How ATMs Work

Introduction:

The automatic teller machine (ATM) is an automatic banking machine (ABM) which allows customer to complete basic transactions without any help of bank representatives. There are two types of automatic teller machines (ATMs). The basic one allows the customer to only draw cash and receive a report of the account balance. Another one is a more complex machine which accepts the deposit, provides credit card payment facilities and reports account information.

It is an electronic device which is used by only bank customers to process account transactions. The users access their account through special type of plastic card that is encoded with user information on a magnetic strip. The strip contains an identification code that is transmitted to the bank’s central computer by modem. The users insert the card into ATMs to access the account and process their account transactions. The automatic teller machine was invented by john shepherd-Barron in year of 1960.

The Automatic telling machine consists of mainly two input devices and four output devices that are;

Input Devices:

•       Card reader
•       Keypad

Output Devices:

• Speaker
• Display Screen
• Receipt Printer
• Cash Depositor

Input Devices:

• Card Reader:

The card reader is an input device that reads data from a card .The card reader is part of the identification of your particular account number and the magnetic strip on the back side of the ATM card is used for connection with the card reader. The card is swiped or pressed on the card reader which captures your account information i.e. the data from the card is passed on the host processor (server). The host processor thus uses this data to get the information from the card holders.

• Keypad:

The card is recognized after the machine asks further details like your personal identification number, withdrawal and your balance enquiry Each card has a unique PIN number so that there is little chance for some else to withdraw money from your account. There are separate laws to protect the PIN code while sending it to host processor. The PIN number is mostly sent in encrypted from. The key board contains 48 keys and is interfaced to the processor.

Output Devices:

• Speaker:

The speaker provides the audio feedback when the particular key is pressed.

• Display Screen:

The display screen displays the transaction information. Each steps of withdrawal is shown by the display screen. A CRT screen or LCD screen is used by most of ATMs.

• Receipt Printer:

The receipt printer print all the details recording your withdrawal, date and time and the amount of withdrawn and also shows balance of your account in the receipt.

• Cash Dispenser:

The cash dispenser is a heart of the ATM. This is a central system of the ATM machine from where the required money is obtained. From this portion the user can collect the money. The duty of the cash dispenser is to count each bill and give the required amount. If in some cases the money is folded, it will be moved another section and becomes the reject bit. All these actions are carried out by high precision sensors. A complete record of each transaction is kept by the ATM machine with help of an RTC device.

ATM Networking:

The internet service provider (ISP) also plays an important role in the ATMs. This provides communication between ATM and host processors. When the transaction is made, the details are input by the card holder. This information is passed on to the host processor by the ATM machine. The host processor checks these details with authorized bank. If the details are matched, the host processor sends the approval code to the ATM machine so that the cash can be transferred.

ATM Security:

The ATM card is secured with PIN number which is kept secret. There is no way to get the PIN number from your card. It is encrypted by the strong software like Triple data Encryption Slandered.

Automatic Teller Machine Working Principle:

Advantages of Automatic Teller Machine:

•  The ATM provides 24 hours service
•  The ATM provides privacy in banking communications
•  The ATMs reduce the work load banks staff
•  The ATM may give customer new currency notes
•  The ATMs are convenient to banks customers
•  The ATM is very beneficial for travelers
•  The ATM provide services without any error

Features of Automatic Teller Machine:

• Transfer funds between linked bank accounts
• Receive account balance
• Prints recent transactions list
• Change your pin
• Deposit your cash
• Prepaid mobile recharge
• Bill payments
• Cash withdrawal
• Perform a range of feature in your foreign language.