purses and new initiatives in the future. Looking even further to the future, biometric (iris or fingerprint recognition) testing has been underway for several years to improve security.