ATM Industry Glossary

A

Acquirer

The financial institution or payment processor that manages an ATM owner's relationship with the card networks (Visa, Mastercard, etc.). The acquirer routes transactions, settles funds, and holds the merchant account on behalf of the ATM operator. Also called the acquiring bank or acquiring processor.

ADA Compliance

Federal accessibility requirements under the Americans with Disabilities Act that ATMs must meet, including audio guidance for visually impaired users, Braille instructions, reachable keypad height for wheelchair users, and accessible card reader positioning. Non-compliant ATMs expose the operator to legal liability and fines.

ATM (Automated Teller Machine)

A self-service electronic terminal that allows cardholders to withdraw cash, check balances, make deposits, and perform other financial transactions without a bank teller. ATMs can be bank-owned (on-premise) or independently owned and operated by an IAD (off-premise).

ATM Deployer

An entity - individual, business, or financial institution - that installs and operates one or more ATMs at retail or commercial locations. When not affiliated with a bank, an ATM deployer is commonly called an Independent ATM Deployer (IAD).

ATM Network

A shared infrastructure of interconnected ATMs that allows cardholders to access their accounts across participating machines using their debit or credit cards. Major U.S. ATM networks include Visa/Plus, Mastercard/Cirrus, NYCE, STAR, Pulse, and Allpoint.

ATM Placement Agreement

A legal contract between the ATM owner/operator and the location owner (merchant) that defines revenue sharing terms, surcharge split, exclusivity clauses, liability, contract term length, and removal rights. Also called a Location Agreement or Merchant Agreement.

Authorization

The process by which a cardholder's bank (the issuer) approves or declines a transaction request in real time. Authorization confirms the card is valid, the account has sufficient funds or credit, and the transaction has not been flagged as fraudulent. The result is sent back to the ATM within seconds.

B

Balance Inquiry

A transaction type where a cardholder checks their account balance at an ATM without withdrawing cash. Balance inquiries generate an interchange fee for the ATM owner in most cases but typically do not trigger a surcharge unless the operator configures one.

Bill Validator

Hardware inside a deposit-accepting ATM that scans, authenticates, and counts paper currency inserted by the cardholder. Not found on cash-dispensing-only ATMs. Bill validators use UV, magnetic, and optical sensors to detect counterfeits.

Branding (ATM)

The practice of displaying a financial institution's logo, colors, or name on an ATM - either as a proprietary machine or through a branding agreement with an IAD. Branded ATMs often offer surcharge-free access to that institution's own cardholders.

C

Cassette

The removable cash cartridge inside an ATM that stores currency for dispensing. Most ATMs hold one to four cassettes. Cassettes are loaded during the vaulting process and can be swapped out quickly during replenishment. Capacity is typically 1,000–2,000 notes per cassette.

Cash Replenishment

The process of refilling an ATM's cassettes with currency when cash runs low or runs out. Performed by the ATM owner, a contracted CIT (Cash-in-Transit) service, or a vault cash provider. Replenishment frequency depends on transaction volume and cassette capacity.

Chargeback

A dispute initiated by a cardholder or their bank that reverses a completed ATM transaction. At ATMs, chargebacks typically arise from claims that cash was not dispensed. Processors investigate using the machine's electronic journal data and any surveillance footage.

CIT (Cash-in-Transit)

Armored car or courier services that physically transport cash to and from ATMs on behalf of operators or vault cash providers. CIT companies provide security during vaulting and cash replenishment, and are required by most vault cash programs.

Compliance (ATM)

Adherence to all applicable regulatory, network, and legal standards governing ATM operation. Key compliance areas include PCI DSS (payment data security), ADA (physical accessibility), EMV (chip card), and Bank Secrecy Act (BSA) requirements for high-value cash transactions.

D

Dispense Error

A malfunction in which the ATM dispenses the wrong amount of cash - either too much (overage) or too little (shortage). Dispense errors are documented in the electronic journal and are the primary evidence used to resolve cardholder disputes. Also called a short dispense or long dispense.

Downtime

The period during which an ATM is out of service and cannot process transactions. Common causes include cash-out, paper-out (receipt roll empty), hardware failure, communication outages, and scheduled maintenance. Minimizing downtime is critical to maximizing revenue. Industry target is 95–99%+ uptime.

Dual Control

A security procedure requiring two authorized individuals to be present when accessing an ATM vault, loading cash, or performing certain sensitive maintenance tasks. Required by most vault cash providers and armored car companies to prevent internal theft.

E

Electronic Journal (EJ)

A digital log maintained by the ATM that records every transaction, error, and maintenance event with timestamps. Used for daily balancing, chargeback dispute resolution, and regulatory compliance. Modern ATMs store EJ data electronically; older models used paper journal rolls printed internally.

EMV (Chip Card Standard)

The global standard for chip-based payment cards and terminals, named for Europay, Mastercard, and Visa. EMV-compliant ATMs read the embedded microchip rather than (or in addition to) the magnetic stripe, significantly reducing counterfeit card fraud. ATMs not upgraded to EMV face liability shift for fraudulent transactions.

EPP (Encrypting PIN Pad)

The tamper-resistant keypad on an ATM used to capture a cardholder's PIN. The EPP encrypts the PIN immediately upon entry using Triple DES or AES encryption, preventing interception in transit. EPPs must meet PCI PTS (PIN Transaction Security) certification requirements.

F

First-Line Maintenance (FLM)

Basic ATM maintenance tasks that can be performed by the ATM owner or a non-technical operator without a service call. Common FLM tasks include loading receipt paper, clearing simple paper jams, rebooting the machine, and basic exterior cleaning. Distinct from second-line maintenance, which requires a trained technician.

Float

The cash loaded into an ATM's cassettes that is used to fund cardholder withdrawals. In vault cash arrangements, the float is owned by the vault cash provider, not the ATM operator, allowing operators to run ATMs without tying up large amounts of their own capital.

G

Gateway (ATM)

A connection point or software layer between an ATM terminal and the payment processing network. ATM gateways translate transaction data into the format required by the network and route authorization requests to the appropriate issuing bank. Some processors offer gateway-only services for operators who want to switch acquirers.

H

Host Processor

The company that processes ATM transactions on behalf of the ATM operator, connecting each machine to card networks and issuing banks. The host processor handles authorization routing, settlement, reporting, and terminal management. Also called a back-end processor. Examples include Fiserv, FIS, Worldline, and independent providers.

Hyosung (Nautilus Hyosung)

One of the world's largest ATM manufacturers, rebranded as Hyosung TNS. Their machines - including the Halo II, Force, and Monimax series - are among the most widely deployed by independent ATM operators in the U.S. Known for reliability and a large parts/service ecosystem.

I

IAD (Independent ATM Deployer)

An individual or company that owns and operates ATMs independently of any bank, typically placing machines in retail locations and earning revenue through surcharge fees and interchange. IADs contract independently with host processors, vault cash providers, and service companies.

Interchange

A fee paid from the cardholder's bank (issuer) to the ATM operator's processor each time a cardholder uses the ATM. Interchange rates vary by network and transaction type and typically range from $0.20 to $0.50 per transaction. Interchange supplements surcharge revenue and is a meaningful income source for high-volume locations.

Interoperability

The ability of an ATM to accept cards from multiple networks and issuing banks. Achieved by the ATM operator participating in shared card networks (Visa, Mastercard, STAR, NYCE, etc.) through their host processor. A fully interoperable ATM can serve virtually any debit or credit cardholder.

ISO (Independent Sales Organization)

A company or individual authorized by a payment processor or acquirer to resell ATM processing services, recruit ATM operators, and manage a portfolio of merchant accounts. ISOs earn ongoing residual income based on the transaction volume generated by operators in their portfolio.

Issuer

The financial institution - typically a bank or credit union - that issued the cardholder's debit or credit card. The issuer authorizes or declines ATM transaction requests in real time and ultimately pays interchange fees to the ATM owner's processor for each approved transaction.

J

Journal (Electronic)

See: Electronic Journal. The complete digital audit record of all activity on an ATM, including every transaction, error, configuration change, and maintenance event. "Pulling the journal" is a standard step in balancing and dispute resolution.

K

Key Injection

The secure process of loading cryptographic encryption keys into an ATM before it goes into service. Key injection is performed under strict dual-control procedures at a certified facility or by a qualified technician. Proper key injection is required for PCI DSS compliance and ensures PIN data is encrypted correctly.

Key Management

The cryptographic processes used to generate, distribute, store, and retire the encryption keys that protect PIN and card data in ATMs. Includes Master Key/Session Key (MK/SK) and DUKPT (Derived Unique Key Per Transaction) schemes. A core PCI DSS requirement.

L

Load (Cash Load)

The act of filling an ATM's cassettes with currency. The person performing the load is called a loader or vault cash courier. The load amount is recorded in the ATM management system and reconciled against transaction data during the daily balancing process.

Location Agreement

See: ATM Placement Agreement. The contract between the ATM operator and the merchant or property owner that defines the terms of placing and operating an ATM at that site, including surcharge sharing, exclusivity, and removal conditions.

M

Magnetic Stripe

The black stripe on the back of a payment card that stores account data (card number, expiration date, service code) in encoded magnetic tracks. Magnetic stripes are vulnerable to skimming fraud, which is why the industry has largely shifted to EMV chip cards. Many ATMs still read magnetic stripes as a fallback.

Master Key

The top-level encryption key injected into an ATM during initial setup that protects all other encryption keys used by the machine. The master key is loaded under dual control, never transmitted in plaintext, and is the foundation of the ATM's entire security architecture.

Merchant Commission

A payment made from the ATM operator to the location owner as part of the surcharge revenue share agreement. Typically a flat fee per transaction (e.g., $0.50) or a percentage of the surcharge. Defined in the ATM Placement Agreement and usually paid monthly.

Remote Monitoring

The use of software platforms and remote management systems to track ATM uptime, cash levels, error states, journal data, and transaction activity in real time from a central location. Most host processors and ATM management platforms offer monitoring dashboards accessible online or via mobile app.

N

Network Fee

A per-transaction fee charged by the card network (Visa, Mastercard, NYCE, STAR, etc.) for routing a transaction through their infrastructure. Network fees are typically deducted from interchange before settlement, reducing the net amount received by the ATM operator.

Note Jam

A mechanical error in which currency becomes lodged in the ATM's transport mechanism during dispensing. Results in transaction errors, potential dispense discrepancies, and an out-of-service condition. Clearing a note jam is usually a first-line maintenance task, though severe jams may require a technician.

O

Off-Premise ATM

An ATM located outside of a financial institution's owned or leased property - typically in a retail environment such as a convenience store, gas station, bar, restaurant, hotel, or strip mall. The vast majority of independently operated ATMs are off-premise machines.

On-Premise ATM

An ATM located inside or directly adjacent to a bank or credit union branch, operated by that institution primarily for its own customers. On-premise ATMs typically do not charge a surcharge to customers of the owning institution.

P

PAN (Primary Account Number)

The 13–19 digit number embossed or printed on a payment card that identifies the card issuer and the cardholder's account. Under PCI DSS, ATMs must never store the full PAN after a transaction is authorized, and must never display more than the last four digits on screen or receipts.

PCI DSS

The Payment Card Industry Data Security Standard - a set of security requirements established by the PCI Security Standards Council (PCI SSC) that all entities handling cardholder data must comply with. For ATM operators, PCI DSS covers encryption, physical security, access control, software patching, and vulnerability management.

PIN (Personal Identification Number)

A numeric code entered by a cardholder at the ATM keypad to authenticate their identity and authorize a transaction. PINs are encrypted by the EPP immediately upon entry and are never stored in plaintext by the ATM, the processor, or any other party in the transaction chain.

Placement Fee

A one-time or recurring payment made by an ATM operator to a merchant location in exchange for exclusive rights to place and operate an ATM on the premises. Some placement agreements use a placement fee instead of, or in addition to, an ongoing surcharge revenue share.

Processing Agreement

The contract between an ATM operator and their host processor that governs transaction routing, per-transaction fees, settlement timing, reporting access, terminal management, and dispute procedures. Reviewing this contract carefully - especially fee structures and term lengths - is critical before signing.

R

Receipt Paper

The thermal paper roll used by an ATM to print transaction receipts for cardholders. Running out of receipt paper ("paper out") causes most ATMs to go out of service until restocked. Monitoring receipt paper levels remotely is a standard part of ATM management.

Reconciliation

The process of matching an ATM's electronic journal records against the actual cash dispensed and the processor's settlement reports to verify accuracy and identify any discrepancies. Performed daily or after each cash load. Discrepancies trigger investigation and, if necessary, dispute filings.

Residual Income

Ongoing commission earnings generated from ATM transaction volume. For ISOs, residuals come from the processing revenue of ATM operators in their portfolio. For ATM operators, residual income refers to the predictable monthly earnings from surcharge and interchange across their deployed machines.

Revenue Share

A split of the ATM surcharge fee between the ATM operator and the merchant location hosting the machine. Common structures include a flat fee per transaction paid to the merchant (e.g., $0.50/transaction) or a percentage split of the surcharge (e.g., 50/50). All terms are defined in the Placement Agreement.

S

Second-Line Maintenance (SLM)

ATM repairs that require a trained technician, such as replacing hardware components (card reader, EPP, receipt printer, dispenser), resolving complex note jams, firmware upgrades, and full hardware diagnostics. SLM is typically handled by the ATM manufacturer's service network or a contracted third-party ATM service provider.

Settlement

The process by which transaction funds are moved between financial institutions - ultimately crediting the ATM operator's account with surcharge revenue and interchange - typically occurring 1–3 business days after each transaction. Settlement reports from the host processor are used to reconcile the ATM's electronic journal.

Skimmer

A fraudulent device covertly attached to an ATM's card reader or keypad to steal card data and PINs from unsuspecting cardholders. Skimmer attacks are among the most common forms of ATM fraud. ATM operators are responsible for regularly inspecting their machines for skimming devices and reporting finds to law enforcement.

Surcharge

The fee charged directly to the cardholder by the ATM operator for using the machine. Typically ranges from $1.50 to $3.50 for retail off-premise ATMs. The surcharge is the primary revenue source for independent ATM operators. By law, the surcharge amount must be disclosed on-screen before the cardholder confirms the transaction.

Surcharge-Free Network

A network of ATMs where cardholders from participating financial institutions can withdraw cash without paying a surcharge. Examples include Allpoint, MoneyPass, and CO-OP. ATM operators can join these networks - for a fee - in exchange for higher transaction volume driven by the network's cardholder base.

T

Terminal ID (TID)

A unique identifier assigned to each ATM by the host processor or acquiring bank. The TID is used to route transactions to the correct machine, track transaction activity, identify the ATM in settlement reports, and pinpoint the machine in dispute resolution and chargebacks.

Transaction Fee

A per-transaction charge assessed by the host processor to the ATM operator for processing each authorization and settlement. Deducted from settlement or billed monthly. Distinct from the surcharge charged to the cardholder. Transaction fees vary by processor and are a key cost to compare when selecting a processing partner.

Triple DES (3DES)

A symmetric encryption algorithm historically used to protect PIN data in transit from the ATM's EPP through the processing network. 3DES applies the DES cipher three times to each data block. It is being phased out in favor of AES (Advanced Encryption Standard) in newer ATM deployments but remains present in much of the active installed base.

U

Uptime

The percentage of total time an ATM is operational and able to process transactions. Industry standard targets are 95–99%+ uptime. Downtime causes include cash-out, paper-out, hardware failure, communication errors, and maintenance windows. Uptime is a key performance metric tracked by operators and processors alike.

V

Vault Cash

Currency provided to an ATM operator by a third-party vault cash provider to fund the ATM's cassettes, allowing the operator to run machines without deploying large amounts of their own capital. The operator pays an interest rate or rental fee on the vault cash balance and must maintain insurance and meet the provider's security requirements.

Vault Cash Provider

A company or financial institution that supplies cash to ATM operators under a vault cash agreement. The provider retains ownership of the funds in the ATM at all times. Common vault cash providers include banks with specialized programs and dedicated ATM vault cash companies.

Vaulting

The physical act of loading currency into an ATM's cassettes. Can be performed by the ATM owner directly (self-vaulting), an armored car / CIT company, or a contracted cash logistics provider. Vaulting procedures typically require dual control and accurate load documentation.

W

Wireless ATM

An ATM that connects to the processing network via a cellular connection (4G LTE or 5G) rather than a wired Ethernet, DSL, or fiber line. Common in locations where wired connectivity is unavailable or impractical - such as festivals, fairs, rural stores, and temporary event sites. Cellular ATMs typically incur higher monthly data costs.