Although we take them very much for granted today, automated cash-dispensing machines have only been common since the late 1970s. Banks introduced the devices first in Europe, then in North America and elsewhere. Today there are an estimated 2 to 3 million ATMs in service around the world, with about 60,000 of them in Germany and 350,000 or so in Western Europe.

The German term for ATM is Geldautomat, but the Austrians and the German Swiss prefer Bancomat/Bankomat. Even in the English-speaking world there are several different expressions for automated teller machines: ATM, ABM (automatic bank machine, Canada), bank machine, cash machine, Cashpoint (actually a trademark), and hole in the wall (UK). ATMs have pretty much eliminated old-fashioned traveler’s checks. Remember those?

In the pre-credit-card era, the first generation of European ATMs required special cards and sometimes even a special key to operate. As magnetic-stripe credit/debit cards came into more widespread use in the 1970s, the second generation ATMs accepted those – and introduced the four-digit PIN (Geheimzahl), an invention of British engineer James Goodfellow, for improved security. In December 1972 the British Lloyds Bank presented the 2984 CIT (Cash Issuing Terminal) with the brand name Cashpoint. The IBM 2984 is considered the precursor of all modern ATMs, and it was not long before IBM, Diebold and NCR were installing similar cash machines all across the United States, Canada and worldwide.

An ATM in Germany.
PHOTO: Hyde Flippo

In general, since the earliest days of ATMs and credit cards, Europe and much of Asia have had more advanced security and other useful features than in the United States. In Europe bank customers can deposit cash to their account using special ATMs, make payments via their mobile phones, and enjoy more protection against fraud using their “chip and PIN” (EMV*) system. The outdated and vulnerable magnetic-stripe (“magstripe”) cards used in the United States are finally being phased out, but it will take time to convert the 420,000 ATMs and millions of merchant card processors all across the USA. (Canada is farther ahead in using chip cards.) My first US chip-and-PIN card arrived in the mail from Citibank in February 2014, but all of my other US cards still have only a magnetic stripe on the back. (The new EMV cards also have a magnetic stripe, since there are currently so few chip-card ATMs or merchant chip-card processors in the US.)

A German Debit Card and Online Banking Guide
Although your US bank debit card and American Express, MasterCard, and Visa credit cards are useful when traveling in Europe, the following debit cards are only available to people with a European bank account:

• Maestro: A multi-national chip-and-PIN debit card service owned by MasterCard (since 1992). Maestro cards are obtained from associate banks and are linked to the card holder’s current account, or are prepaid cards. Maestro is the dominant payment card in Germany and Austria.
• V PAY: Created by Visa Europe, V PAY is a new European debit card based entirely on chip and PIN. European Banks have begun to issue V PAY cards and add its logo to their domestic debit cards.
• TAN: For added security, a TAN (transaction number) is required for any online banking transaction in Germany. A unique TAN is generated for each transaction and sent to the user either via mobile phone or a handheld electronic “TAN generator.” It is an added level of security that does not exist in the US.

In the meantime, if you take your old-style magstripe American credit/debit card to Europe, it will only work with some ATMs and at almost no card-payment machines or merchant checkout stands in Germany, Austria, Switzerland, and most European countries, including the UK. (Most European EMV cards also have a magnetic stripe – only because it is still needed for travel outside of Europe, particularly in the US.) Until the United States catches up with Europe, travelers with the old magstripe cards will have to be aware of the limitations they impose on users traveling overseas. While most bank ATMs in Germany will work with magstripe US bank/debit cards, some ATMs in stores, parking garages, airports and train stations may not.

After delaying for years, US credit card issuers finally set a deadline for the conversion to EMV cards. American retailers have until October 1, 2015 to install chip-card compatible readers at stores. (2017 for pay-at-the-pump; for ATMs 2016 [MC] or 2017 [Visa]) After the deadline, merchants will be held liable for any fraudulent charges resulting from the misuse of magstripe cards. (This card conversion and “liability shift” took place in Europe back in 2005/2006; 2008 for ATMs.) For online transactions, cardholders will either have to enter the three-digit security code on the back of the card (as now) or a secure password provided by the credit card company.

The new EMV cards aren’t perfect. They’re still vulnerable to so-called “card-not-present” fraud (committed via the Internet or telephone), but they are far more secure than the outmoded US magstripe cards that have been in use for over 40 years, since before the invention of the PC and the Internet. Many US ATMs and their networks still run on Windows XP, dating from 2001 and developed in the late 1990s.

Another ATM problem in Germany is more of a headache for the banks than for you: German thieves have recently grown fond of blowing up and stealing entire Geldautomaten and the money they contain. They are seldom caught.

ATM Tips for American Travelers in Europe

1. Make sure you know your credit and debit card PINs before you travel. (They are not the same!) Unlike in the USA, in Europe you may need to enter a PIN for your credit card.
2. A US magnetic-stripe debit card will usually work with a European bank ATM – as long as you know your PIN. (A credit card may also work if you know its PIN.)
3. Try to have at least one US chip-and-PIN card for use in Europe. Many American banks and credit card companies now offer the newer chip cards. Ask for one if you need to!
4. Keep cash (euros, pounds, kroner, etc.) on hand for situations where your US card won’t work.
5. Be aware that card-payment machines located at European airports, train stations, parking garages, luggage lockers, self-serve gas stations, and toll highways may not work with a magstripe card. Avoid getting stuck with a machine that won’t accept your US card. Try to find a machine that will also accept cash. At German gas stations you almost always have to pay inside at the cashier anyway, and a US card will be no problem there.
6. In European restaurants, bars, shops and other “tourist” venues, a magstripe card and your signature will almost always work, but (and it’s an important “but”!) many such establishments in German-speaking Europe don’t accept any credit cards at all, EMV or magstripe. Always ask first, and carry cash!

If properly prepared, Americans traveling or living in Europe don’t have to wait until 2017 to use ATMs there. Gute Reise! (Have a good trip! Bon voyage!)

Also see: German Banking and Credit Cards for Beginners and International Money Transfers

*EMV = Europay, MasterCard and Visa – EMV is a global standard for inter-operation of electronic-chip cards, first established in 1995 and now managed by the public corporation EMVCo LLC (www.emvco.com).