ATM Cash Reconciliation: Definition, Problem & Solution

ATM machine & ATM Cash Reconciliation

Among ATM (Automated Teller Machine) Types, Cash Dispensers are expected to hold the dominant position in the global ATM managed services market during the forecast period (2017 – 2027). Cash dispensers are uni-directional device, cash is manually loaded and dispensed to customers. Cash dispensers are commonly deployed at banks and cost less than other ATM types and perform only cash dispensing functions, unlike machines where users can deposit cash. Typically, cash dispensers are installed in grocery stores, malls, etc. In developed countries, cash dispensers are replaced by more personalised machines with value-added services. However, cash dispensers have high demand in emerging countries due to their affordability. However, these devices often raise the question of ‘How to Perform Effective ATM Cash Reconciliation?’. 




Definition of ATM Cash Reconciliation: 

It is a process of performing checks on transactions that have occurred over a certain period. ATM reconciliation identifies discrepancies such as shortages or an excess of cash in the ATM Machine. 

ATM-managed services are a collection of services provided to financial institutions, banks, and other businesses installing and operating ATMs. These services include ATM service and repair, electronic journal & content management system, transaction processing, cash management, ATM deposit automation, software maintenance, and cash reconciliation services. 

The ATM reconciliation process produces reconciled cash positions and reports, allowing the banks to make settlements for shortages or any excess cash observed in a cash machine. 


Scope of the Problem: 

As with any large-scale manual reconciliation of data, there are various pain points and room for error.  

Banks and other ATM operators still rely heavily on manual accounting to settle their ATM transaction data. Current processes usually have manual controls prone to human error, uncontrolled internal interfaces, poor information quality with increasing volumes, and inflexible systems that don’t support reconciliation and reporting needs. 


ATM Cash Reconciliation Process: 

Steps involved in ATM Cash Reconciliation Process 

  • Collecting Transaction Details for every ATM Machine. 
  • Keeping track of the Opening Balance and Closing Balance for every machine. 
  • Depending on Closing Balance, following up with loading cash into ATM Machine.
  • Every ATM has an ATM ID which provides a transaction history of the ATM Machine through Electronic Journal (EJ) Files. Hence to find the Transaction status for any Transaction ID, the bank needs to search individually for a record ID through an EJ Files.


Problems Faced During Manual ATM Cash Reconciliation:

A few critical problems with the manual reconciliation of ATM data:

  • Track of Balance: Banks must keep track of the opening balance and closing balance. Any discrepancies in balances would disturb the arithmetic required to load cash into the ATM Machine. 
  • Threshold Limit of cash: Since the banks and operators have little control over the number/ amount of transactions, it becomes difficult to set a threshold cash value to load into the machine. 
  • Transaction status: It is often a tedious job for banks or operators to find individual transaction details. To do so involves searching typically encoded EJ Files.
  • Repetitive Steps: Repeating the above steps after every periodic duration is an error-prone and tedious process. 


The Solution? 

The obvious answer involves looking for a clean-cut and effective solution to the problems mentioned above with the current manual processes. Fortunately, Cash Managers can find the clear answer in Automated ATM Reconciliation Solutions.  

Automated solutions enable banks and operators to scale back human error, reduce costs, correlate masses of technical numerical data in seconds and often provide robust and detailed reports based on the information provided. ATM reconciliation solutions leverage the settlement processes and confirm operational stability through accurate matching of cash withdrawal and cash replenishment at the client-managed ATMs. 

This white paper introduces a cost-effective, transparent and actionable control regime to fully support– ATM cash management, reconciliation and reporting. Additionally, This control regime is often configurable to satisfy any specific business requirements. It educates on how to boost operational performance, mitigate risk and approach efficiencies in a controlled and auditable atmosphere.