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In European countries the banks issue chip-based smart credit cards to their customers as it is difficult to clone such cards. The encrypted account information is stored and embedded deep into the microchip in addition to magnetic strip on the card. The smart cards with microchips can not be used at POS as every time you will have to authorize the transaction with PIN code. Cards without the duo PIN and CHIP technology could be swiped at the POS without getting noticed or fraudulent people could clone the by reading the data from magnetic strip alone through gadgets available in the grey market. Now even if you card is cloned by such unscrupulous elements the transaction will require PIN number, exclusively known to you only, to get the transaction authorized.
Taking a clue from other developed countries, the RBI has also made it mandatory to replace the old, fraud prone, easy to hack magnetic stripe cards to better secured PIN and chip technology.
It is a matter of discussion amongst consumers, retailers, banks as to who shall bear the loss due to credit card frauds. If retailers and bankers do not share the liability then the consumers will shy away from creating transactions with their credit cards as the consumers will not rely upon payment system solutions. It is possible only if the banks and retailers shift to PIN and CHIP technology which is likely to increase the costs of the smart cards to the banks to oblige their existing credit card holders by replacing their old cards with the PIN and Chip technology supported cards. Not only banks but retailers using POS terminals will also require getting the machines upgraded which can read the micro chip on the cards. These additional costs are necessary so as to protect the millions of consumers from whom both the Banking and Retail industry is drawing their profits. They can not afford their consumer in high and dry condition and at the mercy of criminals.
Almost all the card with the logo of MasterCard, Visa and American express or even Discover have now been shifted to PIN and Chip Technology in a phased manner and if the retailers do not get their POS payment terminals upgraded immediately to read smart cards, they are likely to loose their consumers. The retailers will have to put up clear cut signboards that they accept Smart Cards with PIN and Chip Technology.
No doubt smart cards will help in reducing credit card frauds at the point of purchase or point of sales but even the PIN and Chip technology will not eliminate the chances of frauds as account number of the consumer can still be used to purchase online or on mobile purchases where the card is not required to be presented. In the future there may be development of technologies to even to block the credit card frauds through online or mobile purchases.
Opinion of the Author:
To reduce the incidence and quantum of losses due to credit card frauds the issuer bankers need to take the following steps:

Within the overall Credit Limit of the Credit Card, the consumer be allowed sub limit per transaction while using the credit cards at POS or POP terminals.
For every transaction above the minimum sub limit let the consumer receive the OTP, one time password or PIN on his smart phone to go ahead with the transaction above the sub limit during one session.
Even consumers are deceiving the credit card issuers by converting their transactions in to cash from POS owners. The consumer will go to just say 10 petrol pumps in the close vicinity and after making transactions at every POS the consumer will get it converted to cash as POS owner will also like to do away with the heavy cash so as to avoid visiting their bankers. The smart consumer will use the credit for minimum say 45 days and go on repaying and cashing time and again to use the full credit card limit for conversion into cash at free of interest cost.

Know more about Credit Card utilities and importance of CVV as CVV number can facilitate online and mobile credit card frauds even if the card is with PIN and CHIP technology. Smart Cards eliminate chances only at POS terminals.

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What is an ATM?
An automated teller machine or ATM may be described as a machine that allows customers of banks to access their bank accounts without help of a cashier or a teller 24*7*365. Customers can withdraw cash, transfer funds to other accounts, get to know the balance available and get a statement of account for last couple of transactions.
ATM can identify the customer when he inserts plastic card with a magnetic stripe or card with a chip containing useful data. Now a days biometric ATM s are also available which can read the thumb or finger impression.
All the transactions need further authentication by customer by way of putting in the personal identification number PIN. Many further innovations in the functioning of ATM s are happening including operation by mobile phone.
When was first ATM operational?
It all began in 1961 when a machine called Bankograph was installed by CitiBank of New York for accepting automated envelope deposit containing coins cash or cheques. It did not dispense cash and hardly lasted six months as customers did not show any interest.
In 1969, Chemical Bank installed first ATM in the US in New York. This machine dispensed fixed amounts of cash when customer inserted his coded card. Here magnetic coding was introduced for the first time. This was designed by Donald Wetzel & was called Docuteller.
In 1972 Lloyds Bank installed IBM 2984 Cash Issuing Terminal which was perhaps the first modern ATM.
When was first ATM installed in India?
In India ATM made its first appearance in 1987 when HSBC introduced the concept. Presently ATM s are spread far and wide all over the globe. The most northerly ATM is in Norway and most southerly in New Zealand’s Ross Dependency in Antarctica. Highest installed ATM is by Axis Bank at Nathu La at 13200 ft. though Chinese media claims to have highest installed ATM at Nagchu, Tibet. And the lowest one is at 421 meters below sea level at Ein Bokek, Israel.
How ATMs are connected in India?
In India practically all the ATMs are interconnected with National Financial Switch (NFS) designed & implemented by Institute of Development & Research in Banking Technology, Hyderabad.
As of Sept 13 this network connects approx 1.40 lacs ATM s of 74 member banks, 99 sub-member banks, 42 RRB s & 1 White Label provider. White Label ATMs known as WLAs are provided by non banking companies approved by RBI.
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Caution ! Customers should not leave the ATM without collecting their cash as per the latest RBI Guidelines. You may loose your money due to technical delay in dispensing the cash. Machine may take more time to dispense cash as against normal time of 15-20 seconds.

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