ATM Jams: Caused By Poor Currency?
With over 70,000 ATMs in operation today, and "new" money costing about three cents per note, it is very costly to destroy notes that still have "life" in them and replace them with new notes.
The problem is that ATMs require a good quality currency to keep from jamming.
Fed uses some very sensitive equipment that tests thickness, quality, dirt and mutilation, among other things. All money that comes out of the Fed is considered to be ATM quality.
Using five different makes of ATMs, representing 90% of the ATM market, they then ran old and new money through the machines.
They came up with some surprising facts.
Statistically, the older, fit currency caused fewer jams than the new!
Test results were tabulated and showed that 40 jams occurred out of a total of 503,223 notes dispensed from the test ATMs. Approximately 70% of the machines experienced no jams at all. Since each ATM typically dispenses about 11,000 notes per month, this indicates that institutions using Federal Reserve fit currency may experience one jam every 12,500 notes dispensed-less than one jam per month.
Copyright © 1990 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 1, No. 1, 1/90
First published on 01/01/1990