ATM(Automated teller machine) is the easiest way to withdraw money from your bank account .Now a days millions of people are using ATM regularly and you must be one of them. It takes a few minute to withdraw money from ATM , but some time a question may arise on your mind that , actually what is happening inside? How this ATM works? So let’s know How ATM works?
How Does ATM Work?
ATM Machine consists of 4 output and 2 input device.
2 input devices are :
Card Reader (Read the ATM Card)
Keys (User can give input to ATM through these Keys)
4 output devices are :
Display screen (Display the response of user’s request on the ATM Screen)
Cash dispenser (Dispense cash to users)
Receipt printer (provide updated transaction receipt to users)
Speaker (provide auditory response to users when the user press a key)
ATMs are connect to a host processor , which is a common gateway through which various ATM networks become available to users . Various Banks , independent service providers owned this host processor.
There are 2 types of ATM machines available such as Leased-line ATMs(preferred for high volume locations) and dial-up ATMs(preferred for retail merchant locations).
Connection between the Leased-line ATMs and the host processor is a point to point , four wire telephone line connection.
Connection between the dial-up ATMs and the host processor is a normal phone line connection with the use of modem & toll-free number.
Leased –line machines are expensive than dial-up machines.
Enter your Card. What Happen Inside?
Ally our account information is stored on the magnetic stripe present at the back side of the ATM card. When you enter the card in the card reader , the card reader capture these account information and your account informations used for the transaction from your bank .The host processor route this transaction.
What happen inside when you enter your PIN
PIN(Personal Identification Number) is a 4 digit number given to all ATM card holders . All ATM card holder’s PINs are different from each others.It is only for security purpose
So when a person enter his/her PIN then that number is immediately verified by the bank .Then you will get different options to choose such as balance inquiry ,cash withdrawal etc, in the display screen . If you choose balance inquiry then your remaining account balance will be displayed on the screen . But if you choose cash withdrawal then you have to provide amount for withdrawal.then within a minute you will get your cash and also get a slip with the details of transaction.
How this cash come
‘Cash dispensing mechanism’ is responsible for coming the cash.When user request through his/her card for cash, then the ATM transfer the card informations to the host processor & the host processor send the request to the particular bank.Then there will be an ‘electronic fund transfer’ from the user’s bank account to the hostprocessor’s account . then an ‘approval code’ will be sent by the host processor to the ATM Machine to dispence the cash.
How the updated transaction slip comes
The cash dispensing mechanism able to count each bill after a transaction with its electric eye and the informations recorded in a journal .Then the hard copy of the bill will be dispensed to the card holder .If the cardholder has any argue about the transaction then he/she can see the transaction journal printout by notifying the bank that provided the card(if the host processor is not available to provide the journal printout) . Here the cardholder have to fill a form & the filled form will be faxed to the hostprocessor & the host processor will resolve the problem