How ATM Works

Introduction:

The automated 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 automated teller machine (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 automated teller machine was invented by john shepherd-Barron in year of 1960.

Block Diagram of ATM

The automated teller 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

ATM Networking:

When a transaction is made, the details are inputted by the card holder. This information is passed on to the host processor by the ATM machine. The host processor checks these details with the authorized bank.  If the details are correct, the requested cash by the card holder is taken with the help of an electronic fund from the customer’s bank account to the host processor’s account. After this function is carried out, the processor sends an approval code to the ATM machine so that the cash can be transferred.

ATM Security

• An ATM card is secured as long as the PIN number is kept as a secret. There is no way to get the PIN number from your card as it is encrypted by strong software’s like Triple Data Encryption Standard. To keep your PIN number secure, there are a number of ways.

• Select your own PIN number. Select a PIN number which is easy to remember. It should not be anything that is associated to your birth date, phone number or anything personal. Do not write down the PIN number on the back of your ATM card.

Here are some tips on how to keep your ATM card safely.

• Your ATM card should be kept safely without being scratched or bent. Keep it in your purse or somewhere else safe.

• Take out the card from your purse before reaching the ATM counter. There is more chance for an attack if you are standing in front of the ATM.

• After entering the ATM counter close the door and then only turn around to the screen. Stand directly in front of the keypad, so that no one else sees the number you are pressing.

• After receiving the money, do not start counting the money right away. Put the money inside your purse at once. Keep the card also safely.

• There may also be cases where you may not receive the money because of a faulty ATM machine. In such cases, do not forget to take the ATM card.

• If you are ever forced to take the money out of an ATM machine by a stranger, just enter the number in the reverse order. For example, if your real PIN number is 1234 enter it as 4321. This will send a signal to the nearby police control room. Thus you can get help at the earliest.

Uses of ATM:

• Since ATM machines are found almost everywhere, you need not have to carry a huge amount in your hand. Whenever you need money, you can take it from the nearby ATM counter. All you have to do is carry the ATM card wherever you go. Sine the ATM card has a unique password, no one can access it even if it is stolen.

• An independent ATM host can access any bank. It also supports a large number of ATMs placed with different merchants.

• There is also Braille equipped ATMs that provide access of money even to the blind and visually impaired people.