ATM Withdrawals Research Articles

Effectiveness of ATM withdrawal forecasting methods under different market conditions

This study aims to test the forecasting accuracy of recently implemented econometric tools as compared to the forecasting accuracy of widely used traditional models when predicting cash demand at ATMs. It also aims to verify whether the pandemic-driven change in market conditions impacted the predictive power of the tested models. Our conclusions were derived based on a data set that consisted of daily withdrawals from 61 ATMs of one of the largest European ATM networks operating in Krakow, Poland, and covered the period between January 2017 and April 2021.The results proved that the recently implemented methods of forecasting ATM withdrawals were more accurate as compared to the traditional ones, with XGBoost providing the best forecasts in the majority of the tested cases. Moreover, it was found that the pandemic-driven change in market conditions affected the predictive power of the models. Both of these results seem particularly useful for improving the efficiency of ATM networks.

Transitory income changes and consumption smoothing: Evidence from Mexico

We test if 3534 beneficiaries of PROSPERA, Mexico’s cash transfer program, smooth food consumption before and after the date of the transfer receipt, and if consumption smoothing is costly. The transfer is an anticipated and transitory income shock and, thus, the PIH predicts that consumption should be smooth before and after its receipt. We find that food consumption does not change the days before and after the transfer date and we find no evidence that households bear costs to smooth consumption. The transfer’s cost of access, which encompasses participants’ distaste for using debit cards and costly ATM withdrawals, may help time-inconsistent and less experienced debit card holders smooth consumption.

Business Models and Pricing Strategies in the Market for ATM Withdrawals

Business Models and Pricing Strategies in the Market for ATM Withdrawals

Effect of electronic banking on financial performance of deposit money banks in Nigeria

The impact of technology on commerce cannot be denied, especially in relation to trade. This study was conducted to examine the impact of electronic banking on the financial performance of Nigerian deposit money banks. The data for the study was obtained from the Central Bank of Nigeria’s Statistical Bulletin and the National Bureau of Statistics’ Statistical Bulletin for various years, as well as from published financial statements of the banks under study. An ex-post facto research design was used and a normality test was carried out to establish the goodness of the data; descriptive statistics and a multicollinearity test were conducted in which the independent variables were found good. Regression was adopted to test two hypotheses. It was found that ATM has a positive and significant association with Earning EPS and ROA; POS and NEFT significantly affect ROA only, while WEB has an insignificant impact on both EPS and ROA. It is concluded that electronic banking significantly affects financial performance of deposit money banks in Nigeria. Thus, the study recommended that deposit money banks in Nigeria should educate their customers more in the use of NEFT, WEB, and POS, and that the amount of ATM withdrawals should be increased to improve bank performance.

Consumption and Portfolio Rebalancing Response of Households to Monetary Policy: Evidence of the HANK Channel

This paper tests one specific monetary transmission mechanism through households: portfolio rebalancing. We use a unique panel dataset of household’s credit and debit card spending, ATM withdrawals, financial investments into risky assets such as mutual funds and equities, as well as bank deposits from a leading bank in India to study the impact of the monetary policy pass-through for term depositors. The difference-in-differences estimators show that when interest rate falls, households increase consumption by 2,095 rupees (30 USD) and risky investments by 20,728 rupees (300 USD) after the expiry of term deposits. The increase in risky investment is about 10 times as much as the increase in consumption, suggesting that savers rebalance their portfolio and “reach for yield” when interest rate falls, shifting from safe assets (bank deposits) to more risky assets (mutual funds and equities). We estimate the interest elasticity of consumption to be -1.02 and interest elasticity of risky investments to be -19.5. Furthermore, we find that the effects on consumption and risky investment are larger for households holding term deposits without automatic renewal feature. The consumption effect is larger for those with less liquid wealth and the portfolio rebalancing effect on risky investment is larger for those with more liquid wealth. These results highlight how the heterogeneity in contract design and household wealth affects the monetary policy pass-through.

Assessing the Current Status of Information Security Policies Among Saccos in Kenya

In 2013, Communication Authority of Kenya (CAK) recorded cyber-attacks amounting to Sh5.4 million loses. In April 2016, Bandari Savings and Credit Cooperative Society lost Sh5 million through fraudulent ATM withdrawals (Nation Newspapers, April 8, 2016). These examples demonstrate weaknesses that may exist from security breaches and incidents caused by people, processes, and technology. Ministry of ICT and CAK are lacking specific Information Security Models tailored towards SACCOS in Kenya. The study therefore sought to assess the current status of information security policies among SACCOS in Kenya. The study adopted descriptive research design. The unit of observation was 135 SACCOS registered with SACCO Societies Regulatory Authority (SASRA) while the unit of analysis was 270 ICT personnel working in the 135 targeted SACCOS. The study targeted the SACCOS heads of IT department. The study used Nassiuma (2000) formula to get a sample of 85 respondents. Purposive sampling was further used in selecting study participants in every SACCOS who were considered to be knowledgeable of the variables under study. The study utilized questionnaire as the survey instrument to collect both quantitative and qualitative data. The study adopted descriptive statistics. Descriptive data was presented by use of frequency tables. The study established that in all the SACCOS studied, information security policy is used. However, there are still challenges on how information security breaches and incidents can be contained based on the results of the study and therefore calls for further research in academic research. The findings of the study indicate that SACCOS were able to validate that the enhanced information security model using an integrated approach worked as planned and reported to auditors, managers and executives that incident response programs are robust and reliable. If security controls didn’t work as planned, they will need to fix them. The actions and resources needed should be included in in the report to executives in the SACCOS sector in Kenya Keywords : SACCOS, Management controls, Information Security Policies, Risk assessment DOI : 10.7176/EJBM/11-27-09 Publication date:September 30th 2019

Nowcasting Private Consumption: Traditional Indicators, Uncertainty Measures, Credit Cards and Some Internet Data

The focus of this paper is on nowcasting and forecasting quarterly private consumption. The selection of real-time, monthly indicators focuses on standard (“hard”/“soft” indicators) and less-standard variables. Among the latter group we analyze: i) proxy indicators of economic and policy uncertainty; ii) payment cards’ transactions, as measured at “Point-of-sale” (POS) and ATM withdrawals; iii) indicators based on consumption-related search queries retrieved by means of the Google Trends application. We estimate a suite of mixed-frequency, time series models at the monthly frequency, on a real-time database with Spanish data, and conduct out-of-sample forecasting exercises to assess the relevant merits of the different groups of indicators. Some results stand out: i) “hard” and payments cards indicators are the best performers when taken individually, and more so when combined; ii) nonetheless, “soft” indicators are helpful to detect qualitative signals in the nowcasting horizon; iii) Google-based and uncertainty indicators add value when combined with traditional indicators, most notably at estimation horizons beyond the nowcasting one, what would be consistent with capturing information about future consumption decisions; iv) the combinations of models that include the best performing indicators tend to beat broader-based combinations.

전기통신금융사기의 방지를 위한 법정책적 고찰

Telecommunications-based financial fraud has caused tremendous damage to the financial life of Korea since the early 2000s. The initial method of crime of telecommunications-based financial fraud criminals was voice Phishing, but later developed into Pharming, Memory Hacking and Smishing. Recently, it has become difficult to commit such crimes because of the government’s and financial institutions’ efforts to promote crime prevention. Scammers have developed their own techniques and used Qshing and the Obscene Video Chat Phishing, in which the criminal seduces others to find their flaws and exploit them to steal money.BR According to the National Police Agency statistics, a total of 6,227 telecommunication-based financial fraud (Phishing, Pharming, Smishing, Memory Hacking, and Obscene Video Chat Phishing) incidents occurred solely in the year of 2016, and the total amount of financial damage was more than 27.4 billion won. However, considering the cases of undeclared crimes, such as incidents or financial damage that are not reported in the statistics of the National Police Agency, it is estimated that the extent of damage will be much greater than stated by the police statistics. BR The Financial Services Commission, the National Police Agency, and the Financial Company have continually worked to minimize these damages. The government and the National Assembly have adopted 「Digital Signature Act」, 「Electronic Financial Transaction Act」, 「Act on the Promotion of Information and Communications Network Utilization and Information Protection, etc」, 「Personal Information Protection Act」, and 「Special Act on the Prevention of Losses Caused by Telecommunications-Based Financial Fraud and Refund for Loss」. They have tried to prevent telecommunications-based financial fraud by utilizing these legal safeguards. The police have operated 112 centers to try to help victims of voice phishing. Financial institutions and companies have strengthened the security regarding the issuance and reissuance of public key certificates. They used a system that delayed ATM withdrawals for a certain amount of time. They also tried to prevent the occurrence of borrowed or stolen accounts that are being exploited as a major means of committing telecommunications-based financial fraud.BR Despite these efforts, telecommunications-based financial fraud has not been blocked, and the damage still remains. Therefore, fundamental examination and revision of the countermeasures against telecommunications-based financial fraud is necessary.BR The IP address tampering through borrowed or stolen accounts or VPNs should be continuously regulated to prevent telecommunications-based financial frauds. The laws related to telecommunication-based financial fraud should be revised to establish systematic regulatory bases. In addition, it is necessary to create a system that can detect the occurrence of such crime in advance. And it is necessary to create a unified organization responsible for telecommunication-based financial fraud that can effectively carry out such fraud prevention tasks. As a legal device to aid the victims in the aftermath, it is also necessary to create funds for the victim`s relief and to activate insurance systems.BR These policies are not perfect countermeasures against telecommunications-based financial fraud. This is because, based on how the methods of telecommunications-based financial fraud has evolved over the past decade, no one can predict how such methods will evolve and how the degree of damage will change.

ATM foreign fees and cash withdrawals

Abstract We evaluate the impact of “foreign” fees paid by consumers on their cash withdrawals at automatic teller machines (henceforth ATMs). These so called foreign fees are paid when consumers withdraw cash from ATMs which are not owned by their home bank. We take advantage of a natural experiment whereby (non linear) foreign ATM fees in one specific bank became suddenly applicable at one point in time. We also use this experiment to evaluate the substitutions between foreign ATM withdrawals and other home ATM or desk withdrawals as well as with payments by card. Using panel data on accounts, we first estimate average treatment effects on the treated before carrying on with the estimation of a simple structural model. The latter procedure allows us to compute the counterfactual impacts of changing the schedule of foreign fees. Impacts are sizeable on bank profits and consumer welfare.

Migrants’ Choice of Remittance Channel: Do General Payment Habits Play a Role?

Summary This paper investigates the determinants in migrants’ choice of payment channel when transferring money to relatives abroad. We analyze survey results on 501 migrants in the Netherlands, identifying five remittance channels: bank, money transfer operator, in-cash transfers via informal intermediaries, ATM withdrawals abroad, and carrying cash abroad. The results show that education, costs, access, and financial development in the recipient country are important determinants, while general cash preferences and internet banking usage play a limited role. Based on our findings, financial education, cost reduction, and increasing financial inclusion may serve a valuable role to increase the use of formal channels.

Consumers’ Use of Prepaid Cards: A Transaction-Based Analysis

Open-loop prepaid cards are becoming a mainstream payment instrument in the United States. In addition, businesses and governments increasingly view them as a less expensive alternative to checks for disbursing payroll and benefits.There are few studies that examine how consumers actually use prepaid cards, the revenues generated, and the resulting costs cardholders incur. This information gap poses a challenge for an industry in the early stages of refining its business models. It also poses a challenge for policymakers seeking to design cost-effective consumer protections for these products.We analyze an anonymized data set of more than 280 million transactions made on more than 3 million cards issued by Meta Payment Systems. While the data have limitations and are not necessarily representative of the entire market, they can be used to establish a number of important stylized facts about the life cycle of prepaid cards.We report detailed statistics on the longevity of prepaid cards and the intensity of their use, including the frequency and value of spending, the composition of spending at merchants, ATM withdrawals, and reloading of value onto cards. We identify cards that are likely enrolled in direct deposit and contrast usage of those cards with other cards in the data. We calculate statistics on revenues earned via consumer fees and the composition of those fees. We also estimate interchange revenues earned and thus quantify the significance of this funding source to the prepaid business model.

Banks Collect Overdraft Opt-Ins Through Misleading Marketing: Survey Finds Low Opt-In Rate, High Number of Misperceptions

A survey was conducted regarding consumers choices whether to to overdraft coverage for their checking accounts. Many banks routinely cover any transaction that overdraws a customer’s account, including checks, ATM withdrawals, and point-of-sale debit transactions for a fee of about $34 -- often called “overdraft protection.” The Federal Reserve Board issued a rule requiring that banks and credit unions obtain customer consent before approving debit card transactions for a fee. Many banks responded by conducting aggressive campaigns aimed at getting customers to opt-in. The survey results find that only 33 percent of account holders opted-in to overdraft coverage. Most who did opt-in based their decision on misunderstandings of the nature of this coverage. Sixty percent of consumers who opted in stated that an important reason they did so was to avoid a fee if their debit card was declined. In fact, a declined debit card costs consumers nothing. Sixty-four percent (64%) of consumers who opted in stated that an important reason they did so was to avoid bouncing paper checks. The truth is that the opt-in rules cover only debit card and ATM transactions. For almost half of those who opted in, simply stopping the bank from contacting them with opt-in messages by mail, phone, email, in person, and online banking was a factor in their decision.

The Safety of Cash and Debit Cards: A Study on the Perception and Behaviour of Dutch Consumers

This paper investigates the impact of consumers’ safety perception on debit card and cash usage. A conceptual framework of safety perception and payment behaviour is introduced and tested with 2008 consumer survey data. The results demonstrate that consumers’ payment preferences for cash and debit cards are strongly affected by how consumers assess the likelihood and seriousness of safety incidents related to cash, debit cards and ATM withdrawals. Risk aversion, personal characteristics and personal experiences all play a significant role. This study underlines the importance of effective safety measures, which minimise the risks inherent in the payment system, and of clear communication towards consumers, so that they may continue to pay efficiently and safely in all circumstances.

Are “bounced check loans” really loans? Theory, evidence and policy

This research addresses the controversial bank policy of paying – rather than bouncing – overdrawn checks, debits or ATM withdrawals. We argue that it should fall under lending regulations only if consumers use the program to get intentional loans. In contrast, if the program primarily applies to checking account activity then it should fall under checking account regulations. A model of precautionary balance holding and checking account customer data are used to estimate the likelihood of overdrafting. Predicted overdrafts are compared to actual overdrafts to conclude that 79% are explained by the model and thus thought to be mistakes due to the stochastic nature of household expenditures.

Did Inflation Really Soar After the Euro Cash Changeover? Indirect Evidence from ATM Withdrawals

The introduction of the euro notes and coins in the first two months of 2002 was followed by a lively debate on the alleged inflationary effects of the new currency. In Italy, as in the rest of the euro area, survey-based measures signaled a much sharper rise in inflation than measured by the official price indices, whose quality was called into question. In this paper we gather indirect evidence on the behavior of prices from the analysis of cash withdrawals from ATM and their determinants. Since these data do not rely on official inflation statistics, they provide an independent check for the latter. We present a model in which the relationship between aggregate ATM withdrawals and aggregate expenditure is not homogenous of degree one in the price level, a prediction which is strongly supported by the data. This feature allows us to test the hypothesis that, after the introduction of the euro notes and coins, consumer prices underwent an increase not recorded by official inflation statistics. We do not find evidence in support of this hypothesis.

Trends in the Use of Payment Instruments in the United States

In 2003, for the first time, the number of electronic payments in the United States exceeded the number of check payments--a result of substantial growth in electronic payments (especially by debit card) and a decline in check payments. The shift toward electronic payments suggests that, as with other large economies, many payments formerly made by check are now being made with electronic payment instruments. As in past years, however, the value of checks far exceeded the value of commonly used electronic payments. Data gathered in 2004 also reveal some differences among geographic regions. Debit card use was substantially greater, and check use substantially lower, in the West than in other regions. In contrast, debit card use was considerably less common in the Northeast, and the decline in check payments since 2000 was less pronounced in that region. Indirect evidence--data on ATM withdrawals and cash back from debit card payments--suggests that cash remains a popular means of making payments. Industry data showing increases in ATMs and ATM transactions appear to reflect a shift toward greater use of ATMs and less use of checks to obtain cash, and do not necessarily indicate an increase in the use of cash.

How Do Debit Cards Affect Cash Demand? Survey Data Evidence

This paper analyzes how EFT-POS payments and ATM withdrawals affect cash demand. In particular, survey data about Austrian individuals are employed to estimate a purse cash demand equation, which takes account of sample selection effects. The results reveal that purse cash demand is significantly and sizably affected by debit card usage and that there are significant differences in cash demand for individuals with different debit card usage frequencies. In addition, the effect of EFT-POS payments on cash use at the point-of-sale is discussed on the basis of data from a consumer transaction survey.