What is ATM and How Does ATM Work

Full Form of ATM

Automated Teller Machine

What is ATM

ATM Full Form- Automated Teller Machine is actually a special computer that facilitates managing bank account holder’s money. It allows a person to check the balance of the account, withdraw or deposit money, print details of account activities or transactions, and even buy tickets.

ATM was first used in London in 1967 and can be found nationwide after 50 years.

ATM can be in banks or other places from the bank. Atm is located on premises in financial institutions. Customers enjoy more options, convenience, and availability, while banks can increase their revenue from transactions, reduce operating costs and maximize employee resources.

Off-primary ATMs are usually found in places like airports, grocery and convenience stores, and shopping centers where there is a simple need for cash.

ATM has four outputs and two simple data terminals with input devices. They have to connect to a host processor and communicate through it. The host processor works like an Internet Service Provider (ISP), a portal through which all the various networks of ATMs become accessible to the bank account holder with credit cards or debit cards.

About ATM

ATM is an (ABM) automatic banking machine that allow the customer to the complete basic transaction without the help of bank interfare.

There are 2 types of ATM. The original allows a customer to withdraw only cash and receive account balance reports.

Another is a more complex machine that accepts deposits, facilitates payment credit cards,s and provides account information.

ATM is an electronic device use only by the bank customers to process their account transactions. Users can access their account through a particular type of plastic card which is encoded with user information on a magnetic bar.

The bar contains an identity code that is transmitted by modem to the central computer of the bank. Users enter cards in ATM to access accounts and process their account transactions.

The automated teller machine was invented by John Shepherd Baron in the year 1960.

What is the block diagram of ATM

ATM (Automated Teller Machine) Block Diagram

ATM (Automated Teller Machine) consists mainly of two input devices and four output devices –

Input Device

Card Reader – Card Reader is an input device that reads data from the card. The card reader is part of the identity of your particular account number and magnetic tape is used on the back of the ATM card for the connection of the card reader. The card is swiped or pressed on the card reader which is given to the data host processor (server) from the card, taking your account information. The host processor thus uses this data to get information from cardholders.

Keypad – The card is identified after the machine asks for other details like your identification number and withdrawal. Each card has a unique PIN in your remaining inquiries so that there is some more chance to withdraw money from your account. There are separate laws to protect pin codes when sending host processors. The pin is always sent in encrypted form. The keyboard has 48 keys and it has an interface for the processor.

Output Device

Speaker – The speaker provides an audio response when a particular key is pressed.

Display Screen – The display screen displays transaction information. Each step of the withdrawal is shown on the display screen. Most ATM uses CRT screen or LCD screen.

Receipt Printer – The receipt printer prints all the details that record your withdrawal, date and time, and the amount of withdrawal and also shows the balance of your account in the receipt.

Cash Depositor – The cash dispenser is the heart of atm. It is a central system of ATM from which the necessary funds are received. From this part, the user gets his money. The cash dispenser has to count each bill and pay the required amount. If the money is folded in some cases, it will be taken to another section and will become a rejected bit. All these functions are performed by high precision sensors. Atm maintains the full record of each transaction with the help of an RTC device.

What is ATM Networking

Internet Service Provider (ISP) also plays an important role in ATM. It provides communication between ATM and host processors. When the transaction is done, the details are input by the cardholder. This information is provided by ATM to the host processor. The host processor examines these details with the authorized bank. If the details are matched, the host processor sends approval codes to the machine to transfer the cash.

What are the types of ATM

There are 2 Types of ATM Machines

Most host processors can support leased line or dial up machines

Leased Line Machines – Leased line machines connect directly to the host processor through a four-wire point to indicate the dedicated telephone line. These types of machines are preferred from place to place. The operating price of these machines is very expensive.

Dial Up Machines – Dial Up ATM connects to host processors through normal phone lines using a modem. They require a normal connection and have very low initial installation costs. The operating cost of these machines is less than that of the Leased Line Machines.

How is ATM Security

The ATM Card is secure with a PIN which has to keep secretly. There is no way to get a PIN from your card. This triple data encryption is encrypted by strong software like the cylinder.

How Does ATM Work

ATM (automated teller machine) is a data terminal with only two input and four output devices. These devices have interfered with the processor. The processor is the heart of atm. All ATMs working around the world are based on a central database system. ATM is to connect and communicate with the host processor (server). The host processor communicates with the Internet Service Provider (ISP). It is the gateway through all ATM networks available to the cardholder.

When a cardholder wants to transact ATM, the user card provides the necessary information through a reader and keypad. ATM provides its information to the host processor. The host processor cardholder enters the transaction request in the bank. If the cardholder requests cash, the host processor takes cash from the cardholder’s account. Once the money is transferred from the customer account to the host processor bank account, the processor sends the approval code to ATM and the cash comes out of the authorized machine. This is the way to get the amount on ATM. The ATM network is based entirely on a centralized database environment. This will make life easier and cash safe.

Features of ATM (Automated Teller Machine)

  • Transfer funds between linked bank accounts
  • Provides account balance information
  • Prints recent transactions list
  • Your pin changes
  • Deposit your cash
  • Prepaid mobile recharge
  • Bill payment
  • Cash withdrawal
  • Provides many facilities in your foreign language.

Advantages of ATM

  • ATM provides 24 hours service
  • ATM provides confidentiality in banking communication
  • ATM reduces the workload of bank employees
  • ATM can give new currency notes to the customer
  • ATM is convenient for customers
  • ATM is very beneficial for travelers
  • ATM provides services without any error

Disadvantages of ATM

Just as all useful items do have some disadvantages, using ATMs can also read to face some disadvantages as follows –

  • If someone knows the PIN of the ATM, he can easily steal your money.
  • Using ATM is a difficult task for illiterate people.

Important precautions for ATM

Be sure to take the following precautions if you are planning to start using ATM or use ATMs in advance.

  • Do not tell your friends, relatives, even family members about the PIN of the ATM.
  • While making online payments, you must note that the money should be transferred once.
  • Give any atm card information to any person or bank employee also.
  • Remember the PIN of your ATM card and do not write it anywhere.

How to Withdraw Money From ATM

STEP – 1 Enter ATM Card

There are mainly two types of cards number one debit card and number two credit card. Most debit cards are used in ATMs. So, in this post, I will talk about debit cards.

So put your ATM card in the ATM machine (you may see a green slot or any kind of slot). You can see the picture, so you have to put your ATM card in the ATM machine.

STEP – 2 Select language

Choose the language that is visible on the screen.

STEP – 3 Enter a 4 digit ATM PIN

In this section, you have to take your money from the lower slot of the machine. Take your money before 30 seconds.

STEP – 4 Take printed receipt

Whether you will be asked to take a printed receipt after taking your money. Do whatever you want.

STEP – 5 Another Transaction

Choose that option if you want to make another transaction.

After completing your entire transaction, press the cross or cancel button before leaving the ATM machine room.

Don’t forget to take your ATM card.

Last Word

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