The automated teller machine (ATM) as its popularly known is a very complicated as well as sophisticated device. This technology is the evolution of ideas of many and it doesn’t have any particular inventor. There were many models where we can only withdraw or only deposit. Now the latest era has machines which can do almost every work of a telesales due to technological advancement. It has really made everyone save the precious factor called Time.

1. ATM card

ATM Card
ATM Card

An ATM card is usually a payment card which is issued by a Bank which is essential for a transaction in the ATM whether it’s a deposit or withdrawal. An ATM card usually has the details such as account holder name, expiry date and the back of the card has an electronic stripe that holds all our account information that is retrieved by an ATM when this card is swiped. The new method of authentication The CVV number is also mentioned. Each card has a unique 16 digit identification number. The account information such as balance can be found in an ATM itself, all you need is your card and the PIN details.

2. Software


Mostly ATM machines use Windows XP or Microsoft software. Now days even Linux is trying to catch the market in cash dispensing machines.

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4. Basic Working

Basic Working
Basic Working

An ATM basically has two I/P and four O/P devices. It’s a data terminal which connects and communicates to a host processor which is an Internet service provider. It serves as the gateway through which the cardholder can access any ATM.Most host processors can support either leased-line or dial-up machines.

Leased-line machines are preferred for high volume locations and are connected to the host processor through a point to point or four-wire or dedicated telephone line.

Dial-up ATMs are preferred for retail merchants and they are linked to the host processor through a phone line using a modem and a toll-free number.

The host processor may be owned by a bank or an independent service provider

5. Parts of an ATM Machine

Card Reader
Card Reader

Card reader –Once the card is inserted it captures the account information stored on the magnetic stripe on the back of the card and this information is routed by the host to the bank to enable transaction.

Keypad: It is used by the card holder to enter details such as language selection, Account information, Account to withdraw cash from, PIN etc.

And an ATM has four output devices:

Speaker: Provides auditory feedback along with the key press

Display screen: It can be a Monochrome or LCD display it enables the cardholder to view the procedure and input data regarding the transaction.

Receipt printer: It gives a paper receipt of the transaction.

Cash dispenser: The main part of the machine which dispenses cash.

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7. Sensing Cash

Sensing Cash

The cash dispensing being the main and the crucial part has an electric eye which counts the cash before exiting the dispenser. All details regarding the transaction in noted in a journal

The information  in the journal is printed and a hard copy is maintained for two years it is very essential to resolve any dispute if raised in the future by the card holder.

Apart from the electric eye there is also a sensor which checks the thickness of the cash dispensed so that if two notes are sticked together its known easily and prevented from dispensing and reaches the reject bin, the same way torn ,folded and worn notes are also sent to bin.

The reject bin data is also very essential so that the machine owner can know that if the notes in bin are relatively high there may be a problem with either the currency or the machine.

8. What’s happening inside it??

What happening inside it
What happening inside it

Whenever an ATM transaction is to be done the card and the necessary information entered by the card holder is much needed. These informations are passed to the host processor which intern forwards the request to the bank which has issued the card. If it’s a cash transaction the electronic fund transfer from bank account to host processor account takes place first then the host processor sends approval to the cash dispensing machine to dispense cash. The processor then sends the card holders to merchant bank and hence the merchant is reimbursed for all funds dispensed by ATM.

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10. ATM Security

ATM Security
ATM Security

There are certain things we should keep in our mind when using ATM’s.

Avoid writing our PIN and keeping with us,Use of easily predictable PINs which has Name,DOB etc should be avoided.

We should also maintain our card in a good and safe condition. Worn out cards can’t support your transaction.

11. Cash Deposit in an ATM

CAsh Deposit in an Bank

The procedure is as follows

After the debit card is entered we are requested to enter thePIN.We should then enter the amount we are going to deposit, some machines do count on their own.Envelope,cheques or cash can be deposited. We will then get a confirmation receipt  and that’s it.So much time saving.

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13. ATM Centers

ATM Centers

Nowadays the ATM centers are located even in small rural and remote places too. Due to increasing theft and other crimes every ATM centre is under CCTV surveillance and most of them have security personnel. Due to the advancement in technology now a day’s any person can use an ATM and withdraw money.


14. Advantages of ATM

  • Saves time.
  • Round the clock service.
  • Access to any bank in the world.
  • Service expansion is possible.
  • Shopping is made easy online.
  • Low cost of operation.
  • Online transactions from purchase to bill payments are easy using an ATM card
  • Supports business and increases it
  • Additional revenue streams are provided
  • Reduces risk and lowers cost

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16.  Disadvantages of ATM 

  • Some remote areas don’t have an ATM
  • Crimes as stealing card, Hacking PIN do happen
  • Machines do fail
  • Cash withdrawal limitation
  • Loss of personal touch with banks
  • Misuse of cards
  • Cash deposit at times isn’t safe.

Any technology has its pros and cons. We can never imagine our current busy life without such technologies. An ATM is one such boon to us. Any Time ready to help us if our account has money in it.



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