Showing posts with label how. Show all posts
Showing posts with label how. Show all posts
  • Sunday, February 18, 2018

How ATMs Work?

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How ATMs Work?

Typical ATM machine

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.

Automatic Telling Machine Block Diagram:

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
Automatic Telling Machine Block Diagram


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.

2 Types of ATM Machines

Most of the host processors can support either leased line or dial up machines
  • Leased line ATM machines
  • Dial up ATM machines
Leased Line ATM Machines:
The leased line machines connect direct to the host processor through a four wire point to point dedicated telephone line. These types of machines are preferred in place. The operating cost of these machines is very high.
Dial Up ATM Machines:
The dial up ATMs connects to the host processor through a normal phone line using a modem. These require a normal connections their and their initial installation cost is very less. The operating cost of these machines is low compared with leased line machines.

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.

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.
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