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? he rollout of Automated Teller Machines (ATMs) is a key development in the African banking industry. An ATM is a data terminal composed of six devices - two input and four output.
The ATM has to be connected to a host processor, which is similar to an internet service provider (ISP) in the sense that it is through the host processor that a card holder is able to access a wide range of ATMs. Host processors support leased-line machines or a dial-up alternative. Leased-line machines link to the host processor via a telephone connection - four-wire and point-to-point. In contrast, dialup ATMs link to the host processor via a regular telephone line through a modem along with a toll-free telephone number, or alternatively using an internet service provider with a local access number, which a modem dials.
Typically, leased-line ATMs are more popular in busy locations due to their throughput capability. In contrast, dial-up ATMs are more popular in retail merchant locations due to their lower cost - a dial-up machine costs less than half the price of a leased-line ATM and their operating costs are also considerably less than that of a leased-line. In terms of ownership, banks sometimes own a given host processor. In other contexts, the merchants have ownership over the ATMs.
ATM density in Africa is the lowest in the world, making it a potentially lucrative final frontier for ATM manufacturers and technology designers. It is estimated that in 2009, there were around just 36,000 ATMs in Africa - far too low a ratio for a continent bearing ibn people.
In addition, 80% are concentrated in four African countries - Morocco, Egypt, South Africa and Nigeria. The money culture of many Africans remains incompatible to ATM usage as a considerable proportion of African populations still prefer to stash away paper cash rather than use banks.
ATM growth in 2009, at 15%, was in double figures but not spectacular. However, there are indications that things are changing. The 2012 ATM Future Trends report predicted that Africa will be the fourth most popular target market for ATMs on the planet by 2017, after China, India and the US.